600 jobs on way as major mine reopening approved
What you need to know:
- 150 direct jobs and 450 indirect jobs
- Mine plans to reopen in March
- Mine is expected to generate $210million in state government revenue
- TerraCom paid Rio Tinto $1 for the mine that was mothballed in 2012
THE new owner of the Blair Athol coal mine will soon begin buying up houses in Clermont, after receiving a key approval from the State Government.
The Department of Natural Resources and Mines has given the formal indicative approval for the transfer of the mining lease, for the state's oldest open cut coal mine, from Rio Tinto to Orion Mining Pty Limited, a wholly owned subsidiary of TerraCom.
The company now plans to reopen next month, and is expected to generate 150 direct jobs and a further 450 indirect jobs in the region.
So where is Blair Athol mine?
TerraCom said it was committed to providing employment opportunities for local workers in the region, rather than operating a fly-in, fly-out workforce.
The company will also relocate its head office to Clermont.
When production recommences at the Blair Athol mine it is expected to produce high quality coal over the next seven years, delivering a $210million boost to the State Government from new taxes, royalties and stamp duties.
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TerraCom executive chairman Cameron McRae said it would soon be buying housing stock to support the mine workers and boost the local economy.
Mr McRae said the mine, which was mothballed in 2012, had been maintained to a high standard and all equipment on site was ready to be put into operation immediately.
"On the back of rising coal prices this is great news for TerraCom and its shareholders, the local and regional community and the people of Queensland," Mr McRae said.
"Without this lease transfer the mine may never have reopened and the jobs and economic opportunities could have been lost forever."
TerraCom purchased the Blair Athol mining lease for $1 but the deal also included $79.6million - to be transferred to a government-controlled trust fund - for rehabilitation costs and TerraCom will contribute a further $13.5million.
Mr McRae said the mine's rehabilitation costs were covered and there was no risk to Queensland taxpayers.
"As part of our commitment to the government, TerraCom will immediately start rehabilitating sections of the historic mine immediately utilising the existing workforce and equipment," he said.
TerraCom has built and commissioned a $150million coking coal mine which employs over 350 people in the Gobi desert in Mongolia. It recently signed a five-and-a-half-year deal to sell over $1billion worth of coal from that mine into China.
The company also holds considerable tenements across regional Queensland including large holdings in the Galilee Basin.
Yet the approval concerned the Mackay Conservation Group.
Coordinator Peter McCallum claimed Department of Natural Resources and Mines had removed "significant conditions" from the indicative approval for transfer of the mining leases.
He said the removal of those conditions meant that TerraCom may be able to cut ties with its subsidiary Orion Mining at some time in the future, leaving it with the mine rehabilitation responsibility.
He said the department has also removed a condition that the company must demonstrate that the government would have priority over any other debtors in relation to the cash financial assurance for rehabilitation.
However, it retained the condition that the company must demonstrate access to a wash plant, rail transport and a supply of water.
The company is also required to provide a bank guarantee of $13.5million.
"This $1 deal is becoming shonkier by the day. The people and environment of Queensland will suffer if this company fails," Mr McCallum said.
"In fact, it is likely rehabilitation of Blair Athol will cost more than double the current calculation."
The State Government will be contacted for comment.