Big coal plan goes quiet
Glencore says it will withdraw from its $1.5 billion Valeria coal project in central Queensland.
The mining company says increased global uncertainty and its target for net zero total emissions by 2050 goal means it cannot continue with the planned mine.
It had sought to build an open-cut metallurgical and thermal coal mine 27 kilometres north-west of Emerald, with construction initially planned to begin in 2024.
“This decision has been made in the current context of increased global uncertainty and is consistent with Glencore's commitment to a responsibly managed decline of our global coal business and our ambition of being a net zero total emissions business by 2050,” a Glencore spokesperson said.
“We will continue to progress various brownfield coal extensions at existing mines in Australia, but note that within the next four years our Liddell, Newlands and Integra mines will close and undergo appropriate rehabilitation.”
The Queensland Government decided to increase coal royalties in June this year, introducing three new progressive tiers for prices above $175 a tonne.
The increase has been slammed by the mining industry, and appears to have played a part in Glencore’s decision.
A company spokesperson said the “abrupt” decision had “damaged investor confidence, increased uncertainty and raised a red flag with key trading partners”.
“Governments are already benefiting from higher royalty and corporate tax revenue from the Australian coal sector,” the spokesperson said.
The local Central Highlands Regional Council mayor Kerry Hayes said the mine would have helped the region.
“Obviously it's disappointing … [because of] the magnitude of the mine and obviously the benefits to the Central Highlands and the broader region,” Cr Hayes said.
“As their statement clearly says, there is some uncertainty and despite the fact that thermal coal prices are quite high in terms of the opportunity for Glencore to capitalise on that, the reality is this is a long-term project, it requires significant investment.
“I guess the board makes a decision in respect to whether they want to keep pursuing that.
“Obviously from a self-interested perspective [I] would love to see it go ahead.”
Environmentalists have welcomed the decision.