PERTH (miningweekly.com) – Mining major Anglo American said on Friday that it would wind down its Drayton South coal operation, in New South Wales, in 2016, resulting in the loss of some 500 jobs, after the Planning Assessment Commission (PAC) blocked the mine expansion.
The PAC this week said that the proposed Drayton South expansion would critically impact stud-farming operations in the region, and that mining and horse-breeding activities were not compatible in close proximity.
In its assessment, the PAC noted that while both the coal mining industry and the stud-farming industry were important to the region, the mining industry was not heavily reliant on the Drayton South expansion, while the same could not be said of the New South Wales thoroughbred breeding industry.
Anglo American had previously adjusted the mine plan for the Drayton South operation after the PAC twice refused the company’s application to expand the current operation for fears that it would negatively affect horse-breeding operations.
Anglo American in January submitted a new mine plan for the Drayton mine expansion, reducing the tonnage from the mine from a projected 189-million tonnes to only 75-million tonnes and cutting some A$7-billion in coal revenue.
The new mine plan also reduced the life of the operation from 27 to 15 years.
The PAC said this week that while it recognised that Anglo American had made its best efforts to minimise the impacts on the neighbouring stud farms, and that the impacts would generally be considered acceptable in another location in the Hunter Valley, the project could nonetheless not be approved.
“This is the worst possible outcome for our workers, for the Hunter Valley community and for New South Wales,” Anglo American coal CEO Seamus French said on Friday.
“Unemployment in the Hunter Valley is at 8% and to reject a project that would have continued to support this region for another 15 years, providing local people and their families with security, is incomprehensible.”
French said that in its assessment, the PAC had ignored the detailed scientific assessment and peer-review reports contained in the project’s environmental-impact statement, the New South Wales government policy, and expert advice from 13 government agencies.
“This decision sends a terrible message about New South Wales as an investment destination - the expert advice of government agencies can be set aside on a whim.
“In this case, unfounded claims and threats from two horse studs have trumped the social and economic benefits of a considered, responsible project which has overwhelming community support.”
French said Anglo American’s immediate focus was now on its people, adding that full support would be given to staff.
The miner would review the PAC’s report and would consider a closure plan for the Drayton South operation.