Brown moves to damp down inquiry speculation

Speculating on changes to Western Australia’s mining laws that could arise from a parliamentary inquiry into the recent closure of a Western Australian vanadium mine is “not the way to go”, according to WA State Development Minister Clive Brown.

A parliamentary inquiry into Swiss mining giant Xstrata’s decision to shut down its suspended Windimurra vanadium mine near Mt Magnet was announced earlier this month.

Committee chair Tony McRae told WA Business News last week the inquiry would raise the broader issues of governance of the closure of WA mines, as well as safeguarding State investment.  

In 1999 the State Government, along with AGL (now Australian Pipeline Trust), invested $60 million in establishing a 330-kilometre pipeline and a 13.5 megawatt gas-fired power station to service Windimurra’s power needs, as well as those of the local community.

Xstrata’s junior partner in Windimurra, Precious Metals Australia, has alleged the mine is being permanently shut to maintain high world vanadium prices, despite the mine’s economic viability.

Mr Brown said it was open to the government of the day to seek to enter into an arrangement with the operator to secure its investment.

“As we know, that wasn’t done,” Mr Brown said.

 “Why it wasn’t done or whether there was good reason for it or if the people were negligent in not doing that, that is something for the inquiry to examine.”

While Mr Brown said it was premature to speculate on the outcome of the inquiry, Chamber of Minerals and Energy (CME) chief executive Tim Shanahan said WA currently had a very rigorous system in place that governed tenements and agreements.

To contemplate any retrospective changes to this system would increase WA’s world-rated low sovereign risk and would not be supported by the CME, he said.

Mr Shanahan said the role of government was to facilitate investment in the State. He said it was preferred that provision of infrastructure be made on a common-user basis rather than “trying to pick winners”.

The CME will make a submission to the Windimurra inquiry.

Mr Brown said there was no question that one of the State’s strengths was its very low sovereign risk.

“Companies are prepared to look not at the lowest price, but are prepared to recognise the benefits of low sovereign risk,” he said.