April 10th, 2013

Magnetite Start-Up Producers Appeal for Longer Lead Time to Important Royalty Policy Change

Wednesday, 10 April 2013

MagNet welcomes and strongly supports the Premier’s further royalty rebate announcement made on 9 April, 2013 and applauds the Premier for his vision in backing the development of this State’s emerging magnetite industry. The Premier deserves much praise for his foresight in demonstrating the State’s confidence in a new industry and will no doubt be criticised for it by those who do not grasp the benefits that magnetite projects will bring to this State.

The opening of the Karara project yesterday is a huge milestone for this new West Australian magnetite industry and the Premier’s announcement provided the icing on the cake for that project.

“To ensure that Western Australia maximises the chance of securing extra foreign investment it is vital that the Premier extends this policy beyond the three years as announced yesterday. I am encouraged that the Premier has said this ‘may’ occur and the Magnetite Network will keep lobbying to make sure that our State has the most competitive state royalty regime in Australia.

Western Australia must continue to send a very loud and clear message to potential investors that the State Government fully understands that magnetite exists all over the world and it is willing to forgo some short term revenues to attract long term large investment into the magnetite industry in Western Australia” Ms Anwyl said.

“The Premier’s clear acknowledgement yesterday of the capital and energy intensive nature in getting these projects up and running is very important, as investors need to be confident that governments in Australia will compete to ensure that these long-term operations are constructed in their State.”

The Karara project, a joint venture of Gindalbie and AnSteel, that was opened yesterday and the CITIC Pacific Mining Sino Iron project that has just commenced production  are likely to be the only two projects to benefit from the Premier’s announcement as it currently stands.

MagNet notes that each of these projects made final investment decisions as long ago as 2007.

MagNet will continue to lobby the Premier and his Cabinet for a much longer timeline for this incentive to apply so that investors in new projects can expect royalty rebates during the start-up phase which will mean Western Australia will maximise investment attraction outcomes.

Contact Megan Anwyl – Executive Director on 0417 949 900 or megan@anwyl.com.au

 

www.magnetitenetwork.com.au

MagNet has 5 current members – Asia Iron Australia Limited, Atlas Iron Limited, CITIC Pacific Mining, Gindalbie Metals Limited and Iron Ore Holdings.

In addition to the Gindalbie Metals – AnSteel joint venture Karara project & CITIC Pacific Mining’s Sino Iron project that are in production (a combined capex of about $10.5 billion), there are at least 12 projects proposed, approved or under pre-construction in Western Australia that will mine and process magnetite concentrate and/or pellets with more than $20billion capex collectively. These include the Asia Iron Australia Limited Extension Hill project in the Mid West region.