PAC again rejects Drayton South project

PERTH (miningweekly.com) – The New South Wales Planning and Assessment Commission (PAC) has again rejected Anglo American’s Drayton South coal project, maintaining that it could not coexist with nearby stud farms.

The PAC recommendation comes despite the Department of Planning and Environment in September 2016 announcing support for the project, and marks the fourth time that the PAC has rejected Anglo’s bid.

Anglo previously adjusted the mine plan for the Drayton South operation, including reducing the tonnage from a projected 189-million tonnes to only 75-million tonnes and cutting some A$7-billion in coal revenue. The mine plan also reduced the life of the operation from 27 to 15 years.

Operations at the nearby Drayton mine ceased in October 2016, following the PAC’s initial decision not to approve the expansion plan.

Despite the most recent rejection, the PAC recommends that part of the extension of the existing Drayton is approvable and should be allowed to progress as it will provide “some short-term extensions” to current employment at the mine.

In its determination, the PAC took into consideration that the proposed Drayton South operation would employ up to 500 staff and could deliver A$233-million to the New South Wales government in royalty payments, and another A$93-million in company tax, following a A$131-million capital investment and an A$213-million annual operational spend.

However, the PAC pointed out that the animal boarding and training establishments, being Coolmore and Goldophin, to the south of the proposed mine, currently generate about A$300-million in business income a year and, as a result, provide significant direct and indirect employment and expenditure opportunities.

The PAC noted that the established thoroughbred equine operations are sustainable in the long term and are key to the equine critical industry clusters in the locality, whereas the Drayton South project has a finite lifespan of 15 years and would not be central to the sustainability of mining as a preferred land use.

If the PAC had been prompted to accept the development plans for Drayton South, the project would likely have ended on the auction block, as Anglo in 2016 announced plans to divest of its coal interests in Australia, after narrowing its focus to diamonds, platinum and copper.

The miner in April 2016 sold its Foxleigh metallurgical coal mine, in Queensland, while divesting of its Callide thermal coal mine in October.

The miner has also previously said it is in discussions to divest of its Moranbah and Grosvenor mines as part of plans to sell between $3-billion and $4-billion worth of assets.