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Peabody bankruptcy threat must trigger coal industry closure plan

Peabody Energy, the world’s largest private-sector coal corporation, has indicated it may need to file for bankruptcy in the United States, triggering calls for intervention by Australian Governments (both state and Federal) to ensure Australian communities have support and programs to adjust and recover from the global structural decline of the industry.

Peabody would be just the latest major United States-based coal corporation to file for bankruptcy, following announcements from Alpha Natural Resources and Arch Coal in the last few months. The company operates six mines in Queensland – Burton, North Goonyella, Coppabella, Middlemount, Millennium and Moorvale, and three in New South Wales – Wambo, Wilpinjong and Metropolitan. 

Lock the Gate mine rehabilitation spokesperson, Drew Hutton, said the Queensland Government must tell the public whether it has sufficient money held in bonds to cover the cost of best-practice rehabilitation of Peabody’s six open cut sites in Queensland. 

“It is well known that the $5.3bn of financial assurances held by the State Government is well below the total cost of rehabilitating Queensland’s mines,” Mr Hutton said.

“The financial assurance for Peabody’s open cut mines in Queensland is $312m. That may sound like a lot but the real cost is likely to be between three and five times that - over $1bn based on known real world mine rehabilitation costs. We are calling on the State Government to undertake a peer-reviewed audit of the cost of rehabilitating these mines and outline to Queenslanders the extent of the financial assurance deficit that may have to be paid for by Queensland taxpayers,” he said. 

New South Wales Coordinator Georgina Woods said, “Two of Peabody’s New South Wales mines, Wambo and Wilpinjong, are currently seeking approval to expand, despite clear signals that Peabody are preparing to file for bankruptcy.

“These mines have devastating social and environmental consequences, but the NSW Government seems willing to just keep throwing communities and the environment under the crashing bus of multi-national coal corporations with no thought of where we’re heading. What we’ll be left with are unemployment cues, vanished water resources, ghost villages and huge ugly holes in the ground.

“The first thing State Governments need to get their heads around is that approving new and expanded coal mines is worsening the coal oversupply problem and leading to mine closures and job cuts. Any further expansions in NSW must be halted, and immediate steps taken to ease process of change that is underway,” she said. 

Hutton concluded, “This bankruptcy threat is a sign of worsening ruptures to come and must trigger urgent reform of how State governments deal with assurances for mine closure and rehabilitation. The public is going to be slugged with a huge clean-up bill if we carry on as we are.”

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