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Smaller mining and junior exploration companies may get a break from paying remediation and rehabilitation costs for abandoned mine sites, Treasurer David Janetzki revealed.
The state government launched a review of a scheme which forces companies to help cover costs if they abandon the site or fail to deliver on environmental obligations.
The companies can do this by providing financial security upfront, paying annual contributions to a Queensland government fund, or both.
The industry has long lobbied for the scheme to be ditched, saying it’s a deterrent to new investment and unfair on smaller companies.
“Feedback from industry has been that it puts a disproportionate burden on smaller and emerging resources companies who find it difficult to get the credit required to meet obligations of the scheme, because the financial security amount is determined by a company’s risk profile,” Janetzki told a CEDA event on Monday.
“The review will balance the needs of industry, the environment and the community to ensure Queensland remains globally competitive.
“Many junior and mid mid-tier operators are required to tie up hundreds of millions of dollars in financial assistance that could otherwise be invested.”
Resources Minister Dale Last said the review would evaluate the scheme’s policy settings and administrative arrangements.
“This review will make sure the scheme remains fit for purpose and supports responsible resources development across Queensland without constraining investment,” he said.
Warren Pearce, chief executive of industry body Association of Mining and Exploration Companies, said the scheme had locked away significant capital from junior and mid-tier operators.
“It’s essential that the FPS works for all parts of the industry, not just the largest miners. It’s often the junior and mid-tier companies taking the early risk in developing new mineral projects, which creates opportunities in regional Queensland,” he said.
Janetzki conceded the scheme was introduced in response to companies failing to properly rehabilitate sites or not fulfilling their environmental responsibilities after going out of business, but he said greater balance was needed to encourage investment in the industry.
“You look at some of the smaller miners and junior explorers [and] their opportunities to step into older mines, abandoned mines or mines the big miners don’t want to be part of any more – there’s an opportunity there for those smaller miners and explorers,” the treasurer said.
When asked who would pay for remediation and rehabilitation if not these companies, Janetzki said the review will not seek to eliminate it altogether.
“The highest environmental standards will be expected,” he said.
“The review will seek to strike a balance between these standards and encouraging junior miners and explorers to invest in the industry. There will be remediation and rehabilitation.
“We’re an open for business state, we want to make sure we’re getting investment going in the resources sector.”
Janetzki was also pressed at the CEDA event during a Q&A about how the government will build infrastructure for the 2032 Brisbane Games.
“There’s money in the budget,” he said. “It’s up and running.”
The next financial year would be a big year of delivery, Janetzki said.
Data compiled by ratings agency S&P Global for this masthead painted a dire image of Queensland’s financial situation due to the rising cost of covering interest bills attached to debt.
S&P Global director Anthony Walker said Queensland would face particular problems due to the fixed timing of the 2032 Games.
“With the Olympics, you’ve got to deal with the cost, the scope and timing. You can’t control the scope and the timing is set. The only thing that can give is cost, which is what we will see,” he said.
“Every government underestimates the cost of building a stadium.”
In response, Janetzki said it was “highly likely and inevitable there’d be a rating downgrade”, but it was due to the fiscal legacy of the previous government.
He said he would share the measures taken with S&P in the coming months.
“I’m not giving up on retaining the rating, notwithstanding the inevitability of the downgrade that was left to us by the former government.”
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