ConsMin plans $40m spend on Pilbara mine (The Australian) Updated: 2010-05-17 09:51
CONSOLIDATED Minerals is ramping up exploration at its Australian manganese mine with plans to spend $40 million this year to cash in on increasing demand and higher prices for the steel feed.
Oleg Sheiko, the chief executive of Metals Solutions, which is owned by and provides advice to Consolidated Minerals owner Ukrainian billionaire Gennadiy Bogolyubov, said the company believed there was huge upside at its Woodie Woodie project in Western Australia's Pilbara region.
Mr Sheiko, who was in Australia last week to discuss the project, said the operation had achieved record production last year.
"Woodie Woodie was underexplored in previous years, and we have paid more attention than there has ever been at the mine. We have nine project areas," he said.
"The Chinese cycle is not going to last forever, but we are still optimistic for the next couple of years, which is why we are spending money on exploration and extending the life of our reserves."
Mr Sheiko said the company was exploring other areas outside Woodie Woodie -- more than ever before in the history of the company.
"We always believed in the exploration potential of the area and knew that in many cases the company was developing reserves without proper exploration . . . which has significantly changed since the ownership of the company changed," he said.
There are more than 100 targets in the Woodie Woodie region, and 60 targets at the Woodie Woodie mine.
The company is looking to spend around $40m over a total lease area of 5725sq km this year.
Mr Sheiko also said that ConsMin, which Mr Bogolyubov's Palmary Enterprises took over in 2008 in a $1.3 billion deal, had entered the first phase of due diligence with OM Holdings over plans to merge the companies' manganese operations.
He said that ConsMin expected its first visit from OM this week.
OM, which is based in Singapore but listed in Australia, revealed last month that the parties had signed a confidentiality agreement covering a possible transaction involving ConsMin's Woodie Woodie operation.
OM, which operates the Bootu Creek manganese mine in the Northern Territory, said it was considering "strategic, operating and/or marketing synergies" from buying a stake in Woodie Woodie.
It is understood OM could purchase Woodie Woodie in return for ConsMin raising its 12 per cent stake in OM through its Stratford Sun subsidiary.
