Atlantic, the owner of the troubled Windimurra vanadium operation in the Mid West, is contemplating claiming as much as $100 million in costs and damages from erstwhile project partner Mineral Resources.
An Atlantic spokesman last night confirmed it was considering legal action against Mineral Resources to recoup the cost of repairs to Windimurra's crushing, milling and beneficiation circuit as well as damages resulting from lost profits at the mine.
Windimurra's processing circuit has been Atlantic's Achilles heel, causing it to spend about $14 million on repair work alone and significantly delaying the production of vanadium.
Work has included rebuilding the second and tertiary crushers, installing a new repulper and two screens.
Atlantic disclosed in its December quarterly report, released on Monday night, that it was "investigating legal action in relation to the Windimurra CMB circuit". "The company has spent significant sums to date to rectify issues in the CMB circuit, in addition the company has suffered losses arising from these issues," Atlantic added.
The Michael Minosora-run Atlantic did not name Mineral Resources in its quarterly report. But a spokesman last night confirmed that any action to recover costs and damages would be directed at Mineral Resources, which had built the beneficiation plant and sold it to Atlantic in 2010.
The spokesman said the total damages bill could be up to $100 million, given that rectification and modification work alone cost $14 million.
Mineral Resources managing director Chris Ellison last night said his company had not heard from Atlantic.
"We are totally unaware of the fact that they are even considering doing that," he said. "We haven't heard a word about it. They have no ground to go down that path."