Even though Gindalbie Metals doesn’t like the proposed resources super tax, it is continuing with its huge WA iron ore project.
The company said yesterday in a statement to the ASX and at briefings that the value of construction and development work at its Karara iron ore project will reach $1 billion within months.
"Orders in recent months for items such as a dual wagon tipper, water pipeline, magnetic separators, rail and pressure filters have lifted the total commitments for Karara to approximately $700 million as activity on site at Karara, 225km east of Geraldton, continues to gather pace.
"The award of a further $300 million of major new construction, equipment and services contracts in coming months will see the project hit the $1 billion milestone and cement Karara’s position as the most advanced major project development in the Mid West region of WA.
"Some of the major new service and construction contracts expected to be awarded include a facilities management contract to manage the Karara and Lochada accommodation villages, the construction of the 85km Karara rail spur connecting the project with the existing rail line near Morawa, the installation of the 140km water pipeline from Mingenew to site, civil work at Geraldton Port and the construction of access roads."
"The award of these substantial new contracts demonstrates our confidence in the project and our commitment to progress full steam ahead at Karara, even as we finalise the debt funding arrangements and recently announced equity raising," Gindalbie managing director Garret Dixon said in the statement yesterday.
"The award of these contracts brings to the forefront the flow-on benefits to the broader economy which major mining projects such as Karara generate for Australian workers and businesses right across the country."
That is despite Gindalbie’s recent public opposition to the federal government’s proposed resources super profits tax (RSPT).
Construction at Karara is proceeding to schedule and Gindalbie said it and its partner Ansteel are currently finalising the security arrangements and final documentation for the US$1.2 billion Karara Project Loan facility and the recently announced $175 million equity raising to underpin project construction and working capital, both of which are subject to shareholder approval at meetings which have been convened respectively for 16 June and 28 June.
The Karara Iron Ore Project is 225km east of Geraldton and will deliver initial production of Direct Shipping Ore (DSO) hematite from the middle of 2011, to be followed by production of high grade magnetite concentrate and blast furnace quality pellets in the second half of 2011.
Karara is being developed through a 50:50 Joint Venture with Ansteel, China’s second largest steel maker and largest iron ore producer.
Gindalbie shares rose 1.5c to $1.03 yesterday.
