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Closure of Straddie sand mine could cost $100m

The early closure of Stradbroke Island’s Sibelco sand mine could cost the economy between $70 and $100 million.

The Queensland Government has proposed to substantively phase out sand mining on North Stradbroke Island by 2019 through the NSIPSOAA Bill 2015. This Bill proposes to repeal the amendments to the North Stradbroke Island Protection and Sustainability Act 2011 made by the NSIPSAA Amendment Act 2013 that extended mining on NSI to 2035.

Sibelco said in a submission to the inquiry, written by RPS.,that the proposal was “inadequate to support the transition of the North Stradbroke Island economy by the cessation of sand mining operations and exports in 2019”.

“The Strategy gives no justification for the cessation of mining in 2019, apart from the decision being tied to an “election promise”. There is no indication that the decision has been subject to a formal Cost Benefit Analysis in line with the State Government’s Project Assessment Framework and therefore there is no evidence to support the timeframe chosen by Government,” the submission said.

“Analysis by RPS indicates the premature cessation of sand mining will result in the local community and State economy foregoing between $70 and $100 million in net benefits (in current dollar terms at a 7.5% discount rate) between 2019 and 2027 and 2032 respectively.

” There is no reference in the Strategy to how the Government will offset the loss of over $70 million (nominal) in tax and royalty revenue to 2034 from the premature closure of sand mining operations of North Stradbroke Islands. There also is no indication of what services on the Island or in other Queensland communities the Queensland Government will be forced to cut.”

Sibelco said there was “insufficient time” to cease mining.

“The timeframe required for economic transitions is long, usually in the order of 20-40 years, as evidenced by the economic and social histories of both Moreton and Fraser Islands,” the submission said.

“The implications of this inadequate investment will be wide spread deterioration of the quality of life of residents and likely reduction in the total population size of the Island in response to reduced and less diverse employment opportunities and falling household incomes.”

Weighing in from the other side of the argument, the National Parks Association of Queensland made a submission saying they do not support the Bill to extend sand mining.

“The Bill is purportedly seeking a compromise between the end dates of 2019 and 2035. The proponents argue that this will provide economic certainty and social harmony whilst allowing a more realistic transition period of time. However, a quick perusal of the recent history of sand mining on North Stradbroke Island shows that this is a false compromise – as Sibelco had previously applied to the Newman LNP Government to extend the Enterprise mine to 2027, although it had the option to extend until 2035,” the submission said.

“The Katter Party Bill will instead result in further destruction and degradation of areas of high conservation and cultural value, including threatened ecosystems – not the most favourable outcome for an island whose major industry is known and valued for its natural environment.

It is highly likely that the island’s largest industry, tourism, will benefit from greater access to NSI’s natural areas and a cessation of mining.

“Further, ABS data highlights the extent to which NSI is not dependent on sand mining, and instead highlights its integration into the economy of South East Queensland. Currently, only 5 per cent of the population is employed in the mining industry on NSI. Only when this integration is ignored, does sand mining on NSI appear of such significance.”

 

Submissions for a Parliamentary Inquiry into the proposal closed on Monday, with the Committee required to report by the end of March.

Image supplied by Sibelco. 

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