UPDATE: Anglo American Foxleigh mine sale sparks concern
What we know:
- Anglo American has sold its 70% interest in Foxleigh coal mine
- It's been on the market since February 2015
- Sale will take 3-4 months to finalise
UPDATE 3.15PM Wednesday
Anglo's Foxleigh mine sale is another reason to push for reform, Qld Senator Larissa Waters says.
The Daily Mercury has reported Anglo American was selling its Foxleigh coal mine at Middlemount to Sydney's Taurus Fund Management and that, Senator Waters said in a press release today, is more evidence of the need for the Chain of Responsibility Bill, as well as broader reforms.
"We need to... make sure the government has collected adequate rehabilitation bonds from mining companies in the first place."
The Greens proposed a national audit and Mining Trust Fund in September 2015.
"According to the Queensland Audit Office, the mining rehabilitation bonds held by the Queensland Government are inadequate. With sufficient rehabilitation bonds in place, as coal mines close due to the global transition to clean energy, the bonds can pay wages for local jobs in rehabilitation, in addition to the jobs that will flow if we embrace clean energy.
Mackay Conservation Group's Peter McCallum explains why he is concerned about the sale:
ANGLO American has confirmed the sale of it's Foxleigh coal mine at Middlemount to Taurus Fund Management.
Yesterday Anglo American said it had entered into a Sale and Purchase agreement with the Sydney-based fund manager, to sell its 70% interest in the mine.
The Foxleigh mine has been on the market since February 2015.
Taurus Fund Management director Ian Bain said it had been working on the transaction for five months and it would take three or four months to finalise.
The fund manager was also financing the Isaac Plains coal mine, set to reopen outside of Moranbah in May.
"This is not a new direction. We've had (coal mining) investments in (the USA), New South Wales and Queensland," he said.
"It's a good mine, it's a good product which is metallurgical coking coal, which we're interested in. We like the fundamentals for coking coal."
As part of the transaction, Taurus would purchase Anglo American's shares in Anglo Coal (Foxleigh Management), the company that employs most on-site employees.
Mr Bain said he couldn't comment on how the mine would operate once Taurus had finalised the purchase, but said many of their people had years of experience in the resource sector.
It is believed Taurus would take on all Anglo Foxleigh employee entitlements and site rehabilitation obligations.
As well as coal mine investment, the fund manager invested in base and precious metals.
Anglo American's Dawson and Callide mines have also been on the market since February 2015.
It's Moranbah South, Moranbah North and Grosvenor mines were put up for sale February 2016.
But Mackay Conservation Groups Peter McCallum was concerned the sale of the mine through the transfer of shares would one day see taxpayers footing the bill for the mines' rehabilitation.
When companies buy mines, they have to hand over a certain amount of money to the state government for the eventual rehabilitation of the mine.
But mining companies with a good track record receive a discount from state government on this bond.
And when mines are sold through the transfer of shares, the rehabilitation bond is transferred along with them, without any further reassessment.
Mr McCallum believes this will lead to a situation where the bond paid by Anglo American will not be enough to cover the rehabilitation and the new company, Taurus Fund Management, won't be able to foot the difference.
"When a new owner buys the shares in the company, rather than buying the mine on the market, they don't have to go through the process of getting a separate environmental authority," he said.
"It's likely that (Anglo American's) discount would be of the highest level which could be up to 30% of rehabilitation."
The state government has been contacted for comment.