Rio Tinto Clears Hurdle on Controversial Australia Mine Expansion

   By Rhiannon Hoyle 
 

SYDNEY--Rio Tinto PLC (RIO) cleared a hurdle toward its hoped-for expansion of one of Australia's largest coal pits Thursday, with state planning officials in New South Wales recommending that a controversial extension of the mine be approved.

Rio Tinto has spent more than five years chasing government approvals for a 600 million Australian dollar (US$468 million) expansion of the Warkworth open-cut mine, but has faced repeated legal challenges that said the development would threaten endangered ecological areas and adversely affect residents of the nearby town of Bulga.

In April 2013, the New South Wales Land and Environment Court overturned earlier state-government approval for the expansion, given early in 2012, because the court wasn't convinced the economic benefits outweighed the environmental and social costs. Last year, that decision was upheld by the New South Wales Court of Appeal.

However, after lobbying from industry, the state government overhauled legislation to enable significant mining projects to advance.

Rio Tinto lodged a new development proposal for the mine under the new laws. That proposal also includes an offer to make more than 1,800 hectares of land available to create a new national park.

In recommending the project proceed, the New South Wales Planning Assessment Commission cautioned it "will undoubtedly have a range of adverse impacts on Bulga village and its community" but said it would also provide economic benefits to the region and state.

Rio Tinto said the planning commission's report would now be considered by the state government, before consent for the project is given.

The mine is part of the Mount Thorley Warkworth complex that consists of two adjacent open-cut pits. Rio Tinto says the expansion is needed to keep the mine, which has been running for three decades, in operation.

"While the recommendation is a positive step for Mount Thorley Warkworth, it is absolutely critical that a final decision is now made as quickly as possible," said Mount Thorley Warkworth general manager Mark Rodgers. "We are reaching the point where the shape of our existing development consent footprint means the area we can mine in will narrow over coming months, making it increasingly difficult to maintain existing production and employment levels."

Rio Tinto's plan to expand Warkworth, which supplies power plants and steel mills in Japan, could keep it running for another two decades and feed as much as 230 million metric tons of thermal and semi-soft coking coal on to the global market.

Write to Rhiannon Hoyle at [e-mail]

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