TerraCom has been given the green light to buy the Blair Athol open cut coal mine.
The ASX has been informed of the Queensland Government’s indicative approval to formally purchase the northern Bowen Basin mine off Rio Tinto.
TerraCom executive chairman Cameron McRae said all approvals were now in place to allow the company to reopen the mine by the end of March.
“We have been working for some time with the Clermont community to prepare for the decision and we’re ready to put regional Queenslanders to work,” Mr McRae said.
“This decision will have massive flow on benefits for the region. We will not be relying on fly in fly out workers and workers will live in the regional community.
“We are committed to local suppliers and businesses and we will be purchasing local housing stock to support mine workers and provide a boost to the local economy.”
The Queensland Department of Natural Resources and Mines has given its formal indicative approval for the transfer of the mining lease for the Blair Athol Coal mine from Rio Tinto to Orion Mining Pty Limited – a wholly owned subsidiary of TerraCom.
The project will generate 150 direct jobs and a further 450 indirect jobs in the region and TerraCom is committed to providing employment opportunities for local workers in the region, rather than operating a fly-in-fly-out workforce.
Mr McRae said the mine, which was mothballed in 2012, had been maintained to a high standard and all equipment on site was ready to be put into operation immediately.
“On the back of rising coal prices this is great news for TerraCom and its shareholders, the local and regional community and the people of Queensland,” Mr McRae said.
“Without this lease transfer the mine may never have reopened and the jobs and economic opportunities could have been lost forever.”
When production recommences at the Blair Athol mine it is expected to produce high quality coal over the next 7 years – delivering a $210 million boost to the state government from new taxes, royalties and stamp duties.
TerraCom purchased the Blair Athol mining lease for $1 but the deal also included $79.6 million – to be transferred to a government-controlled trust fund – for rehabilitation costs and TerraCom will contribute a further $13.5 million.
The mine’s rehabilitation costs were covered and there was no risk to Queensland taxpayers, Mr McRae said.
TerraCom will also relocate its head office to modern facilities in Clermont, he said.