Illawarra jobs on the line after $1bn South32 mine proposal rebuffed by NSW Premier Gladys Berejiklian
Thousands of NSW jobs in mining and steel could be axed after talks for a $1bn proposal were rebuffed by Premier Gladys Berejiklian.
Thousands of jobs could be axed after a bid by mining giant South32 to discuss reworking a rejected extension of its Illawarra metallurgical coal mine was rebuffed by NSW Premier Gladys Berejiklian.
The company’s Dendrobium mine is due to run out in 2024 and a plan to extend its life by several decades was rejected by the Independent Planning Commissionlast month over risks to Sydney’s water catchment.
Coal from the mine covers about two-thirds of supplies for BlueScope’s Port Kembla steel mill, meaning its closure could threaten the viability of the steel facility by forcing a move to imports of the fuel.
South32 has been urgently requesting meetings with Ms Berejiklian and Planning Minister Rob Stokes to discuss an alternate $1bn mine plan, but said the high-profile politicians had declined talks.
“The feedback is there’s a lot on their plate — and they get a lot of requests,” South32 chief executive Graham Kerr told The Australian. “But we need to understand from the government how they see the options. From our perspective, this regulatory uncertainty with $1bn on the table is frustrating.”
Some 2100 workers at South32’s Illawarra mines could lose their jobs from 2024 if a solution or new plan cannot be reached. An extra 3000 manufacturing-related jobs in the region, including at BlueScope operations, are also at risk.
“If we don’t find a way forward on Dendrobium, in my mind you’re looking at potentially 2100 direct jobs that we employ today just won’t exist,” Mr Kerr said.
“We’re not sitting there asking the government to overturn the IPC decision because from a company perspective that’s problematic. We want to discuss an alternative mine plan and take it through a process that will not take five years like the previous expansion did.”
The extension project would have taken the mine further beneath Sydney’s water catchment zone and was opposed by environment groups and by WaterNSW, which submitted a stinging criticism of South32’s proposal in mid-December.
Mr Stokes said he was aware of issues raised by the mining giant.
“The minister has previously met with South32 in relation to Dendrobium and is well aware of their concerns,” a spokesman said.
Ms Berejiklian declined to comment, as did Deputy Premier John Barilaro, who had led a roundtable at BlueScope following the IPC ruling at which he vowed to fight the decision.
Mark Latham, a One Nation MP and former federal Labor leader, has taken up the cause after introducing a bill in the NSW parliament on Wednesday for the Dendrobium extension to be approved.
“The two commissioners rejected the clear compelling evidence of BlueScope Steel that the company needs Dendrobium coking coal to secure its long-term future in the Illawarra,” Mr Latham said.
The planning tsar has courted controversy from some quarters over accusations it risks being dominated by special interest groups, potentially damaging the plight of major gas and coal projects in the state.
Korean power giant Kepco saw its Bylong coal mine in NSW rejected while the Rocky Hill coking coal mine planned for NSW’s Hunter Valley was binned when the state’s Land and Environment Court cited the “dire consequences” of the coal project on global pollution levels.
“There’s been a number of cases on the east coast in NSW that have made approval of coal projects challenging. But this is an extension, not a new build, and an area where we’ve been mining for a long time,” Mr Kerr said.
South32 said it was caught out by the IPC decision.
“The refusal by the IPC took us by surprise,” Mr Kerr said. “That came despite a strong recommendation from the NSW government to the IPC that the benefits significantly outweighed the impacts and therefore was in the public interest.
“We were also disappointed we weren’t given the opportunity to respond to some of the findings of the IPC because we think they are wrong. We would have welcomed the opportunity to constructively engage in this process. Even though we don’t agree with some of the concerns, we could have done some things to address the concerns. Our fear is this is the end of a long process.”
South32 had offered to fund more than $100m in water catchment offsets, such as conservation measures and capital works, to improve Sydney’s overall water supply, but the IPC said this did not address concerns raised by WaterNSW.
South32 will consider a judicial review of the project, but says a reworked mine plan appears its best opportunity to ensure the mines and jobs remain operating past 2024. It wants NSW ministers to engage on alternatives, but says it cannot take the risk of engaging in another long-winded planning process.
“We’re also prepared to look at alternate mine plans but these take time to study and we need to know from the government what is feasible,” Mr Kerr said. “We are looking at spending $1bn in this process, which is a lot of money when you have this regulatory uncertainty over what the final decision looks like, but more importantly the time frame.”
The NSW Minerals Council said the IPC rejection had increased investment uncertainty for miners.
“This outcome has created investment uncertainty for future projects in NSW at a time of economic recovery from COVID-19,” NSW Minerals Council chief executive Stephen Galilee said.
“While the NSW Deputy Premier has recognised the importance of this project and the significant damage caused by this decision, the NSW government has so far failed to take any meaningful action.”
However, the IPC disputed the NSW Minerals Council’s assertion of increased investment uncertainty.
“Since the Commission was established in March 2018, it has approved 20 major state significant development and modification applications for resources projects,” the IPC said in a statement.
“The Commission has only refused two projects that the Department’s whole-of-government assessment concluded were approvable, subject to conditions: Dendrobium and Kepco’s Bylong Coal Project. The latter was the subject of a judicial review in the Land & Environment Court, which upheld the Commission’s determination. That decision is now being appealed in the Court of Appeal,” the IPC added.
“There are two other big resources projects presently before the Commission: Tahmoor South Coal Project and Mangoola Coal Continued Operations Project. These will be determined in the weeks ahead.”
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