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Emerging iron ore miner Gindalbie Metals Ltd expects to spend $80.4 million developing its near-$2 billion Karara project in Western Australia's midwest region during the September quarter. The company expects to award $300 million worth of new construction, equipment and services contracts in the next two and a half months. This will bring project commitments to $1 billion following the award of $700 million worth of mining equipment orders in the June quarter. The Perth-based company has joined a call by several other miners including Fortescue Metals Group Ltd for magnetite iron ore to be excluded from the Gillard government's proposed mineral resources rent tax (MRRT). "Gindalbie has begun consultations with government officials in an attempt to have magnetite exempted from the MRRT," Gindalbie said in a statement on Tuesday. "Gindalbie believes the Karara project should be exempt from MRRT because as a magnetite project, a large amount of value-added processing is required to produce a premium iron ore concentrate. "In this regard, Karara is more comparable to a nickel or bauxite project, both of which have been exempt from the MRRT." If magnetite was not exempted from the MRRT, the impact of the new tax on Karara would still be minimal, Gindalbie said. This would be "because of the low value of the magnetite ore prior to processing if the taxing point is consistent with government advice that it will be at the point the resource is mined". Production of hematite iron ore at Karara is slated to commence in mid-2011, to be followed by magnetite concentrate and pellet iron ore production in the second half of next year. Shares in Gindalbie were down two cents, or 1.96 per cent, at $1.00 at 1513 AEST.