WA offers to pay Yancoal more for coal

The West Australian premier, Colin Barnett, has said the state government’s move to buy into the Premier coal mine was unusual but necessary.

Energy minister Dr Mike Nahan indicated on Tuesday that
state-owned electricity distributor Synergy will pay $15 million per year to keep the Chinese-owned coal mine operational.

Barnett said the move was needed to protect the energy needs
of taxpayers, and the government’s position.

“We accept that it is time for an increase in the price paid
for (coal) – it’s a fairly modest increase – and to protect the State’s
position of that we do have the option of taking equity in the project,” he
said.

The foundations have been laid for Synergy to have power of
veto over expenditure at the Premier mine, in order to prevent unjustified
investments that would ultimately cost electricity consumers.

However, Nahan has pointed out the terms of the agreement between Synergy and mine owner Yancoal Australia Group would remain confidential.

“Electricity prices will not increase as a result of this
decision,” Nahan said.

“The state government through Synergy has worked hard with
the owners of Premier Coal to finalise an amended supply agreement that is
critical to the future of the state’s economic development and the security of
electricity generation.”

Shadow energy minister Bill Johnston criticised the Government
for risking taxpayers’ money to bail out a Chinese-owned mining company.

Johnston claimed it made no sense for the Government to put
money into the Premier mine, when it already had the right to step in and run
it if the mine went broke.

The Premier mine employs 350 workers, and supplies more than
a third of the power to Perth and the state’s south-west region.

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