Wandoan coal project scrapped

John Hepburn

Chain Reaction #119, Nov 2013, www.foe.org.au/chain-reaction/editions/119

In September, Australian media outlets declared that Glencore/Xstrata had shelved the massive Wandoan thermal coal project in the Surat Basin in Queensland.[1] This means that not only will the 40 million tonnes of thermal coal that they planned to mine from Wandoan each year stay in the ground, but it also means that the Southern Missing Link rail line almost certainly won't get build because Xstrata's Wandoan mine was the cornerstone project. This means that roughly 70 million tonnes p.a. worth of other smaller proposed coal mines in the region are in serious trouble.

For communities concerned about climate change and the negative environmental impacts of large-scale coal mining, this is a win. We had heard rumours from internal company sources that XStrata had made this decision but it is great news to have it confirmed publicly.

I remember going into the Brisbane Land and Environment Court for a day of hearings in 2011 when Friends of the Earth (FoE) and a group of local landowners were taking Xstrata to court to challenge the approval of the Wandoan mine. The Xstrata barristers were unbelievably confident. The landowners were stoic, but worried. Friends of the Earth were strident. I had a conversation with one of Xstrata's barristers in the lift. I told him that I hoped they would lose.

The landowners were objecting to the mine on the grounds of water impacts, impact on farmland, and impacts on their lives and businesses. FoE objected on the grounds of the global climate change impacts of burning 40 million tonnes of coal each year for 35 years. The full documentation for the project and the court case can be found on Chris McGrath's excellent website (www.envlaw.com.au/wandoan.html). FoE had brilliant testimony by their expert witness Malte Meinshausen who explained the climate change and ocean acidification impacts of the mine.[2]

After several months of deliberations, the court rejected the climate change arguments. The landowners had a mixed outcome. The Erbacher family and a couple of other local landowners have continued with their legal fight up until this day. Earlier this year they won a landmark compensation claim against Xstrata − which the company is now appealing. The Erbachers have also filed a judicial review case in the Supreme Court which has not yet been allocated a hearing date.

It has been an incredibly long and expensive process of seeking justice through the courts for the Erbachers and the other landowners. And despite the announcement to investors that they will be shelving the project, Glencore/Xstrata have not withdrawn it from the planning system and, as far as we know, are still seeking to have the mine approved by the State Government.

The tenacity of the landowners has been an inspiration but it has taken a very heavy toll on them. And in some ways the nightmare continues. The mine is "on hold". It isn't cancelled. If and when coal markets become more favourable, there is nothing to stop GlencoreXstrata from re-commencing the project, or from selling it to another company as an approved mine. For landowners, it makes it difficult for life to ever get back to normal.

This highlights one of the fundamental difficulties in campaigning to stop a coal mine, compared to stopping a coal plant or a port. The coal resources under the ground have a theoretical value on a company's balance sheet that an unbuilt coal plant or port does not. It means that while coal plants and ports get scrapped, mines just get put "on hold".

The Wandoan project gives a particularly clear example of this. When the the Glencore/Xstrata merger was confirmed earlier this year, it became pretty clear that the Wandoan project would be in doubt because Ivan Glasenberg (Glencore CEO) had been clear about not supporting greenfield projects. In April, we heard rumours from senior sources within Xstrata that they had decided not to go ahead with either the Wandoan mine or the proposed coal terminal at Balaclava Island in the Fitzroy Delta.

A group of us wracked our brains to try to figure out how to flush out the Balaclava Island decision ahead of the World Heritage Committee meeting in June so that it might open the political space for the Federal Environment Minister to formally rule out new coal ports in the Fitzroy Delta (which is part of the Great Barrier Reef World Heritage Area) − a decision which would also knock out the proposed Fitzroy Terminal project proposed by the Mitchell Group (which is far less politically influential than Xstrata).

Glencore/Xstrata AGM

The Glencore/Xstrata AGM was coming up in Switzerland in May of this year and Getup, FoE, WWF, Australian Marine Conservation Society and The Sunrise Project worked together to support Ginny Gerlach from the Keppel and Fitzroy Delta Alliance (KAFDA) to fly to Switzerland for the meeting. KAFDA wrote to Xstrata and purchased shares so that Ginny could speak from the floor of the AGM. She respectfully let them know she was coming and did media interviews before her departure.[3] Getup! prepared to run full page ads to run in the European financial press, targetting Glencore/Xstrata over the destruction of the Great Barrier Reef.

Ginny got to Switzerland and prepared herself for the meeting only to find that Xstrata announced the day before the meeting that they would be scrapping the proposed Balaclava Island coal terminal. After such an incredible grassroots community campaign it was an incredible result. But in typically resolute fashion Ginny proceeded with her presentation to the AGM anyhow. She got great feedback from shareholders at the meeting who had no idea their company was proposing to build a new coal port in the Great Barrier Reef World Heritage Area.

The Glencore/Xstrata announcement over the scrapping of Balaclava Island was made on the May 13. Three days later, unbeknownst to any of us, then Federal Environment Minister Tony Burke wrote a strongly worded letter to the Mitchell Group stating: "While not prejudicing my position in relation to the assessment, I believe it is only fair to advise you that if the following information, which is now publicly available, had been contained in the referral documentation, it is likely that I would have made the decision that your proposal was clearly unacceptable. ... I am writing this letter in good faith, given that you may be spending considerable amounts of money on a project which has an exceptionally complex approval pathway."

This letter was released recently after an FOI request by Graham Lloyd at The Australian.

As we anticipated, now that the big fish was out of the way (Xstrata), it paved the way for the government to effectively stand up to the small fry (Mitchell Group) and push for the kind of sensible environmental decision that it should have made in the first place. The Mitchell Group proposal is still on the table but it looks like it has lost political support from both the Coalition and ALP (and it never had any form of public support).

Balaclava Island was not "put on hold" or "delayed" but scrapped. A few weeks after the AGM it was formally withdrawn from the planning system. At the time, Glencore/Xstrata insisted that the Wandoan mine was still on the table. Now it is officially "on hold", which is as good as we are going to get.

It is likely that the delays to the Wandoan project by the concerns of local landowners fighting for their legal rights pushed the final investment decision back by several years − enough to shift it out of the peak of the coal boom and into the current trough.

Things could have been very different.

My thoughts are with the Erbacher family and all of the other landowners and rural communities around Australia who inadvertently find themselves in a fight with some of the biggest companies on earth. Their tenacity and courage to stand up for their rights is an inspiration.

At some point in this fight, we need to get to the point where the government simply rules out coal mines on our best farmland, in water catchments and on top of rural communities. And then at some point we'll need to get to the stage where it is illegal to dig up and burn fossil fuels because of greenhouse pollution.

Like all large social transformations it will take time. In the meantime, communities have little choice but to keep fighting to protect the places they love.


[1] www.smh.com.au/business/wandoan-coal-project-scuppered-20130910-2ti7x.html

[2] www.envlaw.com.au/wandoan12.pdf

[3] www.themorningbulletin.com.au/news/activist-off-to-switzerland-lone-voic...

John Hepburn is Executive Director of The Sunrise Project. Web: www.sunriseproject.org.au