I would not trust Xstrata as far as I could throw them, after my...

I would not trust Xstrata as far as I could throw them, after my experience with them over MIM and PMA.

Cannot see PMA winning though.

Xstrata trying to gag us: PMA
January 21, 2005 - 7:20PM

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Precious Metals Australia has accused Swiss-based mining giant Xstrata of trying to gag the Perth-based minnow.

Xstrata, currently in the middle of an attempt to takeover Melbourne-based mining house WMC Resources Ltd, has alleged recent public comments by PMA breached the confidentiality provisions of a royalty agreement relating to the defunct Windimurra vanadium mine.

But PMA director Roderick Smith said the warning letter from Xstrata's solicitors comes after he made a number of forthright comments to a newspaper.

"I get quoted in the paper as accusing them of being an 800 pound bully so their response is to say `call us an 800 pound bully again and we'll sit on you'," Mr Smith said.

"Aren't they just proving that they are what many people fear they are, which is a secretive Swiss company that wants to put their point of view and not have any dissenting voices heard."

PMA, which has a 15 per cent net profit interest in the Windimurra project in Western Australia, has proved to be a thorn in Xstrata's side since the decision was made to mothball the project in 2003 and then close it permanently last year.

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AdvertisementPMA has accused Xstrata of shutting the operation to reduce the global supply of vanadium and increase the price of the specialty metal, which would benefit Xstrata's other operations in South Africa.

Xstrata has vehemently rejected the allegations, maintaining the decision to close Windimurra was based solely on an assessment of the project's ongoing financial viability and whether the spending needed to reopen the operation could be justified.

Vanadium - mostly used to produce high strength steel but also in the aerospace and nuclear industries - was trading at around $US1.90 a pound when operations were suspended in February 2003, compared with $US5.75 per pound late last year.

Xstrata has told PMA it reserved the right to seek a legal injunction if PMA does not stop commenting publicly on the royalty agreement.

"Frankly I dare them to seek an injunction to restrain us," Mr Smith said.

"I think the scrutiny that will come from taking that step will reveal their true nature - it'll only bring more focus on their activities."

A spokesman for Xstrata said the company has simply reminded PMA of its obligations under the royalty agreement.

"My difficulty in commenting further is: Addressing any of the increasingly ludicrous litany of issues that Roderick keeps bringing up does nothing more than lend him and the issues an importance which I don't believe they merit," the spokesman said.

PMA and the Windimurra closure have impacted on Xstrata's ongoing takeover bid for WMC.

Western Australia's Premier Geoff Gallop last month urged federal Treasurer Peter Costello to block the Xstrata bid, saying the company had a poor record in WA and citing the closure of Windimurra.