Gindalbie Metals has vehemently denied media reports that it gave Chinese steel-makers an unfair advantage to win tenders for its Karara iron ore development in the Mid West.
Reports in The Australian newspaper this morning alleged Gindalbie’s operating company, Karara Mining, issued different specifications to Australian and Chinese steel-makers, making it easier for Chinese suppliers to win the tender.
Gindalbie shot down those accusations in a statement to the ASX today, saying it asked Australian and Chinese steel-makers to quote on products that were exactly the same in all respects.
The company said the detailed specifications sent to Chinese bidders referenced requirements to meet both Chinese and international standards, while in the information sent to Australian steel-makers there was no requirement to meet Chinese standards.
“Under the standards provided to all bidders, the end product received by Karara would be identical,” the statement said.
“Contrary to the report in The Australian, the separate specification sheet assisted Australian bidders, rather than excluded them.”
Gindalbie chairman George Jones said that the company had an outstanding record on the issue of local content at Karara.
He said approximately 40 per cent of the steel used at the development had been sourced from Australia.
“Karara’s use of Australian-made products, including steel, is nothing short of outstanding by comparison,” Mr Jones said in a statement.
“The company is extremely proud of its success in securing Australian products for this Australian project.
“Under the Karara joint venture agreement with Ansteel there are no requirements whatsoever that Chinese suppliers or contractors of any sort be given a preferred position or competitive advantage of any nature.
“The only requirement of the Karara tendering process is that it is open and fair in every respect.”
Mr Jones said Australian content made up more than 90 per cent of the project’s $1.8 billion construction cost to date, including $1.3 billion spent in Western Australia.
Approximately $154 million has been spent in the Mid West, he said.
At 1:00PM WST, Gindalbie shares had slipped 0.8 per cent, to trade at 62.5 cents.
Gindalbie's denial comes a day after Prime Minister Julia Gillard said she would contact Premier Colin Barnett regarding reports that Oakajee port proponent OPR had been directed to use Chinese equipment and services.
Ms Gillard said she understood people were worried Australians would not get a fair share of the work that will go into constructing the $6 billion port and rail development at Oakajee.
