Trading Room home page

Govt delays decision on Maules Creek mine

Market watch top headlines

Australian reports

World reports

Stocks to watch

ALQ, AGO, BCI, FMG, RIO, BHP, HRR, NAB, PDN, PRY,

AAP

2013-02-07

The federal government has delayed by three months its decision on whether to allow Whitehaven Coal to develop a controversial mine in northern NSW.

Whitehaven says it is disappointed by Environment Minister Tony Burke and his department's decision to extended their timeframe for considering the Maules Creek project until April 30.

Investors were equally unimpressed, with Whitehaven's shares slumping by nearly six per cent in early trade.

Managing director Tony Haggarty said Whitehaven had spent many months working with Mr Burke's office and staff at the Department of Sustainability, Environment, Water, Population and Communities (SEWPAC) to address concerns about the mine.

"Whitehaven is not aware of any substantive issues with the environmental evaluations or process which has been followed," Mr Haggarty said in a statement on Thursday.

"We look forward to understanding the reasons for Minister Burke's decision to extend the process and will address, as a matter of urgency, any questions or input from Minister Burke or SEWPAC."

Whitehaven's plan to develop one of the world's biggest open-cut coal mines has already received approval from the NSW government.

It hopes to begin selling its first coal from the mine in mid calendar 2014.

However some environmentalists fear Whitehaven will destroy 1360ha of koala habitat and force farmers off their land through soil damage if the Maules Creek mine is allowed to go ahead.

The Nature Conservation Council of NSW has called on the federal government to reject the Maules Creek mine proposal.

Whitehaven shares had dropped 18 cents, or 5.96 per cent, to $3.00 by 1024 AEDT.

Patersons resources analyst Andrew Harrington said the delay was disappointing as the government had not explained its reasons and appeared unwilling to face the potential of a community backlash.

He noted that the mine falls within the electorate of key independent Tony Windsor, whom the government relies on to hold its parliamentary majority.

Mr Harrington said Whitehaven's plan to start producing coal from the mine in 2014 could be under threat because of the government's delays in making a decision on the mine.

"This will impact on sentiment but Maules Creek is a very large long-life mine and a delay of a few months on first production has almost no impact on the value of the project," he said in a note to clients.