Court to hear Rio Tinto's appeal for mine expansion

August 14, 2013

The Australian Supreme Court is expected to hear Rio Tinto’s appeal against earlier ruling that sided with opponents of the expansion of Rio Tinto’s Warkworth coal mine in New South Wales. However, Rio Tinto said it still expects falling output and job cuts at its Warkworth coal mine regardless of the appeal.

Rio Tinto is disputing claims by some residents of Bulga, near the Warkworth mine that expanding the pit would wreck their community, MarketWatch reported.

Harry Kenyon-Slaney, the head of Rio Tinto's energy division, said the outcome of the appeal won't be known for several months which will be too late to avoid cuts to its 1,300-strong workforce at Warkworth.

“The legal blow we were dealt in April is now forcing us to operate in a reduced footprint, which impacts productivity and drives up costs,” Kenyon-Slaney said in a statement. “If this continues, it will be impossible to maintain production levels at the mine which in turn means fewer jobs.”

More than 10,000 coal-mining jobs have been lost in the past year as companies like Rio Tinto, BHP Billiton and Glencore Xstrata aggressively cut costs and closed unprofitable pits.

Rio Tinto early last year secured state government approval for a A$600 million (US$546 million) development of its Warkworth mine to extend its life by 12 years through 2033. The mine is part of a larger operation producing close to 12 Mt/a (13.2 million stpy) of thermal and coking coal for the local market and customers in Asia.

However, the New South Wales Land and Environment Court in April overturned approval for the expansion because it was not convinced the economic benefits outweighed the environmental and social costs. The state government, which supports Rio Tinto’s appeal, last month proposed amendments to legislation that would limit the grounds for refusing an application for a mining permit.

If the company’s appeal is successful, the case is likely to return to the Land and Environment Court.

 

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