Gas Week

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Conflict over iron ore developments in Western Australia’s Mid west region escalates; Minister threatens termination of agreement

Posted by gasweek on 28 September, 2007

West Australian Deputy Pre­mier Eric Ripper had sharply escalated the conflict over iron ore developments in the State’s Mid West region, according to Nigel Wilson, reported The Australian (20/9/2007, p.20). $3bn wrangle triggered by cash shortage: Yesterday his spokesman said the minister was prepared to meet representatives of Midwest Corporation to discuss “transfer of tenure for their tenements to the mining act”, Wilson reported. The dispute concerned the fu­ture of $3 billion worth of rail and port infrastructure in the Mid West region, east of Geraldton. Five proposed iron ore mines have insufficient resources or capital reserves to fund the infrastructure individually.

Compromise tendering system proposed: Murchison, backed by Mitsu­bishi, wanted to build its own exclusive railway from the Jack Hills deposit and link it to a new port at Oakajee, north of Geraldton. Midwest had backed a pro­posal by Yilgarn Infrastructure, which had the support of Chi­nese Government agencies, for an open-access railway and port infrastructure concept that would link all the mines in the region. The Government, through Planning Minister Alannah MacTiernan, had proposed a compromise that would lead to competitive tendering for parts of the infrastructure.

Worrying precedent: Previously, Ripper had written to Midwest saying he was considering terminating a State Agreement Act under which the company held tene­ments in the Weld Range, be­cause it was unworkable. Midwest disagreed, saying it had legal advice that the agree­ment act was still in force. Agreement acts spell out the rights and obligations of both project proponents and the state. Mining executives are worried that if the WA Government terminated an agreement act, it would threaten the viability of the 72 other agreement acts covering projects in the state.

Agreement historical accident: Midwest was the current holder of the Iron Ore (Murchison) Agreement Authorisation Act, which was established in 1973. Ripper said it is outdated because many of the state gov­ernment assets it referred to, such as railways, were now privately owned. But Midwest said amendments could be made without the legislation being rewritten. But under the agreement act, Midwest’s Weld Range tene­ments expire in November next year. Murchison’s executive chair­man, Paul Kopetjka, was quoted as saying the Iron Ore Murchi­son agreement act was “an accident of history”.

The Australian, 20/9/2007, p. 20

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