London | A controversial Australia-backed British coal mining project has been kicked into the long grass, sparking fears among backers that its key investor, Melbourne mining veteran Owen Hegarty, might walk away.
The £165 million ($297 million) Woodhouse coking coal project in Cumbria, northern England, has been thrown into doubt after a backflip from Prime Minister Boris Johnson’s government late last week.
Under pressure from climate campaigners, the government dropped its tacit support for the project – the country’s first new coal mine in three decades – and announced a public inquiry.
“My worry is that the investors in the mine have had enough and they’ll walk away,” said Mike Starkey, the Conservative mayor for the surrounding district of Copeland.
Mr Hegarty’s private equity vehicle, EMR Capital, bought a controlling stake in the project’s developer, West Cumbria Mining, in 2016.
The Oxiana founder and former Rio Tinto executive declined to comment to The Australian Financial Review, referring questions back to WCM. The British company has stayed silent since the inquiry was called.
Until last week, Mr Hegarty’s bet seemed to have paid off: Woodhouse was on the cusp of going ahead. It scored formal backing from Cumbria County Council in October and then from Britain’s planning minister, Robert Jenrick, in early January.
Sustained campaign
But a sustained campaign by climate activists had eaten away at this political resolve. Last month, Cumbria Council decided to review the project again after a stern warning from Britain’s Climate Change Committee.
And Mr Jenrick issued a “call-in” for the project on Thursday (Friday AEDT), saying inspectors would reconsider “the extent to which the proposed development is consistent with government policies for meeting the challenge of climate change … [and] for facilitating the sustainable use of minerals”.
Mr Johnson’s green credentials are in the spotlight because of his vocal climate advocacy as Britain prepares to host the COP26 United Nations climate conference in November. This gave anti-coal campaigners a lever to apply pressure to reverse the government’s endorsement of the project.
The inquiry is likely to last until after the COP26 conference, taking the heat out of the issue. Mr Starkey said he hoped this would allow the government to renew its support for the mine.
“If investors stick with it and it goes to a public inquiry, the mine will get a favourable decision and it will go ahead,” he said,
The mine would produce 2.7 million tonnes of metallurgical coal a year. Its proponents say the steel industry will need coking coal for the foreseeable future, and if it is not produced in Britain it will have to be imported – potentially increasing the carbon emissions involved.
Local Conservative MPs also back it because it will create 500 jobs in a relatively disadvantaged region peppered with marginal electorates. Recently elected MP Trudi Harrison, whose seat covers the site, is a parliamentary aide to Mr Johnson.
Green groups say the kind of coking coal the Woodhouse Colliery would produce is not suitable for Britain’s steel mills, making the project pointless. They also want to see coal mining, already a tiny and dwindling industry in Britain, phased out altogether.
The environmentalists also have a judicial review of Cumbria Council’s decision in the works – but that may now be paused until the public inquiry is complete, potentially further delaying the project.
Fonte: Financial Review
