Mine law change mooted

A parliamentary inquiry into Swiss mining giant Xstrata’s decision to shut down its suspended Windimurra vanadium mine near Mt Magnet could lead to legislative changes to better govern the closure of WA mines.

Announced last week, the inquiry is expected to run for the next two months and will be conducted by the WA Legislative Assembly’s economic and industry standing committee.

Windimurra announced it was closing the mine in May this year after almost a year of suspension, citing doubt over the financial robustness of the project despite the current high vanadium prices.

Meanwhile Xstrata’s junior partner Precious Metals Australia says although it expects little to come of the inquiry in terms of salvaging Windimurra, it hopes the inquiry might stall the alleged dismantling and selling of the mine plant before a legal challenge can be launched.

PMA chief executive Roderick Smith said that legal challenge was only days away.

Economic and industry standing committee chair Tony McRae said the inquiry into the Windimurra issue would raise broader questions that could impact on both the WA mining industry and the WA Government.

He said it raised two issues, which would be examined as part of the inquiry.

“Can WA’s resources be developed under the current Mining Act where that legislation provides no protection to the State when it facilitates mining lease development by infrastructure investment?” Mr McRae asked.

In 1999 the Government, along with AGL (now Australian Pipeline Trust) invested $60 million in establishing a 330 kilometre pipeline and a 13.5 mega-watt gas-fired power station to service Windimurra’s power needs.

Mr McRae said it also raised a question of whether the Mining Act or some other form of legislation needed to be changed to give the State the capacity to better enforce productive use of mineral resources.

Under both the New South Wales and Queensland Mining Acts, the government’s approval must be sought before a company can cease mining.

Asked whether he would be concerned about the type of messages the inquiry’s findings could send the mining companies looking to invest in WA, Mr McRae said he understood the implications.

“I understand the tension involved between a mining corporation’s desire to operate in its interests in a highly competitive market place and the objectives of the State which is to maximise the return to the people of WA,” he said.

“Those two different objectives generally operate fairly well and not in conflict with each other.

“But Windimurra poses the question of what happens when it is alleged that a corporation is operating in its interests which are not in the interests of the State.

“That is the nub of the question. Does the State have the capacity to enforce the use of a mineral resource when the international market place is suggesting the price is right to extract it?”

Both PMA and Xstrata will be making submissions to the inquiry.

An Xstrata spokeswoman refused to comment about accusations that the company had acted improperly regarding the mine closure

“We have no intention of entering into a public debate in the media over allegations that are simply irrelevant or untrue,” the spokeswoman said.

State Opposition leader Colin Barnett, who was the Resources Minister responsible for the Government’s decision to invest in the mine, said an inquiry would achieve nothing.