Rehab costs ‘still too low’

A REPORT released by a leading Victorian environmental organisation has called for legislation to prevent companies from evading mine rehabilitation costs in the event of closure.

The report, released by Environment Victoria today, highlights job opportunities for the Latrobe Valley in a range of areas which capitalise on existing skills as well as mine rehabilitation.

But the report said mine operator estimates of rehabilitation costs were “much lower” than the real expense and suggested measures to ensure the government could recover costs from the operators.

It calls for the cost of rehabilitation bonds paid by mining companies to be raised to match State Government estimates when it carries out a rehab cost review next year.

The report also highlights the potential for companies to leave the responsibility for mine rehabilitation with subsidiary companies that hold no assets, which would make it difficult for the government to recover costs if the subsidiary collapsed.

There is no suggestion any operator is considering this, but the report believes legislation implemented in Queensland, which allowed the government to access parent company assets for rehabilitation costs to remove the possibility of this occurring, be adopted in Victoria.

Environment Victoria chief executive Mark Wakeham said there had been a number of examples in Australia and internationally where this had occurred and would prevent parent companies “cutting the umbilical chord” from their subsidiaries and avoiding their responsibilities.

“That’s a risk, it’s partly mitigated by having adequate rehabilitation bonds,” Mr Wakeham said.

“But we still know the rehabilitation bonds for the Latrobe Valley are nowhere near high enough to cover the rehabilitation costs.”

The report also identified opportunities in energy efficiency, including:

An energy efficiency program to retrofit houses, which would create 620 jobs over 10 years if adopted;

A commercial building energy efficiency program, which the report said would save $27.7 million in energy costs across the region which could be used to support 147 jobs;

The establishment of a ‘State Transition Centre’ which would take advantage of existing skills to develop renewable energy, manufacturing and energy initiatives;

Developing prefabricated housing construction in Morwell, and;

Supporting the establishment of solar hot water system manufacturing in Morwell.

Mr Wakeham said the report was not designed to be a blueprint for transition, but to put ideas on the table.

“But what we do need is ideas and we need community-led proposals and we absolutely need government support over the long term,” he said.

“It’s not just support for when Hazelwood closes, it’s support for the region over the next decade as multiple power stations are likely to close.”

The report identifies actions which could be undertaken by government to support each initiative.

Mr Wakeham said government support was important as leaving the market to deal with power station closure would be “messy and chaotic”.

“I think the community needs to be driving the ideas and government supporting them with resources over a long period,” he said.