More jobs to go as coal expansion decision creates devastating uncertainty: Rio Tinto

Rio Tinto’s energy chief has written a scathing editorial piece on the decision to overturn the Mt Thorley mine expansion, claiming the move sets up a dangerous precedent which could affect other multi-million dollar projects.

Last month, the NSW Land and Environment Court overturned permission for the company to expand the mine after residents from the town of Bulga succeeded in a campaign against the project.

The company have lodged a Supreme Court appeal against the decision to halt the mine expansion.

In an editorial piece featuring in The Australian today, Rio Tinto’s energy chief executive Harry Kenyon- Slaney said the decision to overturn the mine’s expansion has ‘unleashed a whirlwind of uncertainty not just for every major new investment project planned in NSW, but also for existing mines requiring approvals to continue operating.’

“The Warkworth Extension Project judgment was the first time a NSW court has overturned a major project approval for the ongoing operation of an existing open-cut coalmine. This will encourage more merit-based appeals,” he said.

Kenyon-Slaney said the decision could set a dangerous precedent.

“This precedent could threaten the broader economic development of NSW well beyond mining sector investment,” he wrote.

“On the register there are more than 150 projects worth tens of billions of dollars in a wide range of sectors such as hospitals, road upgrades, drought relief infrastructure, wind farms and also mining that could be subject to merit appeal.”

“I ask: are the proponents of these projects prepared to play Russian roulette with massive capital investments through the NSW planning system?

“This case demonstrates at a local level the increasing uncertainty facing major investors in Australia, and not just in the mining industry.

Kenyon-Slaney said the decision would make NSW an unattractive place to invest at a time when business sentiment was already low.

“Capital is particularly difficult to obtain for Australian coal projects in the current climate of high costs, reduced productivity, continued rent seeking by third party infrastructure providers, a high dollar and lower commodity prices.

“Recently announced mine closures and deferrals of further investment in Australian coal export infrastructure, including at the T4 development at Port Waratah Coal Services in Newcastle, and at Xstrata's Balaclava Island port project in Queensland, are evidence of reduced producer confidence.”

Kenyon-Slaney said added uncertainty around the planning and approvals process could be ‘devastating’ to the industry.

At Mt Thorley he said the decision would affect the mine’s ability to maintain the existing workforce of more than 1300 people. Rio has already cut 40 jobs at the mine.

He said the decision will also affect contractors, suppliers and local businesses in the area.

“This is a mine that has been operating for 30 years and contributes much to the Upper Hunter Valley, NSW and Australia. Most of the workers live in surrounding communities.

“Just last year alone this mining operation spent more than $600 million with more than 1000 Australian businesses, in turn helping those businesses employ their own staff.”

Rio Tinto has been granted an expedited appeal in the NSW Supreme Court, wich has been backed by the Department of Planning and Infrastructure.

However, Kenyon-Slaney is doubtful a decision will come quickly enough to save more jobs.

“Regrettably, we expect that the legal process is unlikely to achieve an outcome in time for us to avoid significant job losses,” he said.

“In the meantime, we are continuing a review of the mine to look for ways to minimise impacts on our workers and other businesses that rely on us.”

Image: ausencotaggart.com

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