Australia approves Whitehaven’s controversial coal mine expansion

Whitehaven Coal (ASX: WHC) has been granted the green light to expand its Vickery project in New South Wales despite a global push to lower carbon emissions and a historic court ruling on authorities’ obligation to children to consider environmental harm before approving coal projects.  

Federal Environment Minister Sussan Ley’s decision comes just six weeks before world leaders meet for the United Nations Cop26 climate conference in Glasgow, Scotland, where Australia is being pressed to announce tougher emissions reduction targets. 

Prime Minister Scott Morrison’s government has so far resisted international pressure to commit to net zero emissions by 2050, ruling out charging polluters by setting a price on carbon. 

Vickery’s expansion approval, published on September 16, is the second coal project Ley has given her blessing to in the past two weeks and comes amid reports of large financial institutions officially withdrawing funds for the sector.

It also follows a study showing that emissions from coal mined in Australia, but exported and burned overseas, almost doubled the nation’s domestic greenhouse gas footprint in 2020. 

The research by energy industry consultancy group Kayrros showed the Bowen Basin, which straddles the border between the states of New South Wales and Queensland, released an average of 1.6 million tonnes a year of methane in 2019 and 2020.  

Based on government data, total emissions in Australia, the world’s biggest coal exporter, totaled 499 million tonnes in 2020. 

Whitehaven noted that 62% of 560 public submissions received were in favour of the project going ahead. It also said that Ley had attached 37 conditions to her approval. 

“Against the current backdrop of record high coal prices and strong demand in seaborne markets, the company sees a continuing role for high-quality coal of the type Vickery will produce in contributing to global CO2 emissions reduction and containment efforts while simultaneously supporting economic development in our near region,” the company said. 

Whitehaven says the project will extend the life of the mine by more than 20 years, producing mostly metallurgical coal for steel making, though it will also generate thermal coal, destined for premium export markets. 

It involves the construction of an open-cut coal mine and associated on-site infrastructure situated 25km north of Gunnedah. The expansion will double coal production capacity to 10 million tonnes of both kinds of coal. 

With a capital investment estimated at US$498 million, the project is also expected to create 500 construction jobs and 450 positions during the operational phase.