Qld: GBRMPA approves dumping of dredge spoil from Abbot Point capital dredging program

On 31 January 2014, the Great Barrier Reef Marine Part Authority (GBRMPA) approved North Queensland Bulk Ports Corporation’s (NQBP) application to dispose of dredge spoil within the Great Barrier Marine Park.

The Abbot Point capital dredging program (Project) which was approved by the Environmental Minister, Greg Hunt, on 11 October 2013 (see blog post of 13 December 2013), involves the removal of 3 million cubic meters of spoil in respect of Terminals 0, 2 and 3.

In reaching the decision to approve the proposed dumping, GBRMPA noted that:
  • allowing the Project to proceed as planned would help contain development to existing ports,
  •  the strict environmental conditions imposed on the Project by the federal government would help to protect the reef, and
  •  it would support the use of an alternative site if one is found to be equal to, or better, in terms of environmental or heritage outcomes.

The approved disposal site is located approximately 25 kilometres east-north-east of the Port of Abbot Point, while the investigation zone being assessed for alternative locations is located 20 to 30 kilometres from the area being dredged.
Nevertheless, all dredge spoil is required to be tested by accredited laboratories to ensure that there are no contaminants in the dredge spoil prior to the commencement of dumping. No contaminants have yet been identified.
NQBP has welcomed the approval and has committed to abiding by the strict environmental conditions.

For further information, please contact Jay Leary, Partner, Roger Allingham, Solicitor, Brisbane or your usual Herbert Smith Freehills contact.

Qld: Government grants Environmental Approval for North-Queensland projects

On 11 October 2013, Federal Environment Minister Greg Hunt (Minister) approved three North-Queensland projects.

The Minister approved:

  • the Abbot Point capital dredging program which involves removal of 3 million cubic meters of spoil in respect of Terminals 0, 2 and 3, making the Port of Abbot Point one of the world’s largest coal ports;
  • Adani’s T0 Project, a $3 billion, 70mtpa expansion of Terminal 1 at the Port of Abbot Point and associated infrastructure (including a 2.75km outloading jetty and conveyor, new wharves, ship loaders and development of two offshore berths);
  • Arrow Energy’s Curtis Island LNG processing plant, a $17.46 billion project involving a 9.45km underwater gas transmission pipeline from the mainland to Curtis Island.

The Minister’s approval of the projects was accompanied by some of the ‘strictest conditions in Australian history’ due to the potential impact on the Great Barrier Reef. The Minister imposed 95 environmental conditions on the Abbot Point capital dredging program and 53 on the Curtis Island LNG processing plant.

Indian mining giants GVK and Adani Group, the owners of Terminal 3 and Terminal 0 (respectively) stand to benefit most from the Minister’s approval. Both companies are developing significant coal projects (and associated infrastructure) in the Galilee Basin, the coal from which is expected to be exported through the Port of Abbot Point.

The projects mentioned above are all still subject to final investment decision.

For further information, please contact Jay Leary, Partner, Roger Allingham, Graduate, or your usual Herbert Smith Freehills contact.

Qld: Government releases Galilee Basin Development Strategy

On 7 November 2013, the Queensland Premier, Campbell Newman, released the Galilee Basin Development Strategy (Strategy). The Strategy acknowledges the long-term economic benefits that opening up the Galilee Basin to mining would bring to Queensland and is designed to support and encourage business and industry to develop key infrastructure across the region.

The Strategy details government initiatives aimed at early development of the southern and central Galilee Basin (with priority to be given to ‘first movers’). These initiatives include:

  • lowering start-up costs by offering a discounted royalty period which will gradually ramp-up to full royalty by the end of the period,
  • streamlining land acquisition, planning, approvals and red tape reduction by compulsorily acquiring land for projects, delivering project approvals in a timely way and consider declaring projects ‘prescribed projects’ to overcome unreasonably delays in obtaining project approvals,
  • positioning Abbot Point as the Galilee’s gateway to the world by reserving the Terminal (T2) development site for a proponent to develop coal stockpiling and handling infrastructure, and
  • supporting infrastructure development and corridors by supporting the development of localised water solutions, encouraging and assisting private investment in relevant electricity transmission and prioritising the development of roads critical to opening up the Galilee Basin.

No further details have been released at this stage.

Notably, the Strategy comes less than a week after approval of GVK’s Kevin’s Corner project which is expected to be Australia’s biggest coal project. Kevin’s Corner joins the adjacent Alpha Coal project which was approved in August 2012.

In addition, Aurizon has been developing an integrated rail transport and port solution for Galilee Basin coal over the past two years.

For further information, please contact Jay Leary, Partner, Roger Allingham, Graduate or your usual Herbert Smith Freehills contact.

Queensland government calls for EOI in it’s lucrative bauxite leases

The Queensland government has called for expressions of interest in its lucrative bauxite leases in far north Queensland, but with a twist, the private sector must come up with initiatives to financially benefit Cape York indigenous communities. Initiatives could include traditional owners being given direct equity in the project, a cash payment or jobs and business opportunities on the mine.

Pechiney of France originally held the leases offered by the government, but these were removed from them in 2004. The tender for the Aurukun leases was later won by Chinese group Chalco, which agreed to the condition that it establish an alumina refinery at Abbot Point. The refinery was not economically viable, however, and the Queensland government again took the leases back.

With much of the same profitability issues that hampered Chalco’s refinery development in 2010 still in existence (weak macro economic conditions, low metal prices and a strong Australian dollar), it is unsurprising that the new Queensland government has decided to offer the leases without the requirement that the bauxite be refined in Queensland.

Premier Campbell Newman stated that “the Bligh Government ran a strategy whereby it would lease the bauxite to a company under the condition it established a refinery or expanded refinery capacity. Their strategy of leasing the bauxite under the conditions of establishing a refinery simply will not work.”

Despite the fact that Aurukun’s bauxite ore is not as high quality as Rio Tinto’s Weipa or that at the South of Embley project, there is still expected to be significant interest in the leases. Mr Newman further stated that

“… over the coming months we will now go to the market and seek fresh expressions of interest and by April next year we expect to shortlist bidders to participate in a tender process for the right to develop the resource.”

A decision is expected by the end of 2013.