This article shows the potential that TFE has with its...

This article shows the potential that TFE has with its affiliation with Noble. In addition to the leadership of Michael Kiernan the most outstanding factor in its favour is its easy access to rail and port infrastructure.
Where companies like Fortesque still have to provide expensive and extensive rail infrastructure to get up and running TFE only have to load and ship. Look out for movement on news of further resources and first shipment to loading facilities in Darwin. Shortest direct route to hungry Asian markets!

Noble eyes stake in $1.4b Albany project
23rd April 2007, 9:00 WST

Big Hong Kong commodities trader Noble Group is expected to make its first significant investment in WA’s emerging magnetite iron ore sector in a matter of weeks as part of a concerted push to build its presence on the Australian resources scene and become a one-stop supplier to the insatiable Chinese steel industry.


It is believed Noble, which has a market value of more than $3.1 billion, is a frontrunner for a cornerstone stake in the $1.4 billion Southdown magnetite project planned near Albany by Perth-based Grange Resources.

Speaking from Hong Kong yesterday, Grange managing director Geoff Wedlock declined to comment on whether a deal with Noble was in the wind, but confirmed the company expected to name a joint venture partner soon. “I can’t confirm or deny any of that, but we are working with a number of parties,” he said. “Nothing is finalised as yet, but we expect to come to a decision in the next couple of months.”

Perth mining baron Michael Kiernan, a long-time business ally of Noble, last month told WestBusiness that Noble was eager to expand into WA’s magnetite sector, possibly through emerging iron ore junior Territory Iron. Territory is 30 per cent controlled by Crawley Investments, a private investment vehicle jointly owned by Mr Kiernan and Noble.

Yesterday, Mr Kiernan confirmed that Noble was closing in on its first magnetite investment but declined to identify the most likely target.

“We’re down to a couple (of opportunities),” he said. “Their business is growing their business, and as opportunities come along, they will increase their involvement where they can use their financial strength to facilitate projects.”

Noble is understood to have been eyeing a stake in several WA magnetite ventures for more than a year, only to watch as other Chinese companies swooped to pick up controlling stakes in a number of proposed projects.

Chinese groups are now spearheading work on Gindalbie Metals’ Karara venture east of Geraldton, Midwest Corporation’s Koolanooka project, Clive Palmer’s Cape Preston project in the Pilbara, the adjoining Balmoral South project held by Australasian Resources, and Cape Lambert’s namesake mine near Wickham.

That leaves Grange as the last major magnetite proponent in WA still without a partner.

Given that Grange plans to ship seven million tonnes of magnetite concentrate from Albany annually to its planned pellet plant in Malaysia for delivery to customers across Asia and the Middle East, Noble’s expertise in marketing and logistics management could be pivotal.

Though Grange has indicated that it would be happy to retain less than 50 per cent of the Southdown project, its preference has been to introduce more than one major international equity partner. For that reason, talks with Sinosteel broke down last year when the Chinese conglomerate demanded a stake of between 50 and 70 per cent in the Southdown venture.

Against that backdrop of hot competition for local assets, Noble has been steadily building its Australian presence since halving its stake in takeover target Consolidated Minerals to 6 per cent in late 2005.

On Friday, it bolstered its influence over emerging vanadium producer Precious Metals Australia when Mr Kiernan was elevated to the role of chairman and PMA’s long-serving managing director Roderick Smith agreed to give up the reins in June.

Noble became PMA’s major backer in a $22 million equity deal last year that gave it a 10 per cent stake as well as marketing rights for all vanadium produced by PMA’s $200 million Windimurra mine near Mt Magnet, which is slated for reopening early next year.

Mr Kiernan said his elevation underlined Noble’s support for the project, which is expected to be the world’s lowest cost producer of ferrovanadium when it comes onstream, and will account for about 8 per cent of world vanadium supplies.

Mr Kiernan said Noble’s PMA investment was also a sign of its determination to take greater advantage of Australia’s geological wealth and proximity to the Chinese market.

“They’re well and truly tapped into the Tiger and they understand China’s needs … so certainly in Australia they are looking to the resources sector,” he said.

Noble was outbid by mining giant Rio Tinto for a half share in Gina Rinehart’s $1.5 billion Hope Downs iron ore project in 2005.

JOHN PHACEAS