Gindalbie Metals has welcomed the Environmental Protection Authority's long awaited report on its $1.8 billion Karara project but may appeal over the exclusion of one iron ore deposit in the project area.
Gindalbie Metals has welcomed the Environmental Protection Authority's long awaited report on its $1.8 billion Karara project but may appeal over the exclusion of one iron ore deposit in the project area.
Today's report paves the way for Gindalbie to start construction later this year after it receives environmental approval from the state government, expected in the September quarter.
Premier Colin Barnett today welcomed the EPA recommendations and said the project will generate around 2,000 jobs in the Mid West region.
EPA chairman Paul Vogel today said Gindalbie had offered to relinquish its mining tenement over Mungada Ridge, a banded iron stone formation, as the necessary first steps in the creation of the area as a Class A Reserve.
"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," Dr Vogel said.
"Previously no areas in the Range were secured for conservation."
Gindalbie had issued two mining proposals, one for Karara and one for the Mungada iron ore project, which predominately contains hematite iron ore.
The company had previously withdrawn its proposal for Mungada in light of environmental concerns over banded iron stone formations in the Mid West.
However, Gindlabie had included two deposits, Blue Hills North and Terapod, from the Mungada project with the Karara project proposal.
The EPA today recommended that development of Blue Hills North can go ahead however mining of Terapod "would lead to the loss of significant environmental values".
In a statement issued today, Gindalbie said it had offered to relinquish the Muganda tenement on the proviso that Karara, Blue Hills North and Terapod and all associated infrastructure were approved.
"The Joint Venture partners are currently reviewing this issue, the findings of the EPA and the conditions attached to the report to determine whether they will appeal any conditions," Gindalbie said.
The long awaited recommendations come after chairman George Jones last week called the environmental approval process "embarrassing" after revealing a three-year wait.
In that time, project partner AnSteel had already built a $5 billion processing plant in China specifically for the project.
Mr Jones said the project is expects to generate more than 1,500 jobs during the construction phase, annual export revenue of around $1 billion and some $630 million in capital contributions to upgrade regional infrastructure.
Gindalbie is waiting on approval from the Foreign Investment Review Board for a $162 million share placement to AnSteel. The placement will cover Gindalbie's final financial contribution to the Karara project.
Shares in Gindalbie closed up three cents to 67.5 cents today.
The EPA, Gindable and the Premier's announcements are below:
The Environmental Protection Authority has released advice and recommendations to the Minister for Environment on proposals by Karara Mining Ltd (KML) to mine iron ore in the Blue Hills Range. KML have two mining proposals, the Karara Iron Ore Project (KIOP) and the Mungada Iron Ore Project (MIOP).
The EPA has found that Mt Karara has significant environmental values and the same value are present in other parts of the Blue Hills Range. Government has given recognition of these values and has advised the EPA of its view.
The EPA has reported on the KIOP proposal and concluded that with the protection of a portion of the Mungada Ridge in a Class A Nature Reserve and the with the implementation of Ministerial Conditions, development of the KIOP proposal could be undertaken.
The EPA has reported on the MIOP proposal and notes that it has been substantially changed by the proponent since referral, and KML has offered to relinquish the tenement over the Mungada Ridge.
The EPA has concluded that development of the Terapod deposit would lead to the loss of significant environmental values and is inconsistent with it's view to reserve the Mungada Ridge in its entirety. The EPA has also found that the values in the Blue Hills North area are not as significant as those in the Terapod area and has concluded that with the implementation of Ministerial Conditions, development of the Blue Hills North deposit could be undertaken.
The EPA also notes that these two proposals would be developed as an integrated mining operation.
Gindalbie Metals Limited (ASX: GBG - "Gindalbie") is pleased to advise that the Environmental Protection Authority (EPA) of Western Australia today released its Reports for the Karara Iron Ore Project in Western Australia recommending approval for the world-class resources development.
The EPA reports pave the way for the Karara Project, which is located 225km east of Geraldton in Western Australia's Mid West region, to commence construction later this year. The Karara Project is being developed through a 50:50 Joint Venture with AnSteel, one of China's leading steel producers.
The release of the EPA reports, which contain the EPA's assessment, report and recommendations to the Minister for the Environment, represents a major milestone for the Project and a strong endorsement of the Karara Joint Venture's approach to environmental management.
Gindalbie is pleased to note the report has concluded that with the implementation of Ministerial Conditions the development of the flagship multi-billion tonne Karara Project could be undertaken. While these conditions are under review, the majority of the conditions are consistent with a sustainable approach to mining and development. Management plans and actions to address these are in an advanced stage of development.
The EPA recommendation provides significant encouragement that the company will be able to complete the approvals process in the coming months to allow the on-site construction of the project to proceed in the second half of 2009.
The report suggests the Government has decided to declare a conservation area based around Mungada Ridge. The Joint Venture partners have previously withdrawn from assessment the hematite orebodies located on the Mungada Ridge, while continuing assessments of the nearby Blue Hills North and Terapod iron orebodies and the main Karara magnetite deposit.
While the EPA report recommends the approval of the Karara magnetite and Blue Hills North orebodies, it recommends the Terapod deposit should be included in the Government's conservation area. It should be noted that during discussions with various Government departments in the review process, the Joint Venture partners advised they were prepared to consider relinquishment of the tenement covering the Mungada Ridge, strictly on the basis that Karara, Blue Hills North, Terapod and all associated infrastructure were approved. The Joint Venture partners are currently reviewing this issue, the findings of the EPA and the conditions attached to the report to determine whether they will appeal any conditions.
The EPA Bulletin is now open for a 14 day public appeal period before entering the appeals determination and final Ministerial approval process. Gindalbie anticipates that these processes will be completed during the September Quarter, 2009. Subject to obtaining these final approvals in a timely fashion, the Karara Joint Venture now anticipates being able to gain full access to site for the commencement of construction in the December Quarter, 2009.
Gindalbie's Managing Director, Mr Garret Dixon, said the recommendations released in the EPA's Reports represented the culmination of several years of hard work by the Company's environmental and approvals team, led by Greg Kaeding.
`"We are looking forward to completing the final ministerial approval process, which will enable us to commence site-based construction activities," Mr Dixon said. "As previously announced, pre-development and off-site activities for the Karara Project are already well underway, including manufacturing of key long-lead items, engineering design and procurement.
"This represents a significant show of faith in the future of this project considering that the final regulatory approvals process is still being completed."
Gindalbie's Chairman, Mr George Jones, welcomed the report and acknowledged the support of the WA Government, and in particular Premier Colin Barnett, describing it as a very positive step forward for the project.
"At a time when many resource projects in Western Australia are being closed, cancelled or cut back, it is very pleasing to be announcing a positive milestone for a project in the Mid West region that will result in the investment of some A$1.8 billion, providing long-term employment, opportunities and economic stimulus both for the region and the State," he said
"With a life of over 50 years, the Karara Project will generate direct and indirect employment of over 600 new Mid West jobs, more than 1500 jobs during the construction phase, annual export revenue of around A$1 billion, some $630 million in capital contributions to upgrade regional infrastructure, as well as significant new opportunities for economic and business development and training programs to provide skills and vocational education."
Today's Environmental Protection Authority (EPA) report, which pointed the way forward for the development of the Gindalbie iron ore proposal, has been welcomed by Premier and State Development Minister Colin Barnett.
Mr Barnett said that if approved by the Liberal-National Government, the project in Western Australia's Mid-West would generate about 2,000 jobs, further enhancing the State's prospects of working counter to the global economic crisis.
"The EPA's view that mining in this area would not increase the threat status of species and communities with the establishment of a Class A nature reserve and the implementation of the recommended Ministerial Conditions in relation to vegetation, fauna and rehabilitation, is good news for the State," he said.
"We are a Government which makes decisions in the best interests of the State. We are showing through our actions that development can be done while ensuring high environmental standards are met.
"This project and others that are likely to follow, highlight the importance of the Oakajee Port development as a world-class facility that will result in economic growth and provide jobs within Western Australia and nationally."
The Premier said he was encouraging the Federal Government to expedite Foreign Investment Review Board approvals to enable the project to start sooner rather than later.
The Gindalbie project would potentially provide 1,500 jobs during construction and about 600 long-term jobs during operation.
The company was aiming to begin hematite production in the second half of 2010 at a capacity of 10 million tonnes a year and magnetite concentrate in the first half of 2011.
The iron ore would be exported through Geraldton Port until Oakajee comes on stream in 2013-14.
In April 2009, the Liberal-National Government advised that a portion of the Mungada Ridge, which was located in the Blue Hills Range, would be set aside as a Class A Nature Reserve and protected from development. The EPA had supported this approach as one of the main conditions that would enable the project to go ahead.
