WESTERN Australian mining company Precious Metals Australia has vowed to continue its David and Goliath battle with former joint venture partner, Swiss mining giant, Xstrata over the latter’s controversial decision to close the Windimurra vanadium mine.
Last week, in rejecting an offer by Xstrata to sell the mothballed mine for $80 million, PMA said it would be pursuing legal action against the Swiss miner.
Offers closed on Friday after Xstrata gave potential buyers four days to table a fully-funded offer for what had not already been sold from the mine.
In his letter to Xstrata, PMA executive director Roderick Smith says despite PMA’s attempts to make an offer for the mine as a going concern, Xstrata’s conduct was preventing a sale.
Mr Smith says Xstrata’s offer was unreasonable given the timeframe and not genuine because it had already sold critical components of the plant.
Instead, Mr Smith wrote, it was PMA’s belief that Xstrata’s conduct in relation to a royalty sharing agreement with PMA, as well as the sale of some of the Windimurra plant and equipment was unlawful.
“We believe your [Xstrata’s] conduct shows a reprehensible attitude towards our rights which we will be pursuing to the full,” he says.
“On legal advice we reserve all our rights and remedies against you [Xstrata].”
Windimurra CEO Anthony Simpson, who was recently appointed managing director of local gold explorer Aurex Consolidated Limited, did not return calls from WA Business News.
Xstrata, which also operates a significant vanadium mining operation in South Africa, announced its intention to close Windimurra permanently last month citing doubt over the long-term viability of current high vanadium prices.
The move has drawn concern from the both sides of WA politics, the Construction Forestry Mining and Energy Union, as well as PMA.
In response to the Windimurra move changes to the WA Mining Act, under which Xstrata’s assets could be frozen, were suggested and flatly rejected by industry groups.
Late last week State Development Minister Clive Brown said he would not rule out the WA Government playing any further role in the matter but stressed government was not in business.
He said, given the initial investment by the previous Government which facilitated Windimurra’s development, a State Agreement with the mining company should have been entered into.
