New freedom of information documents and corporate statements to the ASX reveal the Queensland Palaszczuk Government has granted $32 million to mining minnow Terracom from an $80 million rehabilitation cash bond despite departmental concerns and rehabilitation failures.
In 2016, Terracom purchased the Blair Athol coal mine from Rio Tinto for $1, and the Queensland Government required Rio Tinto to make an $80M cash bond deposit to the government to cover rehabilitation of the site.
However, since Terracom purchased the mine the government has allowed the company to draw down $32M from this bond account which has dramatically improved Terracom’s financial position, despite Terracom mining through areas that had previously been rehabilitated.
The RTI documents obtained by Lock the Gate Alliance show that:
The Department of Environment and Science had major concerns about proposed rehabilitation, stating in June 2017 that the $80M bond should be retained until topsoil trials were completed - but $5M was released to Terracom four months later.
Queensland Treasury Corporation originally wrote a scathing assessment of plans by Terracom to purchase the mothballed Blair Athol coal mine due to concerns about the company’s financial capacity.
The latest grant to Terracom in January this year of $27M was a further draw down from the cash bond, taking the total grant to $32M.
This was allowed despite Terracom’s 2018/19 Plan of Operations revealing the company planned to mine areas that had been rehabilitated by Rio Tinto, which would decrease the area rehabilitated by 66 hectares in total since Terracom purchased the mine by June 2019.
Lock the Gate rehabilitation spokesperson Rick Humphries said, “This is an extraordinary case of a rehabilitation bond effectively being used as a cash drawdown account for an embattled junior miner.
“There are a lot of questions to be asked here as to why the government has paid out $32M to Terracom from a rehabilitation bond account only for them to mine through areas that had already been rehabilitated by Rio Tinto before the sale of this mine.
“It’s even more disturbing to see that money has been refunded apparently against the advice of the environment department and despite evidence that rehabilitation topsoil trials had failed.
“At this point, it looks like the Palaszczuk Government has done everything in its power to give Terracom a financial leg up even to the point of ignoring departmental staff.
“We’re calling for a thorough inquiry into how this rehabilitation bond has been managed and on what grounds this extraordinary sum of money has been handed over to Terracom.”
The $27M granted to Terracom this year appears to have been the result of the company ‘gaming’ the new mine rehabilitation laws to substitute an insurance bond for an equivalent cash refund from the Rio Tinto rehabilitation account.