the west article

Cazaly attacks Bowler ruling

20th March 2007, 7:45 WST


Iron ore upstart Cazaly Resources has begun a ground-breaking Supreme Court appeal to revive its claim over the big Shovelanna iron ore deposit in the Pilbara.

More than 30 onlookers yesterday attended the opening of Cazaly’s Court of Appeal hearing to quash last year’s controversial ruling by sacked resources minister John Bowler to terminate the explorer’s application for Shovelanna at the request of mining giant Rio Tinto.

Using his discretionary powers to intervene, Mr Bowler argued it was not in the public interest to award the ground to Cazaly, which pegged the deposit after Rio accidentally failed to renew its lease in August 2005.

Cazaly’s barrister, Malcolm McCusker, told the court Mr Bowler was wrong to kill Cazaly’s application because there were no “reasonable grounds” to believe such action was in the public interest.

Mr Bowler should also have considered only the merits of Cazaly’s application instead of also weighing up the “private interests of other parties”.

Mr McCusker said Rio had held the lease without undertaking any significant work since the late 1980s, and had since indicated it had no intention of developing the lease anytime in the foreseeable future.

By comparison, Cazaly had “demonstrated plans” to finance and develop Shovelanna.

“So how can it be said it is in the public interest to terminate the application by Cazaly, which has shown its intent to develop the resource while the holder just wants to warehouse the tenement?” Mr McCusker asked.

Mr McCusker also attacked Mr Bowler’s explanation that his decision reflected the State’s long-standing — but unwritten — iron ore policy. The policy dictates that iron ore miners are entitled to “less onerous” conditions guaranteeing them long-term title over resources because of the long timeframes and heavy spending required to export iron ore.

But Mr McCusker said the unwritten policy was in direct contravention of the WA Mining Act’s primary aim of encouraging investment and the timely development of the State’s mineral resources.

Speaking outside the court, Cazaly managing director Nathan McMahon said he was glad the matter was finally being tested in open court.

“I have always had major concerns about Rio Tinto and the Government not being overly transparent so it is a good opportunity,” he said.

“I was in Canada about two to three weeks ago and the word ‘Zimbabwe’ came up every time this case was mentioned.”

The case continues today.