CSM consolidated minerals limited

from the west australian today, page-2

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    The following from today's Australian Alan........

    Pilbara Plan Starts To Fray.
    By Robin Bromby

    ANDREW Forrest's ambitious plans for a new iron ore empire in the Pilbara are beginning to look threadbare just days after being unveiled.

    The company planning development of the enormous Hope Downs project in Western Australia – which is vital to the plan – said Mr Forrest was yet to convince them he had anything to offer.
    Mr Forrest's Fortescue Metals Group plans a $1.2 billion infrastructure project, including a 400km railway and loading berths at Port Hedland, with spur train lines to its own Mt Nicholas deposit and also to the Hope Downs project in Western Australia.

    Hope Downs is controlled by Gina Rinehart's Hanc*ck Prospecting and South African minerals giant Kumba Resources.

    Hope Downs Management Services project manager Russell Tipper told The Australian last night his shareholders were finalising a list of those companies they are prepared to supply information memorandum for being part of their project.

    "At this stage, Mr Forrest's company is not on that list," said Mr Tipper. Fortescue would be considered only if it brought a proposition that added real value to the Hope Downs project's need for a rail and port operation. He said Fortescue's Mt Nicholas project was so early in the development stage it would not have a reserve figure for some years.

    As such, any financing of the railway would have to be based on Hope Downs, where there was 450 million tonnes of iron ore in just one of the deposits.

    The Hope Downs partnership would not be interested in any proposition that rode off the back of its project. "It's hard to see where this thing adds value for us," Mr Tipper said.

    Mr Forrest would have to come up with a convincing proposition for that view to change. The Hope Downs company, which has retained Citigroup as adviser, was also unimpressed by Mr Forrest's claim to have access to financing from the US.

    "The US is Citigroup's back yard," Mr Tipper said, suggesting the investment bank would be aware of any money that was available for the project.

    Meanwhile, Consolidated Minerals said yesterday it had formed a joint venture with Fortescue to evaluate and develop its Mindy Mindy iron ore deposit. A rail line built to Hope Downs would cross the Mindy Mindy property. But Consolidated managing director Michael Kiernan said his company saw Mr Forrest as being "an extraordinary promoter" and able to raise large sums of capital.

    "Some people shake their heads about Andrew but he's a proven entrepreneur," Mr Kiernan said.

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