Broadcast on ABC Local Radio Queensland’s Country Hour on May 7, 2010.
Despite the uproar in the mining industry over the government super tax, Queensland businessman Clive Palmer says he’ll go ahead with the huge Waratah megamine project in the Galilee Basin in Central Queensland.
The resources sector says that the new tax will thwart investment and mining and drive investment overseas, but this morning the man behind Waratah Coal, Clive Palmer, said he plans to go ahead with the thermal coal project north of Alpha, as planned.
Our reporter Nicky Redl went to a business breakfast in Mackay this morning where the guest speaker was one of the head honchos at Waratah.
TRANSCRIPT:
JANE PATERSON: G’Day Nicky, how are you?
NICKY REDL: Yeah, I’m well, Jane.
JANE PATERSON: Who was at this breakfast this morning?
NICKY REDL: The speaker at the breakfast was the managing director of Waratah Coal, Phil McNamara. And the room was actually quite full, so a good turnout for that breakfast.
JANE PATERSON: Did he provide any new details on the Waratah Coal project?
NICKY REDL: Look, I think most of the things he said we already knew. The only thing that was really different from what I saw on the website, the estimated cost was around 7.5 billion Australian dollars; he now estimated that around over 8 billion US dollars.
But apart from that, the China First Project as it will be called will be based 50 kilometers north of Alpha in the Galilee Basin. They are planning to mine 50 million tons a year of thermal coal. They are also saying the quality of the coal is not the same as in the Bowen Basin, so it’s a mixed quality, but with some very good quality amongst it.
And the general resource they are quoting is nearly 4 billion tons of coal, but because of that varying quality of that, the target amount they are planning to mine is about 1.4 billion tons.
JANE PATERSON: So where is the money going to come from for them to undertake the Waratah project?
NICKY REDL: They are working with several Chinese construction companies. They have Chinese customers and Chinese banks as well to come up with the money needed for this massive project. Seventy percent will come through debt funding and the remaining 30 percent they want to access through capital raising.
They say they also have a 30 million tons sale contract to export coal back into China for the next 20 years, but Mr. McNamara said those contracts will still be finalized over the next few weeks.
JANE PATERSON: So who is their major partner in this project?
NICKY REDL: Their main partner is a Chinese engineering and construction company called China Metallurgical Group Corporation, MCC, but there are also three other Chinese companies, including Sinosteel.
JANE PATERSON: So did Mr. McNamara say anything about the infrastructure that will be needed for this project to get up and running?
NICKY REDL: Well, at the moment there is no infrastructure at the Galilee Basin so they will have to build a 490-kilometer railway and a port as well as the mines.
So they didn’t give any comment so far if they are planning to share any of that infrastructure, but they are planning to build accommodation for about 6,000 construction employees, 1,500 of those jobs will be permanent, so those facilities will stay at the site.
And a lot of those people will later be on a fly-in fly-out basis. From what I understand, workers will mostly then be based in Brisbane, Mackay, and Rockhampton, and be flown in and flown out.
JANE PATERSON: Interesting if the main part of the funding for this project is coming from China, Nicky, what does that mean for employment of locals from Central Queensland itself?
NICKY REDL: Look, that was one of the questions asked and he simply didn’t give a clear answer to that.
He was acknowledging that some of the engineering work, or quite a lot of the engineering work, would be done overseas and also quite a lot of the equipment would be coming from China, but he was also said, obviously, a lot of the maintenance and work on the mine won’t be possible without Australian engineers and also without Australian companies being involved.
But, he really didn’t give any clear figures and he simply didn’t give a clear answer to that question.
JANE PATERSON: So it’s still a bit up in the air as to whether or not those 6,000 construction jobs that we talked about and the 1,500 permanent jobs would be filled by Australians?
NICKY REDL: Yeah no, he certainly didn’t give a clear answer to that, no.
JANE PATERSON: Okay, so what’s the timeline then for the project to actually begin, because there is a lot of talk about it but when is it actually, the first sod sod turned, if you like?
NICKY REDL: Well, he was saying they are planning to start construction at the end of this year, and they are hoping to get into production by late 2013.
JANE PATERSON: Alright, interesting, given all the talk from all the other major miners that they won’t be going ahead with projects with the new tax that the federal government has placed on them. Thanks for that Nicky.
NICKY REDL: Thank you.
JANE PATERSON: Reporter Nicky Redl from a business breakfast address by Phil McNamara, the managing director of Waratah Coal that was held in Mackay this morning. Waratah of course planning to build a brand new thermal coal mine near Alpha in central Queensland.
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