MEDIA RELEASE
29 May 2007
PMA SECURES WINDIMURRA GAS SUPPLY
Precious Metals Australia
(ASX:PMA) has announced it has secured supply of natural gas from the
North-West Shelf to its world-class Windimurra vanadium mine, under development
600km north east of Perth.
PMA has signed agreements
worth $35 million over three years for the purchase and delivery of natural gas
to the Windimurra mine, making it the largest gas supply project in the Mid
West. The supply agreement includes an option to extend for a further three
years, providing longer-term security for the project.
PMA Executive Chairman
Michael Kiernan said this was a milestone gas supply agreement, which provided
long-term security for the operation of this project.
“Gas represents the
largest single operating cost for this project, and execution of these
contracts provides further confidence for the project as it moves from the
detailed design to the construction and operational stage,” Mr Kiernan
said.
“With finance and funding well advanced, senior
management positions filled and core mining infrastructure in place, PMA is
poised to commence production at Windimurra mine early in 2008,” Mr
Kiernan said.
A Part Haul Shipper
contract for the transmission of gas from the North West gas field to the MidWest Gas
Pipeline takeoff via the Dampier to Bunbury Natural Gas Pipeline has been
signed with the pipeline operator, DBNGP (WA) Transmission Pty Ltd. The
contract for a term of 15 years secures Windimurra’s place in the Stage
5A expansion of DBNG due for completion in March 2008.
A Gas Transportation
Agreement has also been reached with Horizon Power and APT Pipelines (WA) Pty
Ltd for the transmission of gas from the DBNGP to the Windimurra Vanadium mine,
via the Mid West Pipeline, for a term of 15 years. This 365km gas pipeline was
originally built to facilitate development of Windimurra in 1999.
All gas purchase and
delivery agreements have been conducted through PMA’s 90% subsidiary,
Windimurra Vanadium Pty Ltd. The
gas will be used to fire the existing rotary kiln at Windimurra, and to power
the 18.5MW gas turbine power station. The first three of four gas turbines
being built for the Company by Solar Turbines of USA, will leave the factory
next month.
Gas is an essential fuel
for the Windimurra vanadium mine, and its use is unique in the vanadium
industry. Roasting the ore concentrate with natural gas has previously been
shown at Windimurra to yield a higher purity vanadium product than is produced
by competitors who use pulverised coal.
PMA is currently
redeveloping the Windimurra mine, with first production in early 2008. The mine
is expected to produce 6,200 tonnes per annum of ferrovanadium, which will
represent approximately 8% of the world market.
For
Further enquiries call:
Michael Kiernan Warrick Hazeldine
Chairman Purple Communications
Tel: +61 (0) 8 9324 7000 Tel
+61 (0) 89485 1254
Mob: 0418 904 165 Mob:
0417 944 616
Background
Precious
Metals Australia (PMA) is a ferro-alloys company based in Perth, Western
Australia and listed on the Australian Stock Exchange (ASX:PMA). PMA’s
focus is the development of the Windimurra Vanadium Mine, located 600km north
east of Perth
in WA’s Mid-West region.
PMA has
a strategic alliance and off-take agreement with leading global supply chain
manager, Noble Group Limited, based in Hong Kong.
Noble has agreed to purchase the total vanadium output of the Windimurra mine,
at prevailing market prices for the first seven years of production.
Originally
discovered by PMA in 1985, Windimurra contained the largest report vanadium
Prove Ore Reserve in the world with current mineable reserves of 56 million
tonnes at a bulk grade of 0.46% V205 (vanadium pentoxide), which will underpin an
initial mine life of 16 years at the proposed mining rate of 3.4mtpa. A total
of 148 million tonnes of resources have been modelled in order to meet at least
the first 20 years of mining.
The
Windimurra mine was built b y PMA with a joint venture partner in 1999, and,
whilst operating, was the world’s largest primary vanadium mine, and
gained recognitions as one of the highest-quality sources of vanadium in the
world market.
Since
2003, world demand for vanadium and the prices of the commodity have increased
strongly, largely driven by growth in Chinese steel production. Marketing
studies commission by PMA forecast that vanadium demand will continue to
increase through 2015 by a compound annual growth rate of 7.8%.
For more information, please visit www.pmal.com.au
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