Blair Athol mine

From Global Energy Monitor

The Blair Athol mine is an open cut coal mine located 24 kilometres north west of Clermont in the Bowen Basin in central Queensland. Blair Athol Mine closed from 2012 to 2017, when Rio Tinto sold it to TerraCom Ltd. Coal from the mine is transported by train over 240km to the Dalrymple Bay Coal Terminal for shipping overseas.[1]

The nearby Clermont mine uses Blair Athol's stockpile and train facilities.[1]

Location

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Background

Coal mining began around the Blair Athol mine in the 19th century, when it was mined to fuel smelters at nearby copper mines. Coal mining really took off when a railway in Clermont was established in 1910, which allowed for increased demand.[2] When open-cut mining began in 1924, it kicked off the start of nearly 50 years of on-again, off-again minimal mining.[3]

In 1968, the Blair Athol field was bought by a consortium of multinational corporations, including Conzinc, Rio Tinto, and Clutha Development. Together, they were known as Conzinc Rio Tinto of Australia Limited (CRA) and operated as the Pacific Coal Pty Ltd.[4] But large-scale development did not begin until 1984, after a Japanese electricity company signed a contract for Blair Athol’s coal. This contract officially brought an end to the town that had existed in Blair Athol, with the town’s removal announced in 1972. By 1984, the modern open-cut operation was up and running.[3]

In 1997, CRA Limited became Rio Tinto Limited. By 2007, Rio Tinto Limited owned 71 percent of the Blair Athol mine.[5] Blair Athol’s production peaked at 11.3 million tonnes in 2009.[3]

In August 2012 Rio Tinto announced that it planned to close the mine by the end of the year. The company stated that the "coal seams are largely mined out" and attributed the decision to close to the "recent significant drop in thermal coal prices, and other factors such as rising costs and the foreign exchange rate.[6]

As of August 2012, the company's website stated that the mine was due to close in 2016. However, when announcing the closure, the company claimed that[6] "since 2005, Rio Tinto had planned to close the mine at the end of this year" [2012] but had decided to extend the mine when prices rose substantially.[6]

In October 2013, Rio Tinto attempted to sell the mine to Linc Energy for $1. The new company was supposed to revive the mine and begin mining again. This sale also transferred site rehabilitation obligations from Rio Tinto to Linc Energy.[7]

However, it appears the sale did not go through. Linc Energy went bankrupt in June 2016[8], and Rio Tinto once again made headlines in July 2016 by selling Blair Athol to TerraCom Ltd for $1.[9] Along with the sale, Terracom Ltd was slated to receive A$80 million from Rio Tinto to meet rehabilitation costs at the site. By August 2017, Terracom had begun producing coal from the mine once again.[10]

Project Details

  • Sponsor: Orion Mining[11]
  • Parent Company: TerraCom Ltd[11]
  • Location: Located 340 km north-west of Rockhampton and 24 km north-west of Clermont.[2]
  • GPS Coordinates: -22.703221, 147.543530
  • Status: Operating[10]
  • Production Capacity: 3 Mtpa[12]
  • Total Resource: 45 million tonnes[12] [13]
  • Mineable Reserves:
  • Coal type: high quality thermal coal[12]
  • Mine Size:
  • Mine Type: open cut[10]
  • Start Year: open cut mining began in 1924[2]
  • Source of Financing:

Community concern around sale to Terracom

When TerraCom bought Blair Athol from Rio Tinto, it was believed that about 500 hectares of land at the mine had already been rehabilitated. At the time of the sale, TerraCom planned to rehabilitate 50 hectares of previously mined area while also trying to bring the mine back into operation.[14]

Anti-coal mining group Lock the Gate attempted to stop the sale to TerraCom because they believed it was a way for Rio Tinto to avoid paying the full price of rehabilitation.

“When it shut the mine in 2012, Rio gave a public undertaking that it would fulfill its legal obligations and fully rehabilitate the site,” said Lock the Gate’s mine rehabilitation reform campaign coordinator Rick Humphries in a 2016 Mining Monthly article.[15] “This sale shows Rio wants to renege on this commitment and is now trying to sell the site to a junior mining company and avoid the full cost of rehabilitating the mine.”

Activists didn’t believe the $80 million Rio Tinto planned to give to Terracom would be sufficient for rehabilitation.

“Rio is prepared to stump up this amount because it knows it will cost a lot more, probably twice this amount, to actually properly rehabilitate the site,” Humphries added in the same article.[15]

Additionally, activists were concerned that the sale would mean that costs of rehabilitation would ultimately fall on state taxpayers as opposed to coal companies. TerraCom was a significantly smaller company than Rio Tinto, and in 2015 and 2016, TerraCom was struggling financially and had to restructure their debt.[15] TerraCom's website currently states that the company rehabilitated 50 hectares in the first six months of operation and established an additional 10 hectares of treatment trials in 2017.[12] Additionally, "the 2018-2019 rehabilitation commitment of 40 hectares was not met due to a focus directed towards the capping of the decommissioned tailings storage facility (TSF)." The company now has a 2019-2020 goal of 100 hectares.[12]

In April 2020, a journalist at ABC News uncovered documents that show TerraCom has gained access to over half of the $80 million rehabilitation bond meant to be kept by the government in case a mining company goes bankrupt. While only about $45 million of the original bond is left with the government, both the Department of Environment and Science and the Queensland Treasury maintained that the estimated cost of rehabilitation would be about $72 million.[16]

Articles and Resources

References

  1. 1.0 1.1 Rio Tinto, "Blair Athol Mine: mining and production", Rio Tinto website, accessed July 2010.
  2. 2.0 2.1 2.2 "Blair Athol", Centre for the Government of Queensland, accessed May 2020.
  3. 3.0 3.1 3.2 Luke Keogh,"“Masterpiece of Thought”: Stories of the Blair Athol Coal Seam and Australia Open Cut", 2016 Mining History Journal, 2016.
  4. Diane Menghetti, "‘Sleeping giant’: selling Blair Athol coal", Australian Economic History Review, 1 January 1995.
  5. "FORM 20-F: Rio Tinto Limited", Securities and Exchange Commission, 31 December 2007.
  6. 6.0 6.1 6.2 Rio Tinto coal Australia, "Blair Athol Mine to finish production", Media Release, August 8, 2012.
  7. Cole Latimer, "Linc Energy acquires Blair Athol coal mine, 100 mining jobs created", Australian Mining, 3 October 2013.
  8. JESSICA LYONS HARDCASTLE,"Linc Energy Files for Bankruptcy", Energy + Environment Leader, 1 June 2016.
  9. Harry Pearl, "Rio Tinto sells Australian coal mine for a dollar", Reuters, 4 July 2016.
  10. 10.0 10.1 10.2 Lou Caruana,"Coal production starts at Blair Athol", Australia's Mining Monthly, 16 August 2017.
  11. 11.0 11.1 Ewen Hosie, "TerraCom breathes life into Blair Athol coal mine", Australian Mining, 20 March 2019.
  12. 12.0 12.1 12.2 12.3 12.4 "Australian Operations", TerraCom website, accessed May 2020.
  13. "TERRACOM LTD.", RSC Mining & Mineral Exploration, accessed May 2020.
  14. Peter Ker, "Former Rio Tinto executive buys Blair Athol coal mine for $1", Financial Review, 4 July 2016.
  15. 15.0 15.1 15.2 "Blair Athol sale must not go ahead: Lock the Gate", Australia's Mining Monthly, 14 July 2016.
  16. Josh Robertson, "Queensland Government released almost half of $80 million bond to company that purchased Blair Athol mine", ABC News, 30 April 2020.

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