In an affidavit to the Supreme Court, Rio Tinto subsidiary Coal & Allied argued that the Warkworth project – which aims to maintain production levels of 18 million tonnes per annum and extend operation of the mine beyond 2021 – needs an early appeal decision by the court to provide certainty.
“At extraction levels less than 18 million tonnes per annum (which provides approximately 12 million tonnes of product coal per annum) the economic viability of Mt Thorley Mine Complex can be threatened in certain economic situations,” the affidavit states.
“Further significant job losses are expected at the mine if economic conditions remain the same as present unless the mine can maintain its volume of product coal produced at 12 million tonnes per annum.”
The affidavit states that an area known as Saddleback Ridge would not be able to be mined if its appeal is not upheld. It says the cost per tonne for production will rise significantly because of the reduced length of face that the mine’s draglines can operate on.
“Job losses could start this year and will continue as the inability to access the Saddleback Ridge area continues to impact on the mine’s ability to mine at a level that would mean the mine can maintain production at 12 million tonnes of product coal for 2014,” it stated.
Coal & Allied made 40 employees redundant at the mine last month as part of a company-wide review of costs.
Coal & Allied acting managing director Darren Yeates said the company was forced to make a thorough review of future operations and employee numbers at Mount Thorley Warkworth after the Land and Environment Court decision.
“The unfortunate reality is this decision has come at a time when the Australian coal industry is struggling to remain globally competitive in the face of high costs, a strong Australian dollar and low prices,” he said.
“Mount Thorley Warkworth mine has been working to strengthen its long-term viability by reducing costs throughout this year.
“Regrettably, 40 employees and contractors are either having their position made redundant or being let go from the site today, as part of this ongoing work.”
The Warkworth extension project is the continuation of operations at Mount Thorley Warkworth mine, within the footprint of Coal & Allied’s existing mining tenements.
The existing consent expires in 2021 and the extension will allow mining to continue until 2033.
On existing production rates of around 12Mtpa, this would produce around 264Mtpa.
The NSW Department of Planning recommended approval and then referred the project to the independent Planning Assessment Commission, which conducted public hearings before approving the project on behalf of the NSW government in February last year.
