Update
9 October 2012
Holding Redlich
In The News
Price falls hit miner’s carbon offset plans
Publication: Australian Financial Review
Date:
9 October 2012
Page no: 44
Author(s):
Matthew Cranston Publisher: Fairfax Media Publications Pty Ltd
Coal miners are delaying their purchasing decisions for environmental offset land in Queensland as projects are put on hold
because of falling coal prices. Uncertainty over the state’s regulatory framework for offsets, due to be released in December, is
also weighing on decisions.
Several mining companies have been seeking to secure conservation land to offset the environmental impact of their mining
projects under federal and state laws.
GVK and Hancock’s Alpha coal project was approved by the federal government on the basis that GVK buys offset land up to
eight times the size of land used for its mine and rail corridor.
Holding Redlich partner Brian Healey said the new regulatory regime was a “steep learning curve for everyone” and had stalled
decisions, but it was falls in commodity prices that posed the biggest problem.
“It is conceivable that if commodity prices continue to fall, resulting in some resource projects being shelved, the demand for
environmental offsets might well wane,” Mr Healey said.
“In our view, commodity prices are likely to be a bigger driver just now than any suggestion that offset requirements could be
increased.”
Mr Healey added that if demand did start to build again, resources companies would face challenges because of the relative
scarcity of suitable offset land.
Colliers International’s Rawdon Briggs is selling Dukes Plain, a 7900 hectare offset property near Theodore, midway between the
gas fields of south-east Queensland and the Gladstone port.
Depending on demand the property could sell for up to $10 million.
“It is disappointing to see the clear pull-back in demand for environmental offsets in Queensland,” Mr Briggs said. “However, coal
seam gas companies are proceeding to offers and engaging in ecological assessment.”
Earthtrade managing director Alan Key said there had been challenges negotiating suitable agreements between landowners
and project proponents, mainly because of the complexity of the regulation. However, he said resource proponents needed to
persevere.
“The requirement to offset is not going to go away under either government,” Mr Key said.
KEY POINTS Miners buy conservation land to comply with offset regulations. But commodity price falls may delay or extinguish
some projects. Property prices might be affected.