Axiom eyes legal win over Japanese giant Sumitomo – by Sarah-Jane Tasker (The Australian – September 23, 2014)

http://www.theaustralian.com.au/business

AUSTRALIAN-listed minnow Axiom Mining is confident of winning its “David versus ­Goliath” battle with Japanese giant Sumitomo Metal Mining to develop one of the world’s largest nickel laterite deposits.

Axiom chief Ryan Mount is undaunted by his battle opponent, a metals major and Japan’s No 2 copper producer, and is hopeful that when the judge delivers his decision this week on the project, in the Solomon Islands, Axiom will win.

In what has been the longest-running and most expensive case on the Solomon Islands, Sumitomo has fought to be recognised as the developer of the nickel asset, after it was taken off the Japanese giant and given to Axiom by the traditional owners of the land.

Analysts have estimated that Axiom has spent more than $10 million on its court action. They have also outlined that Sumitomo spending millions to challenge Axiom’s ownership of the Isabel project was a clear indication that the asset was of great significance to a major company.

“It was worth pursuing. It will be of significant value to our shareholders. We feel confident as to our rights on this matter,” Mr Mount said. “We didn’t initially believe it would take this long.”

Sumitomo won an international tender for prospecting licences over the project in 2010. The licences were cancelled in 2011 and similar rights were later awarded to Axiom.

The junior explorer had strategically aligned itself with the local landowners, who have right of veto over who can develop an asset.

Mr Mount, who is based in the Solomon Islands and speaks the local dialect Pijin, said it was ­important for developments to have landowner consent.

“It is ingrained in the constitution and in the mines legislation, while you can get government ­approval, you must have the landowners’ consent also,” he said. Axiom’s agreement to develop the project included giving the indigenous landowners a 20 per cent interest in the mine.

The Isabel project is hyped as a “world class” nickel laterite ­deposit.

The majority of nickel is produced from sulfide deposits, as it is easier and cheaper to mine and process than lateritic ore.

But known sulfide deposits, which are large in scale and of high nickel grade, are depleting, meaning a higher proportion of future production is expected to come from laterite deposits.

“The Indonesian government has also banned the export of unprocessed laterite ore, which has made this asset more valuable in recent times,” Mr Mount said.

For the rest of this article, click here: http://www.theaustralian.com.au/business/mining-energy/axiom-eyes-legal-win-over-japanese-giant-sumitomo/story-e6frg9df-1227067002839