the next fmg...

I've lost count of the amount of times I've heard the

expression "the next FMG" but in this instance BAU may be

on it's way to proving there is some truth to the claim...


WESTERN Australia's Environmental Protection Authority has been a thorn in the side of many a mining company and, when brought into existence in 1971, it hit the ground running by opposing the building in the Upper Swan Valley of the proposed Pacminex alumina refinery.

That company - a subsidiary of CSR - was offered another site at Muchea but the refinery did not go ahead. Economics played a part, but so did a falling out between Pacminex's joint venture partner, Lang Hancock, and the then newly elected Labor premier, the 69-year-old John Tonkin.

This led the state government to give the tick to the rival smelter being promoted by the then BHP.

Muchea is located in the Darling Ranges where BHP Billiton has its Worsley bauxite and alumina operation. The region produces 17 per cent of the world's alumina.

CSR spent $2 million exploring Muchea, which would equate to about $50 million in today's money.

That paid for 10,000 drill holes and 80,000 samples, as well as a feasibility study.

None of the drill results is JORC-compliant, but there's clearly a good deal of bauxite there.

Fast-forward to 2007, and we have Bauxite Resources, holder of the Muchea property, which listed last month. Last week, it took on board as non-executive director David McSweeney, who helped build the now Gindalbie Metals, a serious iron ore player in the Mid West region.

McSweeney thinks his new interest might have done a Fortescue Metals Group - that is, slipped through the cracks and under the noses of the majors, into a very large resource.

As Andrew Forrest and FMG picked up swaths of iron ore ground in the Pilbara which the big players had known about for years, so McSweeney feels that has been replicated at Muchea with bauxite. The next 12 months will be spent dusting off all the old records. But the doors have already started revolving with potential customers calling to find out more.

The Chinese want BAU's bauxite and they are more than happy

to pay...the question is, what will BAU be worth when (not

if!) this happens?