Blakebrook Quarry could be privatised by Lismore City Council

Lismore City Council is negotiating a potential deal to privatise or sell Blakebrook Quarry. A confidential document reveals details of the proposed bid.

A view over Blakebrook Quarry.

Lismore City Council is having confidential negotiations after being approached by KIS Quarries to lease or buy the Blakebrook Quarry, potentially for the rest of its operational life, a leaked council document reveals.

KIS Quarries submitted an unsolicited proposal in June to enter into a lease with Lismore City Council for the operation of the Blakebrook Quarry, located on Nimbin Road, Blakebrook NSW.

KIS already has a lease in effect with the neighbouring Richmond Valley Council for the Peterson Quarry.

KIS has approached Lismore council with a proposal to lease the Blakebrook quarry operation – or buy it – noting its credentials from its lease of the Peterson Quarry.

The potential lease of the Blakebrook Quarry has not gone to competitive tender, nor has there been an expression of interest process.

Council staff said it was “arguably less likely” for a better offer to be received, “from a standard competitive process”, in explanation for the lack of tender.

A briefing was then given to councillors, which was held in a closed meeting in September, where they voted to go to a memorandum of understanding – meaning they would continue with negotiations to consider what a potential deal would look like.

The quarry has been running at an operating loss, with council recording a total cash loss of $4.87 million over the five years to 2020/21 – a major selling point for privatising the quarry.

If the lease goes ahead, Lismore City Council could hand over its fleet of trucks and all equipment associated with the quarry to the private operator, which could also be used for Peterson Quarry operations.

The lease was originally going to be until 2039, but during a confidential meeting council discussed that this might be extended for the lifetime of the quarry.

The unsolicited proposal from KIS included the request that they could use all of the existing Lismore City Council equipment, trucks and everything on site.

Annually, 300,000 tonnes of rock can be pulled from the quarry, and based on this, council would receive $600,000 in revenue, KIS Quarries estimated in its proposal.

The current deal would see KIS pay a $2 royalty per tonne on all quarry product sales, with a council steering committee rating the proposal from KIS as a “2/5 for return on investment”.

The proposal includes supply of quarry materials to Lismore City Council to be discounted by nine per cent of market price, however the leaked document states it was “difficult to ascertain industry standards without independent review or benchmarking”.

KIS Quarries would not be responsible for “rehabilitation and restoration” of the site, with a levy to cover that cost not included in the proposal.

“There are questions that need answering … can the proponent contribute towards rehabilitation costs, before the proposed rate of return to the proponent can be determined as being proportionate to the proponents risks,” the leaked document states.

Councillors Andrew Bing, Peter Colby, Darlene Cook, Andrew Gordon, Electra Jensen, Steve Krieg and Big Rob voted to go to a memorandum of understanding.

Councillors Elly Bird and Adam Guise voted against, while Vanessa Ekins was absent.