An aerial view of Blair Athol mine. Picture: Lock the Gate Alliance
An aerial view of Blair Athol mine. Picture: Lock the Gate Alliance

Fears CQ mine will be abandoned over company’s money woes

There are fears a Central Queensland mine will be abandoned if the owner is unable to dig itself out of "severe financial trouble".

A Debtwire credit report for TerraCom - the owner of Clermont's Blair Athol mine - was produced and dated March 24, 2021.

The report was based on the ASX-listed miner's first half-year financial results for the period ending December 31, 2020.

It stated the company "continued to burn through cash" and was only left with $4.1m in cash at the end of December.

Debtwire reported TerraCom had a total debt of $249.4m and an EBITDA of -$39.9m in the past 12 months.

Mackay Conservation Group co-ordinator Peter McCallum said it appeared the company was in "severe financial trouble".

"Unless they can find a financier before the end of June, that company could go into liquidation," Mr McCallum said.

"That raises serious concerns about the rehabilitation of the (Blair Athol) mine site if that company abandons the mine."

The Daily Mercury contacted TerraCom for comment, but did not receive a response by deadline.

An aerial view of Blair Athol mine. Picture: Lock the Gate Alliance
An aerial view of Blair Athol mine. Picture: Lock the Gate Alliance

Lock the Gate Alliance rehabilitation spokeswoman Ellie Smith said the group was also concerned there would be insufficient funds to complete the necessary rehabilitation of the mine if TerraCom folded.

"The Queensland taxpayer and Clermont community will suffer as a result," Ms Smith said.

"It's particularly worrying because the Queensland Government has handed more than $30m back to Terracom from an $80m rehabilitation cash bond put up by former owner Rio Tinto, despite also allowing TerraCom to mine through areas that Rio had already rehabilitated."

TerraCom purchased Blair Athol coal mine from Rio Tinto for just a $1 in 2016, which required an $80 million rehabilitation bond.

The bond is an estimated cost of rehabilitating a mine site in case a miner fails to do so.

In May last year, Lock the Gate Alliance claimed freedom of information documents and corporate statements revealed the government allowed the company to draw down $32 million from this bond, despite TerraCom mining through areas that had previously been rehabilitated.

But a Queensland Treasury spokesman said the estimated rehabilitation cost for the site was determined to be $71.7 million, which was currently being held by the Treasury.

A Department of Environment and Science spokeswoman said it had reduced the financial assurance required from TerraCom by about $5 million in December 2017.

"The reduction was based on changes to the site's management and rehabilitation proposed by TerraCom," the spokeswoman said.

"TerraCom is trialling alternative ways of reinstating topsoil to achieve the same level of rehabilitation, which are different to the mine's previous owners.

"The topsoil trials will not be included in the site's 'rehabilitated area' until they are shown to be successful."

Mackay Conservation Group coordinator Peter McCallum.
Mackay Conservation Group coordinator Peter McCallum.

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Mr McCallum said if the company went into liquidation and the mine was abandoned, then the state government would use whatever funds available in the rehabilitation bond to rehabilitate the site.

"Once that money runs out it goes onto a list of abandoned mines," he said.

Mr McCallum said if this was to occur, nothing would be done to the site except for signage and fencing.

The Australian Securities and Investments Commission and police raided Blair Athol mine last month.

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