Debt-ridden firm secures expansion
Wollongong Coal has secured approval for a mine extension despite its $1 billion debt.
Federal Environment Minister, Sussan Ley, has approved Wollongong Coal’s Russell Vale Colliery extension.
The colliery has been in care and maintenance mode for the last five years, while the company’s total debt has ballooned to $1,089,243,000.
Wollongong Coal Limited (WCL) lodged plans to extract an additional 3.7 million tonnes of metallurgical coal from the colliery over the next five years.
It claims the project will create a $200 million boost to the economy.
The New South Wales Independent Planning Commission approved it in December last year with 118 conditions, with Minister Ley now supporting the mine under the Environment Protection and Conservation Act.
“The proposed conditions of approval place restrictions on the extent of impacts the action can have on biodiversity and water resources, and how they are managed in the long term,” Ms Ley found.
“The proposed conditions also require ongoing monitoring of potential impacts and obligations for the person taking the action to implement mitigation and corrective actions, and to offset significant residual impacts.”
The Minister acknowledged widespread community concerns about the company's compliance history, environmental management record and financial situation, but found that it is still “a suitable person to be granted an approval”.
Anti-fossil-fuel community group Lock the Gate has campaigned against the project.
“Wollongong Coal's troubled financial position means if something were to go wrong at the mine, the company may struggle to pay to clean up the site,” Lock the Gate spokesperson Nic Clyde says.
“It has debts exceeding $1 billion, and last year applied to be delisted from the ASX because it couldn't pay the fees.
“Fears are also held over how this coal mine will impact fragile coastal upland swamp ecosystems within the catchment area, several of which have suffered tremendously from underground mining beneath the Illawarra escarpment.”
The Institute for Energy Economics and Financial Analysis has criticised the approval too, given WCL’s dire financial situation.
“They are insolvent, unable to pay any creditors, any debtors, and they are unable to fund their rehabilitation,” the institute’s spokesperson Tim Buckley said.
“The idea that they should be allowed to continue to mine under the Sydney Water Catchment area is beyond ludicrous.”