The Age Wednesday 11 June 2003, 6:30 AM

A former Qantas baggage handler accused of being an al-Qaeda operative in Australia has strongly denied the claim, but describes Osama bin Laden as a "a good man".

Bilal Khazal worked at Sydney's international airport in the lead-up to the 2000 Olympics and a US Central Intelligence Agency (CIA) report has linked him to al-Qaeda.

The report, dated mid-June 2002 and based on intelligence from the Palestinian Authority, alleged he was planning attacks on US interests in Venezuela and the Philippines.

But Mr Khazal has told Channel Nine's A Current Affair program he does not have links to al-Qaeda but said he, "like any Muslim", believed Osama bin Laden was a good man.

He denied he had ever been to Afghanistan or met bin Laden, the head of al-Qaeda and the world's most wanted man.

"What do I think about him (bin Laden)? Like any Muslim. Like any Muslim ... (I) think he's good man," Mr Khazal said.

Transport Minister John Anderson said new security arrangements would stop people with suspected terrorist links being employed.

"People who hold ASIC cards, airport security cards, will now all face the toughest and most stringent background checks of any country in the western world including checks for political involvement and attitude," Mr Anderson said.

The secret CIA report said "the al-Qaeda leadership has allegedly delegated responsibility to Bilal Abdallah Khazal".

"Khazal is reportedly planning an explosives attack against some US embassies and the current target is in Venezuela," it said.

"Khazal also has plans to attack with explosives US interest in the Philippines."

The CIA reported that Mr Khazal was born in Northern Lebanon and moved to Australia in 1989, living on the outskirts of Lakemba in Sydney's southwest with his wife and two children.

He came to Australian authorities attention during a security review at Sydney airport and has since had his passport confiscated while he is investigated.

Mr Khazal told A Current Affair he left his job with Qantas because of a back problem.

He now runs an internet site for the Islamic Youth Movement in Sydney.

Iraqi workers inspect equipment at the Basra oil refinery in mid-May. Almost all of the 2,600 Iraqi employees at the plant are now back at work.  

By John W. Schoen MSNBC

June 10 —  When OPEC meets Wednesday in Doha, the cartel will probably leave production quotas just where they are. With crude oil prices high, and world stockpiles at historic lows, the case for cutting output is pretty hard to make. Mostly, they’ll be trying to assess the threat of a big new supply of Iraqi oil hitting global oil markets, as U.S. forces and Iraqi workers scramble to get that country’s oil industry back on its feet.             WITH OIL PRICES hovering above $31 a barrel, comfortably above OPEC’s price target of $22-$28, even the group’s most militant members will have a hard time making the case for cutting the current quota of 25.4 million barrels a day. Still, the big worry for the Organization of Petroleum Exporting Countries is that a bigger-than-expected flow of Iraqi oil could send prices falling quickly.        Iraqi officials last week began accepting bids for about 10 million barrels of oil in storage that was produced before the U.S. led invasion in March. Iraq’s de facto oil minister Thamir Ghadhban has said exports would reach a million barrels a day by July, about half pre-war levels.        But it’s a lot less clear how soon the country’s creaking oil infrastructure can be patched together well enough to begin exporting in significant volumes. Looting and sabotage since the war have left Iraqi oil facilities badly crippled. Some oil analysts say the current timetable for bringing Iraqi production back on line are too optimistic.

       “I think the market has overestimated the ability or Iraq to start pumping oil,” said Phil Flynn at Alaron Trading.

	       Still, some OPEC ministers are concerned that they may overshoot production if they continue pumping at current levels — especially if a soft global economy continues to hold back demand. Since the cartel last set quotas, tight supplies have eased from two key members. 

       Venezuela, where a lingering strike cut earlier this year production to below 600,000 barrels per day, was producing an average of 2.1 million barrels a day in April, according to a Lehman Brothers report. And Nigeria’s output has likely risen after falling to below 2 million barrels a day in April. Those outages helped drain reserves to about 100 million barrels below the historical range for this time of year, the report said.        All this means that OPEC wants to hedge its bets — even if it leaves production at current levels. One sign is that the group has invited seven non-OPEC members, including major producers Russia, Mexico and Norway, to coordinate another production cut if prices fall. OPEC is trying to head off another battle for market share between the two groups that sent prices sliding in late 2001.        Even if Iraqi production rises to pre-war levels quickly, oil prices may continue to draw support from extremely tight supplies.

       Meanwhile, shortages of natural gas have sent the price of that fuel soaring. Federal Reserve Chairman Alan Greenspan in Congressional testimony Tuesday said it’s not likely that natural gas prices will fall soon. That helps support oil prices because it eliminates a cheaper alternative to crude for businesses, like power companies, that can switch fuels.   High nat-gas prices seen into 2004        And, if oil prices do start falling again, there nothing to prevent OPEC from calling for a quick production cut.        “We are concerned because prices are high not because of a lack of oil, they are high because of uncertainty,” said Algerian Oil Minister Chakib Khelil on Tuesday. “If the conference comes out with no change it might be necessary to meet again before September.” OPEC’s next meeting is scheduled for September 24.

Playing now: • Dow down 29 points; Nasdaq adds 9 • Oracle raises bid for PeopleSoft • Kodak blames SARS for weak sales       The real worry is that, with U.S. forces in charge of Iraq’s oil production, OPEC now confronts a major new supplier under U.S. control. If Iraqi production rises quickly above pre-war levels, OPEC and other major oil producers will have to make a painful choice — either sharply cut production to maintain prices, or let prices fall and produce more oil to make up for lost revenues.        “They really don’t want to lose that market share,” said Robert Baer, a CIA veteran who now writes about the Middle East.        Reuters contributed to this story.

Reuters, 06.10.03, 4:12 PM ET  By Pascal Fletcher CARACAS, Venezuela, June 10 (Reuters) - Venezuela plans to free up this year a large bauxite deposit in which diversified miner BHP-Billiton <BHP.AX> has expressed an interest to develop a project to mine bauxite and produce alumina, an official said on Tuesday. Gen. Francisco Rangel, president of Venezuela's state industrial holding CVG, told reporters that before the El Palmar deposit could be offered for development, CVG first had to rescind an existing exploration contract held by Delta Minerals, a small privately held British firm. Rangel said Delta Minerals had held the El Palmar contract for more than a decade, but had failed to carry out any work. "What we have is a lack of compliance (of a contract), nothing was done for 12 years," he added. CVG, which handles mining contracts in Venezuela's mineral-rich southeastern Bolivar state, was negotiating with Delta Minerals to end the contract, in accordance with existing Venezuelan laws. "We will undoubtedly be making a decision on this case this year," Rangel said. He added that BHP-Billiton had asked to participate in the development of El Palmar. The initial $1.3 billion project foresees the construction of a bauxite mine and an alumina plant. It could also be expanded to include a primary aluminum smelter, which would increase the total projected investment to an estimated $4.3 billion. Rangel said Venezuela would award the new El Palmar contract either through a tender or selection, as suitable. Armando John, CVG's director of mining, said El Palmar, located in the northeast part of Bolivar state, contained estimated bauxite reserves of 150 million tonnes. Rangel told Reuters that CVG had drawn up a new national aluminum development plant which foresess a primary aluminum output goal for the future of three million tonnes. Venezuela's total aluminum output last year was just over 607,000 tonnes. But the CVG president declined to give a time frame or details of the ambitious expansion plan. CVG's Alcasa aluminum smelter has just signed a $650 million project with a consortium led by Swiss-based commodities group Glencore International AG to build a fifth production line that will more than double the plant's capacity to 450,000 tonnes.

June 10, 2003, 2:13PM Associated Press

NEW YORK - Oil prices rose to their highest close in 12 weeks today, a day ahead of an OPEC producer cartel meeting that is expected to postpone fresh supply cuts.

In New York, U.S. light crude settled up 28 cents at $31.73, the highest closing price since mid-March and up nearly 30 percent from a year ago. In London, benchmark Brent crude oil was up 20 cents at $28.05.

OPEC ministers meeting in the Middle East emirate of Qatar on Wednesday are widely expected to leave production limits unchanged as delays in the resumption of Iraq's oil exports have kept global supply tight.

Kuwaiti Oil Minister Sheikh Ahmad al-Fahd al-Sabah said on Tuesday he wanted OPEC to keep its current 25.4 million barrel per day (bpd) ceiling in place until it meets again in late September.

"From now to September, Iraq will still have a lot (to do) to reach the previous level of production ... we still have time to continue with our ceiling," the minister said.

After falling from 12-year highs near $40 after Middle East oil facilities escaped the U.S.-led invasion of Iraq without much damage, prices have rebounded to levels which could further undermine already weak economic growth.

High prices for rival fuel natural gas have raised concerns over the economic impact of rising energy costs.

"If we stay at these very elevated (natural gas) prices, we're going to see some erosion in a number of macroeconomic variables," Federal Reserve Chairman Alan Greenspan told a hearing of the House of Representatives Energy and Commerce Committee.

The Organization of the Petroleum Exporting Countries, which controls around half the world's crude exports, aims to keep prices in a range of $22 to $28 a barrel for its basket of crude oils. The basket was last valued at $27.53.

"High crude oil prices make an imminent cut to OPEC quota levels unlikely at its meeting on Wednesday," said Barclays Capital Research in London in its daily report.

"Instead the group is likely to flag up further meetings in July/August in order to monitor and accommodate Iraqi output."

Iraq this month will sell its first crude since the U.S.-led invasion, tendering 10 million barrels of stored crude oil. That would allow it to deliver an average of about 750,000 bpd during the second half of June.

Looting and sabotage at Iraqi oil facilities since the war will keep exports down to 1 million bpd in July, Iraq's de facto oil minister Thamir Ghadhban has said. Before the war, Iraq was producing about 2.5 million bpd and exporting 2.0 million bpd.

OPEC was also expected to press independent exporters such as Russia, Norway and Mexico to back any supply cuts needed later, OPEC President Abdullah al-Attiyah al-Attiyah said.

Two overnight refinery fires in Louisiana fueled today's price gains, strengthening concern that summer vacation driving demand could strain supplies.

U.S. fuel inventories have failed to rebuild after supply disruptions from a strike in Venezuela and ethnic strife in Nigeria drew down stocks. U.S. crude stocks are 11 percent below last year, while gasoline stocks are down 5 percent.

Government fuel stock figures on Wednesday are expected to show a small crude inventory increase in the week ended last Friday, a Reuters poll of oil market analysts showed.

By Thom Calandra, <a href=cbs.marketwatch.com>CBS.MarketWatch.com Last Update: 2:15 PM ET June 10, 2003

SAN FRANCISCO (CBS.MW) - The chief executive of Crystallex International Corp. on Tuesday called the gold miner's shares "severely undervalued" and said he is confident the company will develop its vast gold deposits in Venezuela.

"We are not going to speculate on M&A at this time," Chief Executive Marc Oppenheimer said in an interview at the San Francisco Gold Forum.

Crystallex (KRY: news, chart, profile) shares rose more than 20 percent earlier in the week after The Calandra Report, a subscription service owned by CBS MarketWatch, quoted a mining analyst as saying he expects a bid for the entire company before its June 26 annual shareholder meeting.

Crystallex shares have been under a cloud for years as it struggled to win government approvals to develop the vast Las Cristinas deposit amid the political turmoil of Venezuela. Those approvals came in September 2002, but investors are skeptical the tiny Toronto company can raise the several hundred million dollars necessary to turn the holding into a full-fledged gold mine.

The first phase of the project would cost $250 million, Oppenheimer estimated on Tuesday.

Robert Bishop of Gold Mining Stock Report told The Calandra Report that shares of Crystallex would double or triple after an offer from a mid-sized or large bullion miner. The size of Crystallex's Las Cristinas proven and probable gold reserves is almost 10 million ounces.

"I think the company is building itself to be taken out," Bishop, a longtime mining analyst and financial writer, said. More later this week in The Calandra Report.

Crystallex's Oppenheimer said his company fully intends to pursue financing of the Venezuela deposit. "Our objective is to build the project. We've built the management team."

A former Barrick Gold Corp. (ABX: news, chart, profile) officer, Ken Thomas, is now Crystallex chief operating officer, Oppenheimer noted.

Crystallex had $34 million Canadian of debt as of March 31. Oppenheimer estimated that each $1 worth of Crystallex's Amex-traded shares is backed by $45 an ounce of gold as measured by the company's reserve assets - proven and provable gold ounces in the ground. That's at a $350-an-ounce gold price. Crystallex shares Tuesday midday were selling for $1.20 on the American Stock Exchange. They also trade in Toronto (CA:KRY: news, chart, profile).

"Our ability to produce gold will not be limited by our reserves," he said at the gold forum, sponsored by Denver Gold Group, a trade organization. The CEO said he expects a feasibility study on the development of Las Cristinas into a 20,000-tonne-per-day open-pit mine to be published by SNC-Lavalin by September of this year.

The company has hired Deutsche Bank to help arrange project financing. "Deutsche Bank has met with the Venezuela government, and I think that speaks for itself," he said. "I would make the argument that Crystallex's shares are severely undervalued."

Oppenheimer and his fellow executives now must hope the investing public begins to feel the same way. Thom Calandra's StockWatch is CBS MarketWatch's flagship column. The regular report is in its eighth year at CBS.MarketWatch.com. Thom Calandra is also author of subscription service The Calandra Report.