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The Australian mining industry is in trauma over a lost appeal to build a coal mine in hunter valley, which was denied by the court on 08 February 2019, over its potentially dire environmental impact. The judgment was delivered by Justice Brian Preston of the Land and Environment Court in the state of New South Wales, which hears environmental, development, building and planning disputes.
The court dismissed an appeal by Gloucester Resources, the developer of the Rocky hill project and a unit of GRL Holding Pty Ltd. The Gloucester appeal was seeking to overturn the court's decision citing the impact on a nearby town. The company said that it is right now assessing the impact of the court's decision and then it will consider its next step.
During the ruling, the judge found that the mine would be responsible for the generation of high greenhouse emissions (Ozone layer depletion substance) once it commences, and it would have a dire impact on the environment. The court's decision delighted the environmental campaigners. However, the company said that this decision could impact many industries including the construction and infrastructure industry and noted that the implications would go far beyond the mining industry.
The development of almost a dozen projects was brought to a halt after the decision, including United Wambo, which is a joint venture between Glencore and Peabody Energy, Whitehaven Coalâs Vickery extension and a proposed mine by South Korean company Kepco.
The Australian government is a significant supporter of the coal industry, and it continuously faces inundate pressure from investors and environment campaigners to halt the mining and exploration project in order to curb the harmful emission generated as a by-product of coal processing units and its severe impact on the environment.
The New South Wales province is one of the world's largest source of high-quality thermal coal with its supply extended to the utility companies in Japan, Taiwan, and South Korea, mainly due to its high-grade quality, high-efficiency and low emission.
The recent ruling by the court of Land and environment now would make it difficult for the operators in the industry to develop or expand any ongoing coal project.
In the traction of environmental issues, big investors are also putting pressure on major coal producing companies to take firmer action on climate change.
In the event of surmounted pressure from its investors, Glencore, world's top coal exporter, vowed to cap its coal production and said that it would cap the production of thermal and coking coal to about 150 million tonnes per year.
However, unlike its rival miner Rio Tinto, Glencore will not abandon coal production immediately and will continue to operate till the time forecasters expect the demand for the fuel to peak and will be in the coal business for at least another 15 years. The company also pledged to publish a new long-term target for reducing greenhouse gas emissions.
At the beginning of the year 2018, Rio Tinto (ASX:RIO) became the first big mining company to leave the coal industry.
Considering Whitehaven being among the dozens of companies affected by the recent court ruling, the stock price of the company reacted negatively on the ASX.
Whitehaven (ASX:WHC):
On 8th February the share of Whitehaven opened at A$4.880 and started trading downwards on the successive trading session post the court ruling and made a low of A$ 4.260 on 15th February.
The share price of the company opened at A$4.600 (as at 21 February 2019) and made a low of A$ 4.530, but the stock managed to close at A$ 4.580, up by 2.232% from its previous day close.
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