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Chinese proponent walks away from $6.7B mine in North Queensland

MacMines Austasia China Stone Project
MacMines Austasia China Stone Project

An Asia-backed mining company has stopped seeking approval for its $6.7 billion project in Queensland’s Galilee Basin.

A subsidiary of China-headquartered Meijin Energy Group has suspended its application for regulatory approval for its China Stone Coal Project, 270km south of Townsville.

The State Department of Natural Resources, Mines and Energy (DNRM) confirmed the proponent, MacMines Austasia, “voluntarily” decided not to continue with its bid for mining leases.

“MacMines has voluntarily not progressed their five mining lease applications for the China Stone project,” a DNRM spokesperson told the Australian Broadcasting Corporation. “The schedule associated with progressing a mining lease application are subject to the proponent’s commercial decisions.”

The project was hoped to create 3900 construction jobs and 3400 positions once operational. However, the latest move will leave these roles in limbo.

MacMines chief executive Russell Phillips confirmed talks are underway on the future of the project without confirming whether it will proceed.

“[It is] definitely not being shelved,” he said according to the Australian Associated Press.

The project involves building open-cut and underground coal mines, a coal handling and preparation plant, tailings, water storage facilities, an airstrip, accommodation village and power station according to the State Department of Development, Manufacturing, Infrastructure and Planning’s website.

The Institute of Energy Economics and Financial (IEEF) Analysis believes the project is unlikely to proceed without obtaining the necessary mining leases.

“Obviously, by relinquishing it [the process], they’re saying they don’t think it has value, or it certainly doesn’t have value in excess of the cost of developing,” IEEF financial analyst Tim Buckley said.

The Queensland Environmental Defenders Office (EDO Qld) also believes the proponent will be unable to progress with the project without the mining leases.

“It is safe to assume they can’t move forward now,” EDO Qld senior lawyer Sean Ryan said. “The inability to get financial backing for a project in the Galilee is key here for MacMines. The four largest SOE (state-owned) banks in China all agreed not to finance mines nor infrastructure relating to Adani, hence the company eventually declared they would self-finance, an acknowledgement they could not find external finance.”

The Queensland Resources Council (QRC) said there are six project opportunities that could be explored even if the China Stone mine does not go ahead.

“Given the size and location of the Galilee Basin, it’s not expected that all projects will develop all at once,” QRC chief executive Ian Macfarlane said. “Resources areas are developed over long time frames, which is one of the reasons why they are so important to regional Queensland.”