Today’s announcement that TerraCom Limited has an agreement to purchase the defunct Blair Athol mine from Rio Tinto is unlikely to ever eventuate due to significant financial and technical issues.Mackay Conservation Group has been pressuring Rio Tinto to live up to its corporate responsibility and complete rehabilitation of the mine.
On 4 July, Rio Tinto agreed that it would sell the mine to the small, heavily indebted mining company, TerraCom for $1. Rio Tinto also agreed to pay the Queensland Government $80 million in cash to cover the estimated cost of rehabilitating the mine.
In the past couple of months we have received a leaked copy of the Department of Environment & Heritage Protection’s report on the bond at Blair Athol that shows that there is a shortfall of $20 million in the current bond.
Industry insiders tell us that the real cost of rehabilitating the site is likely to exceed $160 million.
It seems that Rio Tinto has pulled the wool over the eyes of TerraCom investors and is about to offload huge liability on a company with limited financial resources and huge debts.
Rio Tinto must accept that it made the money mining Blair Athol and it must take the responsibility for cleaning up the mess.
TerraCom Limited recently announce that it had operational losses in 2015/16 of $17.5 million. Over the past five years the company has had operational losses totalling nearly $150 million.
In the current market it is unlikely that TerraCom will make sufficient profits to ensure that the mine can be fully rehabilitated to a state that is acceptable to the Queensland community.
Rio Tinto on the other hand has set aside billions of dollars for rehabilitation and they should spend some of those funds creating jobs in Central Queensland.
