Mining truck working in iron ore mines

Environment group wants mine reopening blocked

Environmental groups have called for the Queensland Government to block the sale of the Rio Tinto’s Blair Athol mine in Central Queensland.

The Lock the Gate Alliance are concerned taxpayers will be left to pay for the rehabilitation of the Rio Tinto mine.

Last week, TerraCom announced plans to acquire the mine for $1, but the sale does not yet have State Government approval.

The deal includes the mining lease, licences, land, contracts and equipment, as well as $80m from the previous owner to rehabilitate the mine when it closes, which will be held by the Department of Natural Resources and Mines.

The mine was closed by Rio Tinto in 2012 after three decades of operation due to low coal prices.

Lock the Gate has written to three state ministers calling on them to block the sale.

“Rio operated Blair Athol for 30 years and made huge profit from the operation. When it shut the mine in 2012, Rio gave a public undertaking that it would fulfill its legal obligations and fully rehabilitate the site. This sale shows Rio wants to renege on this commitment and is now trying to sell the site to a junior mining company and avoid the full cost of rehabilitating the mine,” Lock the Gate’s mine rehabilitation reform campaign coordinator Rick Humphries said.

In letters to the State Treasurer Curtis Pitt, Minister for Natural Resources Anthony Lynham and Minister for The Environment Stephen Miles, Lock the Gate cited TerraCom’s level of debt, fragile cash flow and total inexperience as grounds to block the sale.

The letters also congratulated the Government for blocking the Linc Energy transaction on similar grounds.

“TerraCom is in a distressed state financially due to its huge debt and is in a worse financial state than Linc was when the Government blocked that sale. In addition Terracom has no demonstrated experience or capacity to rehabilitate large scale open cut coal mines such as Blair Athol which is a complex, very high risk site,” Mr Humphries said.

“On these grounds the Government should block this sale as they did with Linc given the huge financial risk to the taxpayer.

“Rio has said it will pay TerraCom $80 million – an amount equivalent to the rehabilitation financial assurance – to get this liability off its books. We know that $80m is not enough and Rio is prepared to stump up this amount because it knows it will cost a lot more, probably twice this amount, to actually properly rehabilitate the site.”

If you enjoyed this post, please consider leaving a comment or subscribing to our FREE eNewsletter to have future articles delivered directly to your inbox.

Related Products:




There are no comments

Add yours