Queensland mining companies avoid clean-up costs with Government consent, lawyers say

queensland coal mine

Coal mining companies are avoiding clean-up responsibilities, Mr Barnden says. (AAP)

Jess Lodge | ABC News, 15 Apr 2016

Mining companies in Queensland are using legal loopholes to delay or minimise their rehabilitation obligations, environmental lawyers say.

David Barnden from not-for-profit law firm Environmental Justice Australia (EJA) said the costs, sometimes amounting to billions of dollars, must then be covered by governments.

“In Queensland, there are about 15,000 abandoned mines and the extent of the problem is just enormous,” Mr Barnden said.

A new report from EJA’s climate and finance program outlines six ways coal mining companies can avoid or minimise their rehabilitation costs.

Methods used include putting a mine into “care and maintenance”, using up cash reserves, selling mines cheaply to smaller companies, and expanding a mine instead of closing it.

Queensland Resources Council (QRC) acting chief executive Greg Lane said he did not believe there were any loopholes in the system.

“There are very, very few mines that have been abandoned since the regulation of mining was transferred to the Environment Department in 2001,” he said.

“This shows the system is working.”

Mr Barnden said the State Government required mining companies to secure financial assurance to cover rehabilitation costs, but the outcome was often not realistic.

The EJA report found mining companies in Queensland could receive discounts of up to 30 per cent on the amount of financial assurance they were required to secure.

“Many of which seem inappropriate given the state of play of the coal industry,” Mr Barnden said.

‘It’s the Government, not the mining companies’

One recent example was the Queensland operations of Peabody Energy, which filed for bankruptcy protection in the US.

Mr Barnden said some of the financial assurance amounts for Peabody secured by bank guarantees were 20 to 30 per cent less than what was needed to cover environmental costs.

Cockatoo Coal's Baralaba coal mine was placed in care and maintenance this year. (ABC News: Jonathan Hair)

Cockatoo Coal’s Baralaba coal mine was placed in care and maintenance this year. (ABC News: Jonathan Hair)

“Sometimes the reason for that is a discount on the basis of the company’s financial stability, which is clearly inappropriate when you’ve got a parent company facing bankruptcy,” he said.

Earlier this week, Peabody said its Australian mines were not a part of that and would continue to operate as normal.

Mr Lane said it was the Government, not the company, that decided the amounts.

“It’s important to note that financial assurance is used only as a last line of defence,” he said.

Mr Barnden said when the rehabilitation costs could not be covered by the mining company then the Government fulfilled those requirements at the expense of taxpayers or the site was abandoned.

“It’s only going to be exacerbated in the current climate where a lot of companies are either selling their assets or going into administration,” he said.

‘Laws must be properly enforced’

Mr Barnden said EJA was calling for changes to make sure the appropriate amounts were being secured in the bank guarantees required for each project.

“Where there’s inappropriate discounts, they shouldn’t be applied. And where there’s inadequate calculation of the work and the costs of the final rehabilitation, we would like that improved,” he said.

“The laws are quite a general framework, but it’s how those laws are implemented.”

EJA and the QRC agreed it was up to the State Department of Environment and Heritage Protection (EHP) to ensure the laws were properly enforced.

Mr Lane said the QRC would support any improvements that could be made across the mining sector.

The Department of Environment and Heritage Protection has been contacted for comment.

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Filed under Australia, Environmental impact

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