Western Plains Resources (WPG) and Chinese state-owned steel producer Wuhan Iron and Steel (WISCO) yesterday announced they had agreed to extend the transaction deadline for their Hawks Nest joint venture by three months.
According to WPG, the extension will allow the partners more time to assess the impact of the Department of Defence’s decision to withhold its support for the investment last week. It will also allow all parties to return to the negotiating table.
The company’s chief executive Heath Roberts told MINING DAILY that WPG was encouraged by WISCO’s decision to extend the period to late-January 2010.
“WISCO is still very keen to participate in the project,“ he said.
“Their interest is on getting a foothold in a good iron ore project that will deliver a long-term supply of ore.
“They are not ready to hang up the boots yet.”
The partners had been negotiating access conditions with the Department in order to carry out a feasibility study for the Hawks Nest magnetite deposit, which is located within the Woomera Prohibited Area (WPA).
The companies were hoping for Defence’s blessings when the joint venture application was assessed by the Foreign Investment Review Board.
Roberts said that WPG had not had any contact with the Department since the letter arrived, but is expecting talks within the not-to-distant future.
He also thanked the South Australian Government for its support.
“The broader issue for the State and the other explorers and would-be miners in the area, is the level of uncertainty that this decision has created,” he said.
“A lot of money has been spent in the WPA over many, many years, so the State is keen to see a mutually acceptable outcome where Defence, mining and exploration can all co-exist.
“We believe that this can be achieved and it appears the State holds this view as well.”
Following the announcement of Defence’s position last week, South Australian Minister for Resources and Development Paul Holloway voiced his concerns that the decision would impact foreign investment opportunities in the state.
“The Government has worked hard over the past seven and a half years to establish South Australia’s international reputation as a relatively risk-free destination for investment in the resources sector,” he said.
“We will be seeking for Defence to return to the negotiating table with Western Plains, with a view to resolving these issues.
According to Holloway, 127,000 km² WPA currently comprises ore than 120 active exploration leases as well as the Challenger and Prominent Hill mines.
“It is unacceptable and certainly not in the national interest for an area of this size with some of the most prospective land in the world to be quarantined from mining operations,” he said.