Maules Creek coal project

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The Maules Creek coal project is an undeveloped open cut coal deposit of approximately of 398 million tonnes. The deposit is located in the Gunnedah Basin in New South Wales.

In November 2009 Coal & Allied entered into an agreement to sell the project to Aston Resources for A$480 million cash. In a media release Coal & Allied Managing Director Bill Champion stated that "the Maules Creek Coal Project did not form part of Coal & Allied's short term or medium term development plans."

On its website, Aston Resources states that the project has a total resource of 610 million tonnes of which 356 million tonnes is classed as reserves of 356 million tonnes. Aston Resources states that the resource is enough to "sustain a potential project life in excess of 30 years. Aston expects the mine will have average saleable coal production of 10.8Mtpa."

The company states that "the majority of Maules Creek production is expected to be higher margin metallurgical coal. The Project will produce semi-soft coking coal (47%) and high volatile PCI coal (10%). The export thermal coal produced at Maules Creek is expected to receive a premium because of its high energy, low ash and low sulphur characteristics.'

Economic Assessment

An economic assessment of the project was undertaken by Gillespie Economics in 2011 as part of the Environmental Impact Statement. The assessment claimed that the project represented a net benefit of $8.7 billion to the community of NSW. The planning department accepted this assessment and the calculation without any revision; however, in September 2011 the economic assessment was reviewed by Economists at Large on behalf of the Maules Creek Community Council. Economists at Large were critical of many aspects of the assessment, particularly as the degree of foreign ownership of the project was overlooked by Gillespie Economics. This error resulted in profits to overseas interests being included as benefits to the NSW community.

As a result of this debate, ANU’s Professor Jeff Bennett was commissioned by the mine proponents to conduct another review of the assessment. Professor Bennett agreed with Economists at Large and came to the conclusion that the net present value of the large open-cut coal project was overstated (by least $3 billion). Prof Bennett also considered the inclusion of “social value of employment” (over $200 million) to be “contentious”.

Externalities such as coal dust which can affect human health were not considered in the economic assessment, although medical groups and NSW Health expressed concern about these issues across coal mining areas in NSW. The impact of greenhouse gas emissions were mentioned but only marginally taken into account. The potential impacts on the nearby state forest were not estimated and the impact on the groundwater level was described as “negligible”. All of these aspects of the assessment were criticized by Economists at Large.

2013 Developments

Hoax

In early January 2013 coal activist Jonathan Moylan, from the group Frontline Action on Coal, issued a press release claiming ANZ had withdrawn a $1.2 billion loan to fund Whitehaven’s Maules Creek project. The loan for Whitehaven was arranged by ANZ in December 2012 in order to help the company build a new coal mine. The press release was reported by various media outlets and induced a temporary 8.8 per cent drop in Whitehaven’s share price. Moylan stated that the hoax release was the statement ANZ “should” have made. Federal opposition environment spokesman Greg Hunt said “that people have the right to oppose and protest, but they must respect the law”. The Australian Securities and Investment Commission (ASIC) is investigating the case and confirmed in July 2013 that Moylan was charged with making or false or misleading statements. Moylan faces up to 10 years in jail and a maximum fine of $495,000. Drew Hutton, president of “The Lock The Gate Alliance” describes the penalty as disproportionate and emphasized that Jonathan Moylan “had felt the full force of law, which multi-national giants rarely feel in this country”. Moylan made his first appearance in court on the 23rd of July. Moylan was not required to enter a plea and was granted unconditional bail.

Tony Burke’s approval and delay

The mining at Maules Creek has been planned since the 1970s and an open-cut mine was approved in June 1990. New mining plans were approved by the NSW Planning and Assessment Commission (PAC) in October 2012. The project was awaiting approval from the NSW Federal Department of Sustainability and Environment.

On the 8th of February 2013 Federal Environment Minister Tony Burke announced that the decision to give Whitehaven approval to develop the coal mine will be postponed until the end of April 2013. Burke said that a “key condition of consent could not be enforced under NSW law”. Burke didn’t clarify which condition was problematic.

Three days later on the 11th of February Burke surprisingly gave conditional approval for the coal mine. Burke said that he was forced to bring forward his decision because the NSW government was leaking commercially sensitive documents. Furthermore, Burke emphasized that further conditions of the mining project will carried out without the NSW government.

The sensitive documents consisted of a confidential letter, obtained by Fairfax, which indicated that Burke wanted to approve the mine before Christmas 2012. In this letter, addressed to NSW Planning Minister, Brad Hazzard, Burke stated he wanted to approve the mine. Chris Hatcher, NSW Resources Minister, said that the delay of the decision “was driven by the time of election”.

Final federal approval

On the 4th of July 2013 Whitehaven received final federal state approval to commence construction. Whitehaven described “the regional support for this project as immense and very gratifying and that the company can go on with the job of delivering to the community the benefits of this much anticipated investment.”

But Gomeroi traditional owners criticized that more than 4000 acres of “culturally significant forest, artifacts and cultural values will be destroyed” and that they neither have been treated with proper respect nor were their concerns regarding the destruction of cultural heritage taken into account. Workers walked off the job on Monday the 8th of July 2013 morning while 50 protesters demonstrated in front of Whitehaven’s office at Boggabri.

Legal challenge

Carmel Flint, a spokesperson for “Lock the Gate Alliance”, said that Federal Minister Burke didn’t take enough time to look over the evidence supplied to him and that the nature of the mine’s application could result in an investigation of the Department of the Environment. Ecologists who were instructed by community members found out that the offset package in the Leard State Forest could have breached the law. The ecologists published a report in January 2013 which disclosed that Whitehaven mapped land as specific endangered White Box Gum woodland when it was in fact a different type of vegetation type.

Community members have established a legal fighting fund. Pepe Clark from the Nature Conservation Council of NSW said that the approval for the Maules Creek Mine has been granted without detailed offset requirements.

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