Xstrata finally makes payment

Amazing what happens when a bit of pressure is applied. It seems the open-cut mine is being credited with improving profitiability before it has even been developed. I wonder if the 26 million had anything to do with Clare Martin’s support for this project? what is the going rate for some ‘quick fix’ legislation to help a  mate? no wonder the Traditional owners couldn’t get a fair hearing.

 From Rueters

Swiss-based mining company Xstrata  said on Monday it had made an initial royalty payment to Australia’s Northern Territory government from its McArthur River zinc and lead mine, where it is appealing a court ruling against a major revamp.

Xstrata has been proceeding with construction work to transform the underground lode into an open pit mine while awaiting the outcome of an appeal over a court ruling that said the Northern Territory government failed to follow the correct legal procedure when it approved the revamp.

Xstrata has warned that if it not allowed to dig an open pit at the site — costing A$110 million ($96 million) — it will be forced to close the mine, which opened in 1995.

The company said it had made a royalty payment of A$13.06 million to the Northern Territory government, representing half the total payment for calendar 2007.

“Payment of royalties is largely dependent on global commodity prices and the recovery of costs of both the mine’s establishment and the open pit development,” Xstrata said in a statement Monday.

Xstrata wants to dig an 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 won approval from the Territory’s Ministry of Mines last year, but the decision was overturned by a legal challenge by traditional Aboriginal land owners. Environmentalists fear that prolonged rainy seasons pose a risk that contaminated seepage from mining and milling will reach the 300-km long McArthur River.

A changeover would give the mine the capacity to produce about 430,000 tonnes of zinc and lead-bearing concentrate a year, up from 320,000 tonnes.

It would also carry the potential to produce a bulk-type concentrate, or ground ore, with lower lead content, which could be processed in conventional smelters, the company said.

McArthur River yielded 135,000 tonnes of zinc in concentrate last year, but output was expected to be less than half that this year, allowing for the pre-stripping work needed for the move to an open pit. ($1=A$1.15)

Rueters…

2 responses to “Xstrata finally makes payment

  1. Classic. Is this really the first royalty payment ever from MRM? I’m with you… suddenly there are royalties when their expenditures must be through the roof! Does it even cover their energy subsidy to date? I’m shaking my head at the audacity of MRM: “Oops, we were going through our numbers and here’s a cheque.” Hope the court costs were significant. No doubt MRM cut a cheque covering the NT Govts costs too. They really are disgraceful.

  2. I am concerned about the seeming inaction by all parties related to Mount Isa town residential area heavy metal pollution by Mount Isa Mines Ltd. and now by Xstrata. I am particularly concerned about older people who have llived all their lives in the town. Lead and cadmium are accumulative. While children are clearly the first target for study, I feel older people who have spent most of thier lives in the town also need attention

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