Calls to block CQ mine sale
FEARS Rio Tinto's Blair Athol coal mine will never be properly rehabilitated if sold to tiny mining company TerraCom has environmental groups calling on the Queensland Government to block the sale.
TerraCom announced plans to acquire the Clermont mine on July 5 for $1 but the sale does not yet have State Government approval.
The deal would also see current majority stakeholder Rio Tinto transfer $80million in cash to a bank account nominated and controlled by the State Government to cover environmental rehabilitation commitments.
The $80m figure was based on an assessment of the mine's rehabilitation liability carried out in November last year by the Queensland Government.
But, five of the last six times the Queensland Government had to call on funds set aside by companies to cover the cost of a mine's rehabilitation, there was not enough to cover the full cost.
That has the Mackay Conservation Group's Peter McCallum concerned the $80m will prove, once again, insufficient.
If that occurred, he said, he did not believe TerraCom would have the resources to pick up the shortfall, as a mining giant like Rio Tinto would be able to, and taxpayers would be forced to chip in.
Once a mining company goes bankrupt and joins the list of 15,000 abandoned Queensland mines, the burden of rehabilitation falls on taxpayers,
Lock the Gate Alliance's Rick Humphries has claimed the Blair Athol rehabilitation could cost as much as $160m, and pointed to a number of factors to indicate TerraCom's inability to stump up further funding.
Firstly, he said, an Institute of Energy Economics and Financial Analysis report claimed the company was in serious financial distress with net debts of more than US$130m. The institute described the transaction as a "one-sided bet" that could result in large profits for its stakeholders or a large loss for taxpayers.
The Daily Mercury also reported the company's "lean corporate structure" last week: their headquarters appear to be a small fibro cottage in rural New South Wales.
However, the concerned groups may draw some optimism from the mine's track record given a similar sale - to Linc Energy - was blocked by the State Government in 2013.
The Department of Natural Resources and Mines did not respond before deadline.
The mine was once the largest export thermal coal producer in the country.
It operated for 30 years but closed in 2012.
During that time 250million tonnes of coal was extracted.