CSM consolidated minerals limited

from the west australian today

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    Forrest cash skills crucial to ore project

    By John Phaceas



    CONSOLIDATED Minerals hopes its Mindy Mindy iron ore project will ultimately produce up to 10 million tonnes of ore a year if joint venture partner Andrew Forrest can secure $1.2 billion needed to build independent port and rail facilities in the Pilbara.

    But ConsMin chief Michael Kiernan yesterday stressed that any development also hinged on exploration success at the former BHP Billiton-owned project, 60km north-west of BHP's Newman operations.

    ConsMin, which operates the nearby Woodie Woodie manganese and Coobina chromite mines, confirmed yesterday it had entered a 50:50 joint venture with Mr Forrest's Fortescue Metals Group to evaluate the potential of the Mindy Mindy project.

    The tie-up forms part of Fortescue's grand plan to align a number of "stranded" iron ore resources in the Pilbara by constructing independent rail and port infrastructure needed to make them commercial.

    Though the Mindy Mindy tenements hosted no defined resources, Mr Kiernan said previous work suggested a continuation of the Yandicoogina ore formation now being mined by BHP and Rio Tinto.

    If the geological model proved correct, Mr Kiernan said, Mindy Mindy had the potential to produce between 7.5 million tonnes and 10 million tonnes a year over 20 years provided the project had access to port and rail facilities.

    "The academic theory indicates there may be a sunken paleochannel that could host something in the order of 300 to 500 million tonnes of iron ore, but without access to infrastructure, the project would not be viable," he said. "What this does, should we have exploration success, is guarantee access to the proposed railway line of the Fortescue Metals Group."

    Despite widespread scepticism that Mr Forrest will succeed in securing money for stand-alone infrastructure, Mr Kiernan said the former Anaconda Nickel head was confident of substantial support.

    "He has assured me that he has backing from the United States to fund a $1.2 billion railway line," Mr Kiernan said. "Andrew has a record as an astute raiser of capital . . . and one has to assume that as he has in the past been successful at raising funds, he'd be successful today."

    Mr Forrest, who stepped down as Anaconda chief in late 2001 in the wake of boardroom in-fighting over the miner's poor performance, said he enjoyed "overcoming" such doubts.

    He also confirmed he had received substantial interest from infrastructure financiers from North America, who expected to provide funding "in the earliest possible period".

    Mr Kiernan said the deal represented a low-risk option to facilitate development of Mindy Mindy should Mr Forrest's Pilbara strategy bear fruit.

    Under yesterday's agreement, Fortescue and ConsMin will contribute equally to all exploration and development work, with ConsMin to manage any development at Mindy Mindy.

    Mr Kiernan added that the joint venture also allowed for ConsMin to extend its operational control to other projects, though no discussions had begun about Fortescue's own East Pilbara iron ore project at Mt Nicholas.

    The partners would initially spend $500,000 on a "scout" exploration program in two to three months, before committing another $5 million to delineate resources by the end of 2004, he said.
 
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