Lock the Gate Alliance has urged the Independent Planning Commission to reject Wollongong Coal’s application to expand its Russell Vale coal mine because it would pose an unacceptable risk to Sydney’s precious drinking water supply.
Planning Minister Rob Stokes has referred the expansion to the IPC with the requirement that a public hearing into the proposal be conducted within 12 weeks of receiving the Department’s assessment report.
Lock the Gate Alliance NSW spokesperson Nic Clyde said the project should never have reached this point because the company was a “financial basket case”.
“Wollongong Coal is likely trading while insolvent, has a multibillion dollar debt problem, and would struggle to financially cover the rehabilitation of their existing mine site, part of which is underneath Sydney's drinking water catchment," Mr Clyde said.
It has been reported the company’s estimated cost of rehabilitating the Russell Vale colliery is $215M, while the NSW Government’s Resources Regulator requires just $12.4M in financial assurance. It is not clear what the additional $202.6M rehabilitation liability is or how it would be funded if Wollongong Coal collapsed.
“Whatever the true cost of rehabilitation, this company has so little capital, it recently applied to be de-listed from the ASX because it couldn’t continue paying basic listing fees. It has also been suspended from trading since December 2018,” Mr Clyde said.
“Wollongong Coal also has zero revenue, and negative shareholders funds.
“Despite its serious financial woes, Wollongong Coal wants to expand its mine underneath Sydney’s drinking water catchment.
“Wollongong Coal is a train-wreck of a company and the Berejiklian Government should have stripped it of its right to mine years ago.
“The IPC must reject this terrible proposal, because there is clearly too great a risk for Wollongong Coal to be trusted with Sydney’s precious water resources."
The company’s other mine, at Wongawilli, was shut down by regulators last year over safety concerns.
WaterNSW has also previously raised concerns about Wollongong Coal’s planned expansion at Russell Vale, saying “WaterNSW notes that this is a unique mining proposal where a third coal seam is proposed to be undermined under already mined Bulli and Balgownie seams. One of the key uncertainties with the proposed mining area relates to the stability of the Bulli seam pillars, the potential for pillar run, and associated subsidence and environmental consequences including induced leakage."