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Considering all the options in a fluctuating marketplace

WHEN WestMag’s founders initially thought of producing WA’s first magnesia, Kingstream Steel offered a potential 100,000 tonnes per year market.

Then, when that market began to look more long-term than short, WestMag looked towards laterite nickel processing opportunities.

But since a $2.4 million float in June the company has not been lucky in that scene, either. Centaur Mining’s Cawse processing plant in the goldfields was successfully using magnesia, and the magnesia method was thought to have good prospects.

However, while Centaur was already under receivership before the WestMag float, plant plans remain unknown in the wait for a decision on the successful plant bidder.

Earlier in the year, QNI said it was considering using magnesia in a proposed laterite processing facility at Ravensthorpe, while Anaconda said it would consider using the oxide at up to three future plants.

But with recent corporate changes, redundancies and a concerted focus on Murrin Murrin, the three other projects may no longer hold any priority for Anaconda.

And QNI has said that while magnesia is still under consideration for the Ravensthorpe processing facility, no proposal on the project will be put up before the end of 2002.

WestMag has hit another snag. It had signed a letter of intent for brine supply from the Cargill Salt works in Port Hedland, but Cargill sold its operations to Dampier Salt and the company is now going through due diligence for the second time.

WestMag managing director Jim Malone readily concedes all this but is confident WestMag’s nickel markets will exist by 2005. In the meantime the company is investigating other markets.

Mr Malone expects to have a contract in place with a salt producer by the end of March 2002 and says Westmag is looking at producing potassium sulphate for fertiliser markets in three States.

The location of WestMag’s dolomite quarry may produce other, short-term, cash-flow. Within 10 kilometres of two major Pilbara iron ore projects, the dolomite could be used as road base and concrete aggregate as the projects expand.

“Examining this other income is the responsible thing to do,” Mr Malone said. “We’re making sure we’ve got money to spend in two years time.”

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