Rio Tinto’s claim that the Mt Thorley Warkwarth expansion would bring $1.5 billion into the NSW economy has been slammed by Australia Institute economist Rod Campbell.
Campbell said an economic assessment carried out for Rio Tinto had understated operating costs and overstated community benefits, all with intent for selling the Hunter Valley coal mine.
“By assuming a high coal price and low operating costs, BAEconomics [for Rio Tinto] give the impression of a financially strong project with ‘gross operating surplus’ of $2.2billion,” Campbell said.
The Mt Thorley Warkworth mine has met with ongoing impediments to expansion over the past year, with plans rejected by the Land and Environment Court and the NSW Supreme Court due to environmental and social impacts.
With new applications for expansion lodged in June, Rio Tinto managing director Chris Salisbury said it was critical that approvals were made urgently, as production could only be maintained until the end of next year.
The economic assessment carried out by BAEconomics held the view that if the mine closed only 30 per cent of the workforce would be re-employed because the rest would leave the industry labour force permanently.
Campbell said there was no evidence to support this claim, as Australian Bureau of Statistics data showed coal sector employment is still close to record levels, and held the lowest underemployment out of all industries.
BAEconomics spokesman Brian Fisher rejected Capmbell’s criticism as being predictable from the “anti-mining activists at the Australia Institute”, stating that his figures were conservative and that benefits to the region could be greater.