Fed: Alcan goes to Supreme Court to protect mining rights

AAP General News (Australia)
04-23-2004
Fed: Alcan goes to Supreme Court to protect mining rights

BRISBANE, April 23 AAP - The fight over the future of bauxite reserves in far north
Queensland intensified today with mining multinational Alcan going to the Supreme Court
to defend its right to mine the site.

Aluminium Pechiney Holdings, a subsidiary of Alcan, today filed in the Supreme Court
its case for defending the company's right to the Aurukun bauxite reserves it has held
since 1975.

Queensland government earlier this week introduced legislation to cancel Pechiney's lease.

Alcan Bauxite and Alumina Pacific Operations president Richard Yank described the move
by the Queensland government as disturbing.

He said legal proceedings, which were well under way and for which the defence filing
was required today, were initiated by the government in October last year.

"Although it's clear that the government's intention to introduce legislation is aimed
at bypassing its previous commitment to a legal process, we strongly believe in our rights
to retain the Aurukun lease and therefore, we would still welcome the opportunity to defend
our position in court," Mr Yank said.

Pechiney first gained rights to the site on the remote Cape York peninsula in 1975
but failed to commence construction of an alumina refinery despite a 1988 expiry limit.

Global demand for bauxite and its final product aluminium has risen dramatically in
recent years, particularly on the back of the accelerating rise of development in China.

Last year the state government called on Pechiney, which was taken over by Canadian
aluminium giant Alcan in December 2003, to surrender the lease to enable the lucrative
site to be opened up to new expressions of interest.

Supreme Court action was initiated by the state government last October after Pechiney
failed to surrender the lease.

Mr Yank said Alcan will examine the legal issues relating to the viability of any international
tender process initiated by the government should it choose to ignore legal due process.

He said Alcan last year told Queensland Premier Peter Beattie it would immediately
commit $15 million to complete a feasibility study to determine the economic viability
of both the bauxite mine and alumina refinery on the Aurukun land.

"Our track record in Queensland is exemplary and, unlike other major projects that
have recently failed or are currently struggling in Queensland, Alcan has the proven ability
to make it happen," he said.

Mr Yank said while the government alleged Pechiney was in breach of the legislation,
it still collected rent, consulted the company over water rights and native title claims,
held numerous meetings and engaged in correspondence.

AAP ch/sc/pw/bwl

KEYWORD: PECHINEY

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