UPDATE 1-Xstrata sees chance for zinc mine revamp to proceed

SYDNEY, May 2 (Reuters) – Xstrata Plc (XTA.L: Quote, Profile , Research) said on Wednesday a government bill being introduced in Australia would validate its proposed redevelopment of the McArthur River zinc mine.

An Australian court on Monday ruled against a A$110 million ($92 million) redevelopment of the mine over a glitch in the approval process after a challenge by local landowners.

Swiss-based Xstrata said it had welcomed a move by the Northern Territory government on Wednesday to introduce a bill amending the McArthur River Project Agreement Act to validate an earlier authorisation by the territory’s mines minister to proceed with the controversial revamp of one of the world’s biggest zinc mines.
If the bill passes, civil works and mining would restart at the mine, Brian Hearne, managing director of Xstrata subsidiary Mcarthur River Mining said.

Xstrata wants to dig a new open pit at the mine to replace an ageing underground operation that is running out of rich ore, requiring the diversion of the McArthur River for 5.5 km (3.4 miles). It was granted permission by the Ministry of Mines to proceed last year after a lengthy legal battle, only to have that decision overturned on Monday.

The latest legal challenge came from the Yanyuwa, Mara, Garrawa and Gurdanji traditional owners from McArthur River.

If the bill passes, traditional owners “will be devastated,” Northern Land Council chief executive Norma Fry said. They plan to continue their fight against the mine, she said.

Wed May 2, 2007 8:52 AM BST

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