The Government’s surprise decision to formalise a ban on coal mining in Margaret River has sent a shudder through WA mining circles, triggering claims it would scare off investors.
Mines Minister Norman Moore announced the blanket ban on exploration or mining in a 230sqkm patch of the South West stretching from Geographe Bay near Dunsborough to Margaret River.
The prohibition, which was sparked by community opposition to a 2010 proposal by Vasse Coal to mine coal about 15km from Margaret River, is to be enacted via section 111A of the Mining Act.
It allows the Minister to ban mining in the “public interest” and will prevent coal exploration or mining in the area.
Six companies will have their existing exploration or mining rights terminated, according to the Government, including Scaddan Energy which is a joint venture between Wesfarmers and Blackham Resources.
Association of Mining and Exploration chief executive Simon Bennison said the ill-defined “public interest” test set a dangerous precedent for any commodity and mining region and increased uncertainty for the industry.
“It will add to Western Australia’s sovereign risk as a safe place in which to invest,” he said.
Chamber of Minerals and Energy chief executive Reg Howard-Smith said it was opposed to quarantining zones from mining and each project should be considered on its merits under existing strict environmental approvals.
Mr Moore rejected suggestions it had increased WA’s sovereign risk and ruled out compensation. He said it was a unique situation because the Environmental Protection Authority would reject — as it did for the Vasse project — any future coal proposals on the basis of the risk to local water supplies.
“What I am saying is there is no point companies wasting time and money seeking an exploration licence or a proposal to mine in that area because you are going to get the same result as Vasse Coal got,” Mr Moore told West Business.
“This is just about coal and that area of the State because of the relationship of the coal ore body and the aquifer. It doesn’t apply to any other minerals (including shale gas) in the area. It doesn’t apply to any other part of the State.”
Companies were reluctant to wade into the debate yesterday, but one executive said it “sends an awful signal to future governments, especially with an election coming up”.
Vasse Coal, Hudson Resources, Wesfarmers and Blackham Resources declined to comment.
But a spokesman for mineral sands miner Bemax Resources said it was confident the decision would not impact on its project in the adjoining Whicher Range.
The Government at one stage proposed specific legislation to ban coal mining in the area. Sources said the current approach was an attempt to prove a ban could work without legislation, given fears the laws could be used in future to target coal projects such as the Kimberley’s Rey Resources.