Plans by listed mining company CI Resources Ltd to revive its fortunes by appointing new directors, including former state development minister Clive Brown, have suffered a major setback after the federal government rejected plans for new mining leases on
Plans by listed mining company CI Resources Ltd to revive its fortunes by appointing new directors, including former state development minister Clive Brown, have suffered a major setback after the federal government rejected plans for new mining leases on Christmas Island.
CI’s major asset is a 39 per cent shareholding in unlisted company Phosphate Resources Ltd, which has been trying for seven years to gain environmental approval to extend its mining operations.
Environment and Water Resources Minister Malcolm Turnbull announced last week that he had decided not to grant the extension on the basis that it would have an unacceptable impact on the island’s flora and fauna.
Phosphate’s long-term plans have hinged on the planned extension of its mining leases, so the minister’s decision constitutes a major setback.
The company’s South Perth-based company secretary, Kevin Edwards, said he was astounded by the decision.
“We think the minister has been misinformed,” Mr Edwards said. “We are taking advice on the refusal.”
In his statement, Mr Turnbull said: “Expert advice to me indicated that the future survival of a number of species on the island would be seriously threatened by expanded mining operations.
“Independent analysis suggests that an extension of mining works would most likely contribute to the extinction of a number of threatened species including the critically endangered Christmas Island Pipistrelle bat, and adversely impact on the remaining populations of the endangered Abbott’s booby and Christmas Island Frigatebird,” Mr Turnbull said.
Mr Edwards challenged these comments, saying there were no bats remotely near the proposed mining leases.
He said the company identified some nesting sites for the Abbott’s booby and responded by withdrawing its application over more than 100 hectares of the island to avoid any threat to the birds.
Mr Edwards said the company’s current mining reserves, which generate annual sales of about $60 million, would last only about five years.
Apart from its regulatory problems, Phosphate has also been wracked by disputes among its directors and shareholders.
Subiaco-based CI Resources has made two unsuccessful attempts to acquire Phosphate and subsequent efforts to reach an amicable working agreement have had mixed results.
The nomination of Mr Brown, who was a chairman of Phosphate in the 1980s, was meant to help smooth the waters.
Mr Brown and lawyer Anthony Brennan will stand for election as directors at CI’s annual meeting later this month.
Current directors, Allied Gold Ltd managing director Mark Caruso and Allied company secretary Peter Torre, are expected to stand down from the CI board after the AGM.
Mr Caruso negotiated a deal to join Phosphate’s board last year but his nomination was subsequently defeated by shareholders.
CI’s chairman Oh Kim Sun, who also chairs Phosphate, is standing for re-election even though he sold his 11.6 million shares in the company early this year for $2.3 million.
Messrs Brown and Brennan were nominated as directors after Malaysian company Prosper Trading became a substantial shareholder.
CI’s second major shareholder is Chemical Company of Malaysia Berhad.