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The Northern Myth

Sep 13, 2017

Glencore, “open and transparent” government and the little EDO (NT) that could

In the Territory these amounts have previously been confidential, but we know it is important for Territorians to know the mining industry is being held accountable. With that in mind, we are moving in line with other jurisdictions to make security amounts available to the public: NT Minister Ken Vowles

I wasn’t the only one in the NT who spluttered Weetbix all over my computer keyboard yesterday morning when I read this media release by NT primary industries minister Ken Vowles that sometime today his department would release previously confidential figures on just how much the NT government is holding by way of mine security bonds.

This is big news and as Vowles made clear in his statement, is clearly related to a Freedom of Information application bought by David Morris, principal (and only) solicitor at the Environmental Defender’s Office (NT) and Jack Warngkurli Green, a senior traditional Aboriginal owner of land around the giant McArthur River mine. That FoI application concerned the quantum of the rehabilitation security bond paid by the mine, operated by Glencore in the NT Gulf country.

The FoI application commenced in October 2015 following the announcement by then NT Chief Minister Adam Giles that, following years of scandal over poor environmental management at the mine, saw the security bond substantially increased after some difficult negotiations between the government and the mine operator. The only problem was that the figure remained a secret.

The NT EDO—a tiny operation with one employed solicitor, one support staff member, a bunch of volunteers and a shoestring budget—applied to the then Department of Mines and Energy for disclosure of the amount of the mine’s security bond.

Following early partial success—the department reckoned that correspondence between the NT government and Glencore could be released, but that the bond amount figures be redacted—David Morris and Jack Green went the long way round, seeking an internal departmental review and then an appeal to the NT Information Commissioner, who then referred the matter to the NT Civil and Administrative Tribunal for determination.

Earlier this year NTCAT found in favour of David Morris and Jack Green, ordering that the full, unredacted version of the correspondence between Glencore and the government—including the dollar figures of  the security bond—be released, subject to a 60-day stay to allow for any appeal of that decision to the NT Supreme Court. Significantly, the NT government—named as a respondent in the NTCAT action—decided to make no submissions in that matter, agreeing only to abide by any decision made.

Predictably, Glencore appealed the NTCAT decision to the NT Supreme Court and the first directions hearing of that appeal was listed for this morning. And, while many here were surprised by the NT government’s decision yesterday to release not only the dollar amounts of Glencore’s security bond but those of the other eight mines currently operating in the NT, that decision is, as cautiously foreshadowed by Minister Vowles in October 2016, entirely consistent with the new Labor administration’s  mantra of “open and transparent” government:

We came to Government with a promise to Territorians that we would be and open and transparent,” Minister Vowles said. We will not make this policy on the run and look forward to a sensible conversation about how we can provide the transparency that will help ensure continuing public support for this industry that is so crucial to our economic future and jobs. There is currently a matter before the Northern Territory Civil and Administrative Tribunal that has highlighted a government policy issue and the NT Government will consult with industry and the broader community on any future policy on mine security release.

As well as David Morris and Jack Green, Glencore named Vowles’ department as a respondent to the Supreme Court appeal. As any responsible government would do, it sought legal advice about Glencore’s prospects for success and any likely fallout for the government. The Northern Myth understands that advice indicated that Glencore would fail in it’s appeal.

Notwithstanding the Glencore appeal—which concerns a challenge to the NTCAT decision and not the policy surrounding mining security bonds—the NT government decided to get on the front foot and take what some—particularly in the mining industry—regard as a “crazy-brave” decision to release not only the amount of Glencore’s security bond but the security bond values for all nine mines currently operating in the NT.

In the statement released yesterday morning, minister Vowles made his government’s policy position clear:

In the Territory these amounts have previously been confidential, but we know it is important for Territorians to know the mining industry is being held accountable. With that in mind, we are moving in line with other jurisdictions to make security amounts available to the public … The NT Government seeks to strike a balance between supporting an industry that contributes a significant amount to the economy and the interest of Territorians in ensuring appropriate environmental management … [I]ncreasingly, industries such as mining are being required to develop their own social licence, and this new policy will help them do so.

The Northern Myth understands that the total amount of the nine security bonds is around $1.4 billion, with Glencore’s bond making up $500 milllion of that total and Alcan’s bauxite/alumina mine at Gove in north-east Arnhem land—which has very substantial problems with the “red mud” waste ponds a by-product of many years of mining—being the next largest bond.

The issue of mining security bonds is also the subject of on-going, and as yet unresolved, litigation in the NT Supreme Court. In 2016 small iron ore miner Territory Iron challenged a decision by the NT Mining Board review panel to increase the size of the then mothballed operation’s security bond.

As local ABC News reported at the time, the mining Minister’s lawyer, Stephen Donaghue QC (now Commonwealth Solicitor-General) told then Acting Chief Justice Stephen Southwood that the security bond of $5.4 million could never meet the estimated $20 to $30 million in rehabilitation costs for the mine and that:

There is no reason why the Territory should carry the financial risk if an operator chooses to carry out authorised mining activities in a way that causes increases in the cost of environmental rectification or rehabilitation works. The existing security is patently inadequate.

The mining security bond figures are expected to be listed at the department’s website later today. David Morris, Jack Green and Vowles’ department will appear in the NT Supreme Court at 10am in response to Glencore’s appeal.

This morning the EDO(NT) released a statement that says in part that the NT’s new policy is welcome and that it:

… promotes transparency and allows a more open and honest discussion about the Territory’s mining industry. The policy also reflects the fact we say the public is entitled to this information under NT law, and that is what we will argue in the current appeal in the Supreme Court where Glencore is seeking to overturn the NTCAT decision.

And a very quiet word on the street last evening was that an urgent injunction may be bought against the release of the security bond figures sometime later today.

Watch this space.

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UPDATE: The NT Department of Primary Industry & Resources has released the mining security figures for the nine operating mines in the NT. You can see the full figures and background at the department’s website here: https://dpir.nt.gov.au/mining-and-energy/mines-and-energy-publications-information-and-statistics/mining-environmental-reports/mining-securities

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Photo: Glencore’s McArthur River mine waste dump on fire. ABC News NT

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One thought on “Glencore, “open and transparent” government and the little EDO (NT) that could

  1. Bob Gosford

    The NTG has published the security bond figures here: https://dpir.nt.gov.au/mining-and-energy/mines-and-energy-publications-information-and-statistics/mining-environmental-reports/mining-securities
    This is a cut & paste of the figures on the website (apologies for the formatting!).
    Mining securities
    A mining security bond is held (by DPIR) for all authorised mining activities. The mining security bond will be utilised by government, if required, to prevent, minimise or rectify environmental harm caused by mining activities on or off the mining site or for completion of rehabilitation.

    Mining securities are calculated based on the amount of disturbance likely to be caused by the authorised mining activities. Authorised mining activities are detailed in the approved Mining Management Plan (MMP).

    Site Current Operator Authorisation Number Security Assessed Security Held (as at 11 Sept 2017) Comments
    McArthur River Mine McArthur River Mining Pty. Ltd. 0059 Sept, 2015 $476,094,542 Security held is consistent with the current approved MMP. Security will be revised should the current Environmental Impact Assessment process recommend mine expansion and the Minister authorises the mine expansion.
    Alcan Gove Mine Alcan Gove Pty Limited 0035-02 Feb, 2015 $650,928,464 Security has been discounted for infrastructure, which is currently owned by the Operator and is likely to be retained post closure of the mine. For example, airport and port.
    Gemco Mine Groote Eylandt Mining Company Proprietary Limited 0126-01 Nov, 2016 $100,941,092 Security has been discounted for infrastructure, which is currently owned by the Operator and is likely to be retained post closure of the mine. For example, airport and port.
    The Granites Gold Mine Newmont Tanami Pty Ltd 0086-02 Jun, 2016 $38,686,910 Security is based on the level of disturbance likely to be caused by the mining activities as assessed against the current MMP.
    Bootu Creek Manganese Project OM (Manganese) Ltd 0011-04 Apr, 2016 $8,917,209 Security is based on the level of disturbance likely to be caused by the mining activities as assessed against the current MMP.
    SILL80 Roper Project Australian Ilmenite Resources Pty Limited 0721-01 Feb, 2017 $445,795 Security is based on the level of disturbance likely to be caused by the mining activities as assessed against the current MMP.
    Cosmo Project NT Mining Operations Pty Ltd 0546-03 Nov, 2015 $6,374,012 Security is based on the level of disturbance likely to be caused by the mining activities as assessed against the current MMP.
    Edna Beryl Mine Edna Berryl Mining Company Pty Ltd 0880-01 June, 2016 $53,250 Security is based on the level of disturbance likely to be caused by the mining activities as assessed against the current MMP.
    Dhupuma Plateau Bauxite Mine Gulkula Mining Company Pty Ltd 0929-01 Apr, 2017 $58,850 Security is based on the level of disturbance likely to be caused by the mining activities as assessed against the current MMP.
    Total $1,282,500,124
    Note: The department currently holds a total of $1,339,141,171 in mining securities.
    Securities held against individual mining Authorisations can be obtained on written application addressed to the Manager Mining Register by emailing mineral.info@nt.gov.au

    Last updated: 12 September 2017