A Wollongong councillor has raised concerns that taxpayers could end up paying a million dollar bill for the clean up of the Russell Vale coal mine if it does close for good.
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Wollongong Greens councillor Cath Blakey said there was a "big risk" that the community would have to pay for the eventual remediation of Russell Vale mine.
In an email to staff on Monday afternoon, management told workers the mine's owners Jindal Steel and Power had decided to close Russell Vale and Wongawilli mines.
The prospect of another buyer re-opening the mines has been raised by politicians and workers' representatives, but others have said that Russell Vale in particular was no longer viable.
If this latest closure does mean the mine has closed for good, the question remains how the more than 100 year old mine site will be rehabilitated.
In NSW, miners are required by law to put in place plans for the rehabilitation of mines at the end of their life. This includes lodging a bond with the Resources Regulator and the local Council.
A spokesperson for the Department of Regional NSW said this covered the cost of rehabilitation.
"The Resources Regulator holds adequate security for the assessed rehabilitation cost of the Russell Vale colliery."
The Resources Regulator holds a $12 million bond, the size of which is based on regulatory approvals.
"Wollongong Resources has indicated it is aware of its rehabilitation obligations and will work towards this as part of its closure program," the spokesperson said.
A separate bond had to be held with Wollongong City Council, which in 2020 was outstanding.
A Wollongong council spokesperson said the mine's closure did not release Wollongong Resources from its obligations to maintain the site.
"Council continues to seek compliance with conditions relating to the emplacement area, rehabilitation of land and dedication to Council."
In 2020, Wollongong Coal, the former name of Wollongong Resources, estimated the cost of rehabilitating the Russell Vale mine at $215 million. At that time, the company was in financial strife, having no income and debts that exceeded its assets by over a billion dollars.
A 2016 report from civil society organisation the Mineral Policy Institute singled out Russell Vale as presenting a particular financial risk in closure, with a lack of a closure plan and a lack of commitment to effective mine closure.
In the years since, the company undertook a massive debt restructure, wiping $77 million of the company's debts and was able to temporarily restart mining operations.
Since delisting from the ASX in 2020 it is difficult to assess the financial health of the Wollongong Resources, however the company's inability to ship large amounts of coal for a sustained period, the investment required from the parent company to reopen the mine and the decision by Jindal Steel and Power to close the mine suggests that the company would retain debts to its parent.
Satisfying these debts, employee entitlements and covering rehabilitation costs would be a large task and Ms Blakey said the sudden closure of Russell Vale raised questions about what would occur at other mines in the Illawarra and around the state.
"These are financial decisions that a boardroom makes, but they have a big impact on our community and what we have to live with in terms of pollution and risk."
