KEY POINTS:
Australia's Fortescue Metals - the self-proclaimed "new force in iron ore" - is interested in the West Coast's iron sands, according to The Australian newspaper today.
The Pilbara iron ore miner has lodged several applications for exploration on the West Coast via New Zealand subsidiary, FMG Pacific.
Fortescue's
attempt to stake a mining claim over much of the West Coast has angered the local mining industry.
It has asked Crown Minerals for a two-year permit for the prospecting rights to 23 minerals including gold, coal, silver, copper, platinum, titanium and ilmenite.
The West Coast Gold Miners' Association says the application is a threat to all mining operations, but in particular the alluvial gold miners.
FMG has lodged four applications covering 3997 square kilometres - virtually the entire West Coast - and other applications for rights to large tracts of land elsewhere in New Zealand.
Fortescue is looking to test the ground for iron sands, which are already dredged along the west coast of the North Island.
BlueScope processes 1.2 million tonnes of iron sands from its Waikato North Head mine into 600,000 tonnes of raw steel a year, and also exports sands from its Taharoa mine to customers in northern Asia.
The Australian said it was thought Fortescue decided to peg the New Zealand ground - its first foray outside Western Australia - when one of its geologists identified it as a prospective region.
Otago University geology lecturer J Michael Palin said the South Island iron sand deposits had not been exploited to the same degree due to a lack of infrastructure and a rougher coastline.
The deposits were nowhere near as prospective as those in the Pilbara for large-scale mining operations, but the iron sands product was relatively cheap to mine and could be exported to niche steel producers.
"You're not looking at big, bulk markets," Dr Palin said. "What you are looking at are specific, lower-tonnage applications."
In its June quarter report yesterday, Fortescue said it planned to undertake limited testing for iron sands if it was granted the 4000 square kilometres of exploration ground it requested. It lodged applications covering another 20,000 square kilometres in the present quarter.
But Fortescue warned the process of obtaining the leases was likely to be "long and widely consultative", partly due to opposition from small-scale, alluvial goldminers in the region.
Meanwhile, Fortescue is continuing to raise production at its Pilbara operations.
In May, it sent its first iron ore shipment to China, where it has 10 Chinese steel mill contracts. FMG has also built a mine, a railway and a new port at Point Anderson, and its trains are among the heaviest in the world.
The company has shipped more than 4 million tonnes of iron ore since May, giving it about US$310 million ($423 million) in revenue.
A Crown Minerals spokesman said yesterday the department was already coming under fire from the mining industry for accepting the applications, but noted that the permits had not yet been granted.
He said Crown Minerals followed a "thorough process".
- NZPA
