Iron Ore Mine Gets the Go-Ahead After Legal Delay
The Riley Creek Iron Ore project in Tasmania has received the green light after a challenge by environmental group, Save the T arkine, was dismissed by the Federal Court last week.
The project owner, Venture Minerals, has been plagued by a trading halt since August last year, due to legal battles with the group, which has tried to block plans with the proposed iron ore project near Tullah in Tasmania.
According to Justice Richard Tracey, the case presented by Save the Tarkine was frivolous, declaring that the environmental group had failed to make good any of its grounds and should pay costs to the Commonwealth and Venture Minerals.
“Even though the Tarkine National Coalition has lost the case, they have still managed to delay the project and frustrate the company for months, at great cost,” said Terry Long, CEO of the Tasmanian Minerals and Energy Council. “The point is they’ve achieved their objective, delaying Venture’s project for many months and costing the company and its many contractors a great deal of money.”
“In addition, they have prevented the small and medium businesses which would have been working on the project since early last summer from doing so.”
“I note that costs have been awarded against the TNC and expect they will be substantial – in the hundreds of thousands of dollars.”
The iron ore mine in Tasmania will employ 60 people, inject $40 million a year into the state’s economy and provide capital to develop a bigger project at nearby Mt. Lindsay.
Any appeal to Justice Tracey’s decision would need to be lodged within 21 days.
Low carbon world needs $1.7trn in mining investment
According to a new report from consultancy Wood Mackenzie, mining companies need to invest nearly $1.7trn in the next 15 years to help supply enough copper, cobalt, nickel and other metals needed for the shift to a low carbon world.
Cutting carbon emissions
The United States, Britain, Japan, Canada and others raised their targets on cutting carbon emissions to halt global warming at a summit in April hosted by US President Joe Biden.
Meeting those targets will need large-scale deployment of electric vehicles, storage for power generated from renewables and electricity transmission, all of which require industrial materials, such as lightweight aluminium and metals used in batteries such as cobalt and lithium.
Wood Mackenzie analyst Julian Kettle calculated miners needed to invest about $1.7trn during the next 15 years to “deliver a two-degree pathway - where the rise in global temperatures since pre-industrial times is limited to 2°C”.
“At an industry level, there seems to be reticence around investing sufficient capital to develop future supply at the pace and scale demanded by the energy transition (ET),” he said.
Mining firms are wary of making heavy investments after their experience of the last decade when they invested in new capacity just as demand peaked, leading to a collapse in prices and revenues. They also need to please investors, who are unlikely to want to see dividends diverted to capital spending.
Rising demands of investors related environment, social and governance (ESG) issues further add to the challenge.
Australia, Canada and Western Europe carry a low ESG risk but some of the best resources are in high-risk areas, such as Democratic Republic of Congo, which sits on about half the world’s cobalt reserves according to the U.S. Geological Survey. “Given the need to meet tough decarbonisation and ESG targets, Western governments, lenders, investors and consumers will need to get comfortable operating in jurisdictions where ESG issues are more complex,” Kettle said.
Kettle said government support was needed to help miners comply with ESG issues to ensure production from high-risk areas was conducted in an acceptable way to consumers.
“Then, and only then, will the West be able to secure sufficient volumes of the raw materials needed to pursue the energy transition in the timescales envisaged.”