State mine bid unusual: Premier
Colin Barnett has admitted the State Government’s move to buy into a struggling Collie coal mine was “unusual” but stressed it was needed to protect taxpayers’ interests.
Energy Minister Mike Nahan revealed on Tuesday that State-owned electricity provider Synergy had agreed to pay Chinese-controlled Premier Coal an extra $15 million a year to keep the operation afloat.
WA TO PAY MORE FOR COLLIE COAL
As part of the deal the Government would essentially become a partner in the project by getting an option of taking equity in it
It would also get power of veto over any investment Premier wanted to make.
Asked about the arrangement, Mr Barnett conceded it was unorthodox for the State to get into bed with a miner but justified it as a necessary protection of the Government’s position.
He said it was vital that Premier not be allowed to collapse because it employed 350 workers and supplied more than a third of Perth’s and the South West’s power.
“We accept that it is time for an increase in the price paid for (coal) – it’s a fairly modest increase – and to protect the State’s position of that we do have the option of taking equity in the project,” he said.
Mr Barnett also explained the move to give Synergy veto rights over Premier’s expenditure, saying it was appropriate to prevent “unjustified” investment by the miner for which consumers would ultimately pay.
Shadow energy minister Bill Johnston accused the Government of risking taxpayers’ money to bail out a Chinese-owned company.
Mr Johnston said it made no sense for the State to plough money into the mine when it already had the right to step-in and run it in the event Premier went under.
“If the mine goes broke the equity will be lost,” Mr Johnston said.
