Bloomberg News

Whitehaven Trumps Environmental Challenge to Australian Mine (1)

December 20, 2013

Whitehaven Coal Ltd. (WHC) defeated an environmental challenge to government approval of its A$766 million ($680 million) Maules Creek mine in New South Wales.

Federal Court Justice Dennis Cowdroy today in Sydney dismissed claims from the Northern Inland Council for the Environment Inc. that the approvals were improper.

“It is a tranformational project for the company,” Paul Flynn, chief executive officer at the Sydney-based company, told reporters after the judge’s ruling. “We’re keen to move on and maintain our schedule.”

The Maules Creek Coal Project, which is to begin production in the first quarter of 2015 according to Flynn, is approved to annually extract 13 million tons of coal in the Gunnedah Basin. The mine has a projected life of more than 30 years and will create 340 jobs during construction and employ about 470 people during mining operations.

The environmental group sought to block the project by arguing former federal environment minister Tony Burke issued the approvals by taking into account irrelevant considerations, namely that the New South Wales government was leaking commercially sensitive information related to the project. The law prohibits the minister from considering any matters not directly relevant.

The group failed to show Burke’s consideration of other matters affected the substance of his decision, Cowdroy wrote.

Laird Forest

The council also said it wasn’t clear Whitehaven had enough land to set aside for native grassland and threatened species that would be displaced by the mine, including the regent honeyeater and the swift parrot. The company is required to set aside almost 10,000 hectares (24,700 acres) of equivalent or better habitat under the approval.

The judge also rejected that assertion, saying the mining company would be held to the conditions imposed on it and would face fines and risk losing the approval if they were breached.

“The law has allowed Laird Forest to be destroyed,” Phil Spark, a spokesman for the council, told reporters today.

The council will review the ruling to determine whether it may have a reason for appeal, Spark said. The group also plans to protest the mine construction with other environmentalists including by chaining themselves to trees, he said.

Whitehaven rose 3.1 percent, the most since Dec. 9, to A$1.86 at the close in Sydney trading. The stock has declined 47 percent this year, compared with the 13 percent climb by the benchmark S&P/ASX 200 Index.

The case is Northern Inland Council for the Environment Inc. v Minister for the Environment, Heritage and Water and Whitehaven Coal Ltd. NSD1404/2013. Federal Court of Australia (Sydney).

To contact the reporter on this story: Joe Schneider in Sydney at jschneider5@bloomberg.net

To contact the editor responsible for this story: Douglas Wong at dwong19@bloomberg.net


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