Xstrata Wandoan coal on hold due to poor planning not tax, say environmentalists

Friends of the Earth have accused Xstrata of using the Rudd Government's Resource Profits Tax as a scapegoat to cover up for their own poor planning with regard to the Wandoan coal project that has now been placed on hold.

The Anglo-Swiss mining company Xstrata announced today the "loss" of potential jobs at Ernest Henry copper mine in Queensland and in the Wandoan coal project. These jobs are for planned work - they haven't been created and don't yet exist. The announcement was part of the mining industry's campaign against the imposition of a Resource rental tax (RSPT) on all mining.

The Wandoan coal mine was planned to be one of the largest coal mines in the world, estimated by Xstrata to be worth $6 billion dollars. Situated to the west of the Queensland town of Wandoan which is located just off the Leichhardt Highway 407 kilometres north-west of Brisbane, and 382 kilometres south-west of the Port of Gladstone, in the local government area of Dalby Regional Shire.

“The RSPT puts the future of this globally significant AUD6 billion project at risk, together with the development of the Surat Basin as an internationally competitive export coal region,” Xstrata Coal Chief Executive Peter Freyberg said.

But Friends of the Earth have claimed the project has been poorly planned based upon high coal export prices.

"We've been watching this project for a number of years and could see that it was not viable without the inflated coal export prices we saw during the boom. Xstrata are using the Government's Resource Profits Tax as a scapegoat to cover up for their own poor planning” said spokes-person for Friends of the Earth Brisbane, Eleanor Smith.

“The Wandoan Coal Project is a climate killer”, said Ms Smith “At 30 million tonnes of coal per year, it was to be one of the biggest coal projects in the world and add millions of tonnes to our carbon debt.”

Coal mining is a highly destructive activity often destroying rural communities and alienating agricultural productive farming land. “Xstrata have gone into Wandoan and absolutely decimated that community. Landholders have left, leaving schools and local businesses under pressure. A creeping death has taken over the community which was once a vibrant rural hub,” said Ms Smith who visited the community as part of a research tour of coal affected communities in 2008.

A report on the Queensland coal industry - Community Dialogues on Coal - released by Friends of the Earth on May 1, 2009 said "The coal industry in Queensland is entering a period of enormous uncertainty and risk, with continuing job losses, shrinking global demand, and massive sector-wide restructures due to climate change policy responses. In all this, it is the people of Queensland's coal communities who will have to deal with the very real impacts of this period of transition."

Friends of the Earth have supported the Rudd Government's proposed Resource Super Profits Tax. "It is high time governments taxed mining companies appropriately," said Eleanor Smith, "The resources belong to us, we bear the environmental and health costs of these industries and yet as it stands the Queensland Government gives all the royalties they earn and then some straight back to the coal industry in infrastructure and other services."

"We're really glad the Federal government is standing up to the mining industry and imposing a super profit tax, it's a shame the Queensland Government won't stand up and support it" said Ms Smith.

Friends of the earth have called for the phasing out of the coal industry due to it's contribution to climate change and destructive environmental and social costs of mining. "We need a tax on mining that funds a just transition of our economy away from fossil fuel energy and dirty jobs to sustainability. As the state with the largest mining industry in Australia we should be doing some major planning for a future without coal mining." said Ms Smith.

“The Xstrata case shows that we cannot trust these companies with our future. We simply must move towards sustainable industries that have been shown to provide more jobs, and decent jobs at that!” concluded Ms Smith.

Sources

• Xstrata Media Release, June 3, 2010, - Suspension of expenditure on AUD6BN Wandoan Coal and AUD600M Ernest Henry Underground Copper Projects in Queensland
• Friends of the Earth Media Release, June 3, 2010 - Xstrata Coal Project - Bad Planning To Blame Not Tax
• Friends of the Earth Media Release, May 21, 2010 - Community must counter resource industry pressure!