21 July, 2015
New report raises concerns Wollongong Coal cannot be trusted to mine in Sydney’s water catchment
Protect Sydney’s Water (PSWA) is calling on the government to withdraw Wollongong Coal’s mining licence because the company has demonstrated it lacks the technical competence and financial stability required to be considered a “fit and proper person” under the Mining Act 1992.
The alliance of community and environment groups has released a report today that shows the company fails to pass five of the tests required to be judged a “fit and proper person” under Section 380A (2) of the Act.
The report, titled Risky Business: The shocking truth about the company undermining Sydney’s drinking water, shows how the financial instability, technical incapacity, and breaches of approval conditions give the Department of Industry cause to withhold Wollongong Coal’s right to mine.
Financial instability: J.P. Morgan in 2014 reported the company had $493 million in liabilities and market capitalisation of $48 million, and concluded “there is significant uncertainty whether the company will continue as a going concern 12 months from the date of this report.”
Technical incapacity: In March 2014, due to a technical error, the roof of the mine collapsed and buried the longwall mining machine (worth tens of millions of dollars). The colliery has since been put into ‘care and maintenance’.
Breaches of conditions: The company has frequently breached conditions of consent, including failure to monitor subsidence (a major threat to swamp ecosystems), and air and noise pollution.
“Taken together, these failings demonstrate Wollongong coal is unfit to hold a mining licence,” said Isabel McIntosh, spokesperson for the Protect Sydney’s Water Alliance.
“Mining underneath Sydney’s drinking water catchment should never be allowed to occur, particularly by a company with such a bad record of technical and financial failures.
“You don’t have to dig far into Wollongong Coal’s track record to see it is in a dire financial situation and lacks the technical capacity to experiment with an entirely new type of mining in the water catchment of 4.5 million people.
NSW Nature Conservation Council Campaigns Director Daisy Barham said: “Last year Ernst and Young expressed doubt the company would last another year, then in June 2015 it was suspended from trading on the ASX, yet the NSW Government is continuing to consider its two applications to mine in our catchment.
"How can we trust that this company has the expertise and resources to repair any damage it causes? Its shares are worth two cents apiece, and yet the water users of Sydney and the Illawarra are being asked to trust them with our water catchment.”
BACKGROUND
About Protect Sydney’s Water Alliance
PSWA is a network of 50 community organisations dedicated to protecting Sydney’s drinking water catchment from irresponsible and destructive mining practices. PSWA is calling on the Deputy Secretary of the Resources and Energy Division of the Department of Industry to suspend Wollongong Coal’s activities and for the catchment to be protected from any further underground coal mining.
Wollongong Coal
The company operates owns and operates two coalmines - Russell Vale and Wongawilli – near Wollongong in Sydney’s drinking water catchment. A major expansion of the Russell Vale mining and an extension of the life of Wongawilli are being assessed by the NSW Government. The proposed works includes use of triple seam mining, technically a very risky form of longwall mining.
Fit and proper person
Under Section 380A (2) of the Mining Act 1992, there are several matters the issuing authority may consider when determining whether a company is a “fit and proper person” to hold a mining right. Matters most relevant to Wollongong Coal that the department may consider include:
- the record of compliance with relevant legislation [Section 380A (2) (d)];
- whether the mine will be managed by a technically competent person [Section 380A (2) (e)];
- whether a director is not of good repute, [Section 380A (2) (g)];
- whether a director is not of good character, with particular regard to honesty and integrity, [Section 380A (2) (i)]; and
- whether the person has the financial capacity to comply with the obligations under the mining right, [Section 380A (2) (m)].
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Coal and gas
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