Up­grade to Sino shelved

Pilbara News - - News - Nick Evans

An up­grade of the gi­ant Sino Iron pro­ject in the Pil­bara has been shelved by Chi­nese owner CITIC be­cause of the on­go­ing le­gal feud with Clive Palmer.

In March, Mr Palmer dis­missed sug­ges­tions CITIC could walk away from Sino Iron as “scare tac­tics”, say­ing the rest of its Aus­tralian busi­nesses could be on the hook if it quit the pro­ject un­der guar­an­tees pro­vided to his pri­vately owned re­source com­pany, Min­er­al­ogy, by its Chi­nese par­ent. But last week Sino Iron boss Chen Zeng told work­ers the com­pany’s board had de­ferred new cap­i­tal spend­ing at the pro­ject, de­signed to ex­tend its life and help ramp pro­duc­tion up to its name­plate 24 mil­lion-tonne-a-year run-rate, needed to make the pro­ject fi­nan­cially vi­able.

CITIC will de­fer a de­ci­sion on the ac­qui­si­tion of new min­ing fleet, and cap­i­tal works at the pro­cess­ing plant de­signed to im­prove the grade and qual­ity of the mag­netite con­cen­trate pro­duced at the Pil­bara mag­netite mine.

Crit­i­cally, a de­ci­sion to build new tail­ings stor­age fa­cil­i­ties has also been de­ferred in the face of what CITIC says is an on­go­ing re­fusal by Min­er­al­ogy to sign off on ap­pli­ca­tions to the State Govern­ment for the ex­pan­sion — a re­quire­ment un­der the pro­ject’s State Agree­ment.

With­out the ap­proval, CITIC will have nowhere to store the vast quan­ti­ties of waste rock pro­duced by the low-grade min­ing op­er­a­tion.

Its lawyers told the Supreme Court in Jan­uary State Govern­ment ap­proval was needed for the ex­panded stock­piles and waste stor­age fa­cil­i­ties by the mid­dle of the year, or Sino Iron would grind to a halt.

“Af­ter thor­ough con­sid­er­a­tion, the board of di­rec­tors has de­cided it sim­ply can­not rec­om­mend such a ma­jor in­vest­ment un­til the im­me­di­ate threats to the con­tin­u­a­tion of our op­er­a­tions have been ad­dressed, ” Mr Zeng told staff.

“Some of Min­er­al­ogy’s claims threaten our abil­ity to con­tinue op­er­a­tions, oth­ers af­fect the eco­nomic vi­a­bil­ity of the pro­ject.

“Res­o­lu­tion re­quires the co­op­er­a­tion of all par­ties, in­clud­ing the State of WA.”

A con­cen­tra­tor at CITIC's Sino Iron mag­netite pro­ject.

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