Mid West mining test for WA Liberals

The sensitivity of mining certain areas of the Mid West region could prove to be one of the first resources test for the new government, as Gindlabie Metals Ltd comes under attack from the Conservation Council of WA.

The council today slammed Gindalbie's proposal to mine both hematite and magnetite iron ore at its $1.8 billion Karara joint venture project, following today's release of the public environmental review for the magnetite phase of the operation.

The review is up for public comment over the next four weeks.

The delicate topic of mining in the Mid West region stems from a review conducted by the government last year which identified certain areas suitable for mining and outlined others, which contain Banded Ironstone Formation (BIF) ranges, for conservation.

The joint venture, which plans to mine both hematite and magnetite iron ore, hosts both types of areas.

Today's launch of the public review focuses on the magnetite iron ore deposits contained within the Karara tenements, which also hosts hematite iron ore.

The Conservation Council said it will submit a detailed submission to the Environmental Protection Authority on the Karara magnetite proposal and reiterated its calls to place all areas with significant BIF ranges into secure A-Class conservation reserves, where mining is strictly prohibited.

Gindalbie's hematite operation relies on iron ore deposits that occur in both the Karara and Mungada tenements.

The government has previously given its support for mining on the Karara tenements however the nearby Mungada Ridge tenements have so far been deemed to contain significant biodiversity value.

Gindlabie announced today that after lengthy discussions, it will withdraw the resources contained on the Mungada Ridge area from its current project assessment until it has a more comprehensive understanding of the conservation and mineralogical value of the area.

Assessment is continuing on the hematite resources contained on the Karara tenements with the EPA review scheduled for completion during the December 2008 quarter.

"It is important to note that even with the removal of the Mungada Ridge tenements from the current assessment we will still be able to proceed with development of a Direct Shipping Ore operation in 2009 at an initial start-up rate of 1.5 million tonnes per annum, increasing to 2Mtpa, based on our existing resources," Gindalbie managing director Garret Dixon said.

"At the same time, we are continuing an aggressive exploration program across our tenement area and remain confident of being able to prove up additional hematite resources to support the project."

The Karara project is a joint venture with China's AnSteel