Coal news and updates

Coal giants abandon unprofitable mines, leaving rehabilitation under threat

A Brisbane mining minnow that raised less than $750,000 from investors before inking a deal to buy a coalmine must now guarantee it can pay more than $120m to clean up the site upon closure.

Batchfire Resources’ agreement to buy a central Queensland mine from Anglo American highlights a growing shift by global coal giants away from less-profitable mines, leaving the fate of expensive environmental rehabilitation in the hands of companies with far fewer resources.

One analyst said this in turn raised the risks that taxpayers would ultimately be forced to bail out miners if they failed or “financial assurance” regimes run by state governments proved inadequate – as was found in a Queensland government report less than two years ago.

Batchfire, revealed last week as the little-known buyer of the open cut Callide mine, has 24 shareholders – 10 of them registered to the same suburban Brisbane house – who have pooled about $748,000 in funds.

Anglo American said the sale price was confidential, but RBC Capital Markets estimated the mine would cost less than $US100m.

However, Batchfire must now produce a site rehabilitation bond of more than $121m, either in cash or a bank guarantee, to be held by the Queensland government

A spokeswoman for the Queensland Department of Environment and Heritage Protection (DEHP) said the government held $121,069,956 in financial assurance in the form of a bank guarantee from Anglo American.

Source: theguardian.com