Leaks reveal $3.2b shortfall in mine cleanup fund

A MINING company based out of a cottage in rural New South Wales will move ahead with plans to buy one of Queensland's oldest coal mines, despite claims the clean-up costs could be $20m more than anticipated.

This week a report was leaked from the state department of environment and heritage protection that said the money set aside to rehabilitate mines could be short by up to $3.2b.

Financial assurances are bonds held by state government to repair damage made to the landscape by mining.

Mackay Conservation Group's Peter McCallum said the report raised serious questions about whether companies were committing sufficient resources to clean up the mines that had given them "handsome profits".

"Mining companies rent the land from Queenslanders, yet the Queensland government has allowed mining companies to get away with behaviour that would land any other tenant in the courts," Mr McCallum said.

"These mines have devastating environmental consequences, but the Queensland government seems willing to keep giving the mining industry special treatment."

Mr McCallum said the report also raised questions over the proposed sale of Blair Athol Coal Mine to TerraCom from Rio Tinto, which has not yet been approved by government.

Junior mining company TerraCom, based out of a Thirroul cottage, recently announced plans to buy the mine near Clermont for $1, providing current owners Rio Tinto place $80 million cash in a bank account controlled by the State Government for the mine's eventual rehabilitation.

However, the Mackay Conservation Group claimed to have information the rehabilitation would cost closer to $160m.

This sparked a crowd funding campaign, where the group aimed to come up with $2000, '2000 times the current offer', to buy the mine, providing Rio Tinto agreed to fund the entire rehabilitation.

Mr McCallum said the offer would be put to Rio Tinto next week.

The report leaked this week put the cost of rehabilitation at $100.1m

A TerraCom spokesman was asked yesterday if he found this news concerning.

He said TerraCom wouldn't speculate on the issue of the leaked report and it remained focused on the opportunity to reopen Blair Athol mine.

"We will continue to work toward that goal, which we believe is beneficial to the region and to the state," he said.

Rio Tinto was also approached for comment, and simply said the current plan of operations had been approved by state government.

But state environment minister Dr Steven Miles said there had been concerns about the validity of the report.

"This report was prepared by the department and was not provided to me at the time," Dr Miles said.

"I understand more senior officers had concerns about the methodology applied and conclusions made in the report."

He said there were steps underway to ensure rehabilitation costs were met, and new laws had given the department the power to pursue related parties where appropriate.

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