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Study warns Australian mine rehabilitation proposal may lead to closures

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Study warns Australian mine rehabilitation proposal may lead to closures

Sixteen mines in Queensland, including those owned by BHP Billiton Group, Anglo American PLC, Peabody Energy Corp. and Glencore PLC, may be forced to shutter should a proposal that threatens to impose crippling taxes on existing mines pushes through, The Australian reported Nov. 12, citing a Ernst & Young study.

The potential economic impact from the draft changes to existing rehabilitation laws could reach up to A$104 billion, based on a cost of A$1.34 billion per mine, and result in the loss of more than 2,500 jobs, the report said. Average and discounted costs to backfill final voids is between A$300 million and A$680 million per mine, which equates to an economic impact of between A$23 billion and A$53 billion, based on the firm's estimates.

"If the proposed changes require all new projects to backfill final voids, the feasibility of many projects would be diminished," the EY report said.

According to the news outlet's report, the Queensland Resources Council's CEO Ian Macfarlane raised concerns over the policy's implementation.

"This is about how we transition existing industry to this new legislation and if we get that wrong we'll not only destroy jobs and existing mining operations, but we'll destroy the sovereign risk profile of Queensland," Macfarlane said.

"There are A$64 billion of projects in the pipeline in Queensland, so if we don't get this legislation right, that pipeline will be severely impacted. This has the potential to literally be a wrecking ball through the future resources and mining pipeline in Queensland."

The QRC, together with the Construction, Forestry, Maritime, Mining and Energy Union's Queensland division, previously signed a letter asking the state's Treasurer Jackie Trad to split the bill and allow for further negotiations over the bill's implementation.