Response to Media ArticleRNS Number:3344MCape Lambert Iron Ore...

Response to Media Article

RNS Number:3344M
Cape Lambert Iron Ore Limited
20 November 2006


CAPE LAMBERT IRON ORE LTD

RESPONSE TO INDIAN MEDIA ARTICLE: " ESSAR CHASES IRON IN AUSTRALIA"


Following a request by the Australian Stock Exchange ("ASX") earlier today, the
Board of Cape Lambert Iron Ore Ltd (ASX: CFE AIM:CLIO) ("CFE") ("The Company")
would like to make the following statement regarding an article that appeared in
the Indian press late last week:


The Company is aware of the article on Friday relating to negotiations between
the Company and Indian steel giant Essar Group.


As previously reported, CFE has non-binding non-excluve memorandum of
understandings with three Chinese groups relating to negotiations for equity and
off-take agreements. CFE has however continued negotiations with a number of
parties looking to either invest in the Cape Lambert Iron Ore Project or to
enter into an off-take agreement. These discussions have included the Essar
Group of India.


The Company has been in talks with Essar about their potential involvement in
the Cape Lambert Iron Ore project for seven months and representatives of Essar
Group have flown to WA to meet with the CFE Board.


While the talks have been "very robust and detailed" it is still too early to
say any agreement is imminent.


CFE remains in negotatiations with other major Chinese and Indian groups and
will continue to review all off-take opportunties, with the view to selecting a
partner that is not only committed to take the ore, but also the development of
the Cape Lambert Iron Ore Project.


Should you require any further information about the information contained
within this announcement please contact the undersigned.


Yours faithfully

Cape Lambert Iron Ore LTD


Tony Sage

Executive Director