Jun 4, 2010 - Australian bauxite explorer Cape Alumina Limited has put its flagship A$1.2 billion ($1 billion) Pisolite Hills bauxite mine and port project under review after the Queensland state government declared the Wenlock River near the project site a protected environment area.
Work on the project's bankable feasibility study, which had been due for completion by year-end, and key environmental and indigenous land use agreements have been put on hold pending an internal review of the ruling, the company said in a statement.
An environment impact statement for the project had been due for completion within weeks as part of a schedule that had targeted construction commencing in 2012.
The state government has defined the Wenlock River Basin in the western Cape York region of the state a Wild River Area under state law and designated a 500 m area around Cape Alumina's Coolibah Springs project site a High Preservation Area, reventing any mining activity.
Cape Alumina says its scientific studies show a 200 m buffer zone is adequate to protect the river. Losing access to the additional 300 m would reduce the available resource at the project by 30%, the company says.
"Our Pisolite Hills mine and port project, as it presently stands, is no longer viable," company managing director Paul Messenger said in a statement in response to the ruling.
The company is now reviewing all its operations in the western Cape York region and will explore all avenues for appeal and compensation, he said.
"The Queensland government's declaration flies in the face of scientific evidence by setting the buffer zone at an arbitrary 500 m and sterilizing almost 30% of the bauxite reserves in the area," he said. "We now need to review the project based on the reduced available resource and, therefore, the shortened life of the mine before we can proceed any further."
Cape Alumina says its modeling had forecast the project would contribute A$1.2 billion to Australia's GDP and create or sustain 1,700 jobs in the remote region over its planned 15-year mine life.
The Pisolite Hills project is located 50 km northeast of the town of Weipa and 34 km from a planned stockpile and barge loading site on Port Musgrave. A Preliminary Feasibility Study of the project was completed in July, 2008.
The company in October 2008 signed an offtake agreement with major China alumina and aluminium producer Xinfa for the sale of 1 million mt/year of bauxite from the project and says it had been in talks with refineries in China over further sales.
The project had an estimated resource of 132.4 million mt of bauxite, of which 27.5 million mt was measured, 56.1 million mt indicated and 48.8 million mt inferred at an average grade of 53.1%, and further exploration of the company's 2,100 sq km of surrounding tenements had been underway. The mineralization was considered suitable for blending feed for the new generation of Chinese low temperature alumina refineries, Cape Alumina said on its web site.
Queensland's Minister for Natural Resources, Stephen Robertson told ABC radio that the declaration "struck the right balance between environmental protection and sustainable development."
"Mining, grazing, tourism and other developments can still occur where they do not threaten the river," he said.
The Wenlock River Basin runs through the Steve Irwin Wildlife Reserve and has been the focus of a long-running tussle between miners and environmentalists.
Work on the project's bankable feasibility study, which had been due for completion by year-end, and key environmental and indigenous land use agreements have been put on hold pending an internal review of the ruling, the company said in a statement.
An environment impact statement for the project had been due for completion within weeks as part of a schedule that had targeted construction commencing in 2012.
The state government has defined the Wenlock River Basin in the western Cape York region of the state a Wild River Area under state law and designated a 500 m area around Cape Alumina's Coolibah Springs project site a High Preservation Area, reventing any mining activity.
Cape Alumina says its scientific studies show a 200 m buffer zone is adequate to protect the river. Losing access to the additional 300 m would reduce the available resource at the project by 30%, the company says.
"Our Pisolite Hills mine and port project, as it presently stands, is no longer viable," company managing director Paul Messenger said in a statement in response to the ruling.
The company is now reviewing all its operations in the western Cape York region and will explore all avenues for appeal and compensation, he said.
"The Queensland government's declaration flies in the face of scientific evidence by setting the buffer zone at an arbitrary 500 m and sterilizing almost 30% of the bauxite reserves in the area," he said. "We now need to review the project based on the reduced available resource and, therefore, the shortened life of the mine before we can proceed any further."
Cape Alumina says its modeling had forecast the project would contribute A$1.2 billion to Australia's GDP and create or sustain 1,700 jobs in the remote region over its planned 15-year mine life.
The Pisolite Hills project is located 50 km northeast of the town of Weipa and 34 km from a planned stockpile and barge loading site on Port Musgrave. A Preliminary Feasibility Study of the project was completed in July, 2008.
The company in October 2008 signed an offtake agreement with major China alumina and aluminium producer Xinfa for the sale of 1 million mt/year of bauxite from the project and says it had been in talks with refineries in China over further sales.
The project had an estimated resource of 132.4 million mt of bauxite, of which 27.5 million mt was measured, 56.1 million mt indicated and 48.8 million mt inferred at an average grade of 53.1%, and further exploration of the company's 2,100 sq km of surrounding tenements had been underway. The mineralization was considered suitable for blending feed for the new generation of Chinese low temperature alumina refineries, Cape Alumina said on its web site.
Queensland's Minister for Natural Resources, Stephen Robertson told ABC radio that the declaration "struck the right balance between environmental protection and sustainable development."
"Mining, grazing, tourism and other developments can still occur where they do not threaten the river," he said.
The Wenlock River Basin runs through the Steve Irwin Wildlife Reserve and has been the focus of a long-running tussle between miners and environmentalists.
