02/06/2009 - 11:05

EPA snubs part of Sinosteel proposal

02/06/2009 - 11:05

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Sinosteel Midwest Corp may be forced to revise its iron ore project in the Mid West after Western Australia's environmental authority recommended that mining not proceed at one of three proposed sites.

Sinosteel Midwest Corp may be forced to revise its iron ore project in the Mid West after Western Australia's environmental authority recommended that mining not proceed at one of three proposed sites.

The Environmental Protection Authority (EPA) said mining should not proceed at Mungada East, recommending the area should be a nature reserve.

Sinosteel responded by saying that the Mungada East mine was integral to its project proceeding economically.

Its Koolanooka/Blue Hills project consists of three mine sites, all formerly mined by Western Mining (WMC) in the 1960s. Koolanooka is based approximately 190 kilometres east of Geraldton with Blue Hills (Mungada East and Mungada West) a further 70km east.

The project involves the crushing, haulage and shipment of ore at Koolanooka (2 million tonnes) and Mungada (3.8 million tonnes) over a 5-year project life.

Sinosteel Midwest's newly appointed chief operating officer Giulio Casello said the company was disappointed and would review the conditions and recommendations contained in the EPA Report and respond in the coming days.

"Sinosteel Midwest's Koolanooka/Blue Hills Project has been in the environmental approval process since September 2006 so we are eager to progress through this final stage in a timely manner," he said.

The EPA has advised state Environment Minister Donna Faragher to knock back the plans for Mungada East, which is on the Mungada Ridge.

A spokesman for the EPA said it had recommended the minister accept Sinosteel Midwest's other proposals including mining at Mungada West, which is not on the ridge, subject to environmental conditions.

"Development of any kind on the Mungada Ridge is not supported as the EPA considers that the whole of the Mungada Ridge should be reserved in its entirety in an A Class Nature Reserve," EPA chairman Paul Vogel said in a statement on Tuesday.

"The Mungada East mine cannot be managed to meet the EPA's objectives in relation to the conservation of biodiversity and ecological integrity, and the EPA has recommended that it not proceed.

"However, the EPA has recommended environmental conditions ... to apply to the majority of Sinosteel Midwest's proposal, that is for Koolanooka Hills, the Mungada West mine, Mungada Haul road and the accommodation camp at Old Karara Homestead."

Mr Vogel said the EPA's recommendation was consistent with advice it gave in April for Gindalbie Metals's proposal to mine at Karara, which is on the Mungada Ridge.

The EPA's overall recommendation was that the Karara project be approved for development, but Gindalbie is appealing against some of the EPA's conditions and recommendations including the exclusion of the Terapod deposit.

Terapod contains a significant portion of Gindalbie's initial hematite resources which would be critical for the start-up 2 million tonne per annum direct shipping ore operation.

Sinosteel Midwest resulted from Sinosteel's $1.3 billion acquisition of Midwest Corporation Ltd in mid 2008, which was the first hostile takeover by a Chinese company of a foreign entity.

 

The EPA announcement is below:

 

The Environmental Protection Authority has released advice and recommendations to the Minister for Environment on a proposal by Sinosteel Midwest Corporation Limited to mine hematite ore at Koolanooka Hills and at two locations at Mungada (part of the Blue Hills Range), to reinstate the Mungada Haul Road to its original width and construct an accommodation camp at Old Karara Homestead.

EPA Chairman Paul Vogel said that EPA advice and recommendations given to the Minister for Environment on Sinosteel Midwest's proposal was consistent with that given in April on the Karara Mining or Gindalbie proposals.

"That is that development of any kind on the Mungada Ridge is not supported as the EPA considers that the whole of the Mungada Ridge should be reserved in its entirety in an A Class Nature Reserve," he said.

'The Mungada East mine cannot be managed to meet the EPA's objectives in relation to the conservation of biodiversity and ecological integrity and the EPA has recommended that it not proceed.

'However, the EPA has recommended environmental conditions to the Minister for Environment to apply to the majority of Sinosteel Midwest's proposal, that is for Koolanooka Hills, the Mungada West mine, Mungada Haul Road and the accommodation camp at Old Karara Homestead.

'The Blue Hills area, and other Banded Iron Stone formations, have very significant regional conservation values and contain a variety of rare and endemic species and communities. Until recently no areas in the Range were nominated for conservation.

'The values associated with the Blue Hills Range were identified in the Strategic Review of the Conservation and Resource Values of the Banded Iron Formation of the Yilgarn Craton undertaken, at the request of the EPA, by the Departments of Environment and Conservation and Industry and Resources as one of the "highest biodiversity and landscape value sites that are intact and protectable and a high priority for conservation."'

 

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