Mining companies set to lose billions after Jackie Trad’s threat

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Thousands of jobs and billions of dollars in potential investment could be at risk as Australia’s ­biggest miners face the threat of a $20 billion bill to pay for the clean-up of mines under legal changes brought forward by Queensland Treasurer Jackie Trad.

Ms Trad, along with BHP, Anglo American, Peabody and Glencore, have been locked into strained negotiations over proposed amendments to the Mineral and Energy Resources Bill.

Ms Trad said the legislation is the most significant upgrade to the financial assurance and rehabilitation framework of the state’s multi-billion-dollar resources sector in nearly 20 years.

In comments obtained by The Australian, Ms Trad said “I’m confident this legislation strikes the right balance for the environment and the resources sector, while ensuring resource companies, not taxpayers, foot the bill for the rehabilitation of failed mines or stranded assets,” Ms Trad said.

What are the proposed changes?

According to The Australian, mining companies are outraged at a series of proposed changes to legislation, including imposing retrospective costs involving extra rehabilitation of existing mines and creating a public interest test separate to the existing project approvals framework.

The public interest test is understood to be on top of a strict environmental impact statement process, which already involves the co-ordinator-general, much like NSW where the Independent Planning Commission has stymied the development of some mines.

The changes can also potentially expose mining companies to delays and appeals from activists, significantly adding costs.

Miners have warned that should the legislation proceed, thousands of jobs and future investment may be imperilled because of the financial slug to the state’s largest revenue earner. Industry sources said the ­hit to miners from retrospective moves on rehabilitation could go as high as $20bn in direct costs should legislation proceed.

“The rules of the game are now very unclear,” said one Queensland miner with knowledge of the discussions.

“It’s a terrible outcome for the community and a terrible ­outcome for ­investors because it introduces fresh uncertainty.”

Why are these changes coming in?

Changes to mine ­rehabilitation were sparked when it emerged taxpayers were at risk of having to foot a $40 million clean-up bill following the collapse of Clive Palmer’s Queensland Nickel refinery in Townsville.

Miners and the Queensland Resources Council are understood to be furious at the changes and considering a public campaign against the bill ahead of the legislation being introduced to cabinet on Monday. It is important to note the resources sector adds more than $55bn to the state’s bottom line and contributes more than $4bn in royalties, according to the QRC.

It is understood further meetings will be held between the QRC and government officials over the proposed changes in the next two days in a last-ditch attempt to negotiate a middle ground.

“We must prioritise stable regulation that does nothing to deter future investment,” Queensland Resources Council chief Ian Macfarlane said, adding the resources sector employed 300,000 Queenslanders directly or in supporting industries.

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