Doubts have been raised over the future development of a coal mine near Wandoan on Queensland’s Western Down’s region.
Xstrata is proposing to develop the largest open-cut coal mine in the Southern Hemisphere, but is yet to make a final investment decision, the ABC reported.
The $7 billion project north-west of Toowoomba would mine 30 million tonnes of coal per year over three decades.
However doubts have been cast over whether the project will go head, with Glencore chief Ivan Glasenberg telling investors yesterday he was in favour of less risky investment decisions.
Glencore is set to merge with Xstrata in April in a $US34 billion all-share acquisition deal.
"We prefer to distance ourselves from greenfield projects which create more risks," Glasenberg said.
Last week Glasenberg schooled miners on the theory of supply and demand, saying the industry had been saturated with new mines that lead to a surplus in metals and shrinking profits.
“We've always been wanting to keep building and keep putting the cash which we generate into new assets. That's what we've got to stop doing as a mining industry. We've got to learn about demand and supply,” he said.
Glasenberg argued that stalling the development of new mines will help prolong higher commodity prices.
“Now we have a new generation of CEOs. I hope CEOs have learnt their lesson. They built, they didn't get the returns for their shareholders. It's time to stop building.”
The controversial Wandoan mine has seen Xstrata face court battles from five local farming families and a judicial review of the Minister for Environment Andrew Powell’s decision to grant an environmental authority will take place.
The families have resisted selling their properties which lie either inside or on the outskirts of the project’s boundaries.
John Erbacher has been fighting the mine for five years and says the proceedings are about more than staying on the family farm, the ABC reported.
They are concerned about the security of groundwater on their properties, the Chronicle reported.
"I've got to be able to look my grand kids in the eye and say I tried to protect the underground water," he said.
Last year the farmers were unsuccessful when they challenged the project in the Land Court.
A date for the Supreme Court hearing is yet to be set.
Image: www.envlaw.com