Gindalbie job losses blamed on ‘green tape’

Gindalbie Metals has blamed delays in receiving environmental approval for the $1.8 billion Karara iron ore project in the Mid-West for its decision to axe one in five jobs.

The 21 per cent cut to Gindalbie’s workforce, which will make 24 out of 113 positions redundant, includes Andrew Munkton’s position as operations general manager.

Gindalbie, which also blamed the global financial crisis for the cost-cutting measure, said it would cancel activities such as regional exploration to focus solely on Karara.

In addition to the exploration team, other jobs to face the cut relate to Karara’s start-up, which is facing delays because of troubles to obtain all the necessary regulatory approvals.

Only two key approvals remain outstanding — environmental goahead from the WA Government and Chinese sign-off for AnSteel to inject $162 million into Gindalbie.

Chinese approval is expected any time.

But doubts remain over the timing of the environmental approval, given that Gindalbie appealed against part of the Environmental Protection Authority’s recommendation to conditionally allow Karara’s development. Gindalbie expects to have to wait at least another three months before receiving final government go-ahead.

Only two years ago Gindalbie had targeted first magnetite production from Karara by next year. The target date has since been pushed back to the first half of 2011, if Gindalbie is able to start construction by the December quarter this year.

“We are not cutting staff because the project has stopped,” a Gindalbie spokesman said yesterday.

“It’s going ahead but it has been delayed and we are cutting back on regional exploration.”

Gindalbie is not the only Mid-West iron ore hopeful struggling to deal with the lengthy regulatory process.

The Chinese-owned Sinosteel Midwest is appealing against an adverse EPA recommendation regarding development of its Koolanooka-Blue Hills hematite project.

The two-week appeals period closed last night and a Sinosteel spokesman said it was encouraged by the show of support its had received from a cross-section of the Mid-West community keen to see the iron ore project developed.

As well as much-needed jobs in the region, Gindalbie and Sinosteel are being relied on to provide iron ore to underpin the development of the public-private $1.5 billion Oakajee port project, north of Geraldton.