Green light for Xstrata coalmine

The Wandoan project was challenged by Friends of the Earth, mainly on the grounds that it would be responsible for 1.3 billion tonnes of greenhouse gas emissions over its lifetime - equal to twice Australia's annual emissions - and displace agricultural land.

In a decision handed down yesterday, the president of the Land Court, Carmel MacDonald, recommended approval of the project, subject to groundwater monitoring and excision of some land from the lease, but found the state's environment protection laws were "limited to Queensland's environment".

"The court can only be concerned with the global impacts of the 'mining activities' which are the subject of the environmental authority application before the court - that is, the physical activities of winning and extracting the coal that may be authorised. Activities which may be carried on under the authority of a mining lease ... do not extend to the transportation and burning of the coal in power stations.

"Most of the evidence led by the FoE centred on GHG emissions from the use of the coal in power stations. In my view, this evidence is irrelevant to the court's task."

A Friends of the Earth spokesperson said it would consider an appeal. Xstrata Coal's Queensland chief operating officer, Reinhold Schmidt, said the decision recognised the company's "ongoing commitment to environmental management and our willingness to listen to and accommodate individual landholder needs".

If approved by Queensland's new mining minister, Wandoan will be Xstrata's biggest Australian project. In the first stage Xstrata envisages spending $7 billion to develop an operation extracting 22 million tonnes a year, with potential to expand to 100 million tonnes a year over a mine life of more than 30 years.

Xstrata owns 75 per cent of Wandoan, with the remainder split between its partners Itochu and Sumitomo. It has hired Macquarie Capital to sell a 20 per cent stake to a third partner. Xstrata is the subject of a $US9 billion ($8.5 billion) friendly merger proposed by Glencore.

In a speech this month, the chief executive of Xstrata Coal, Peter Freyberg, criticised green groups funding an anti-coal campaign that included proposed litigation to stop new coalmine developments.

"Tying Australia's legal system up with numerous cases with the intention of delaying coal projects rather than a bona fide legal complaint is an abuse of our judiciary and a waste of taxpayers' money, for a cause that will cost Australia jobs, tax revenues and the many benefits the coalmining industry brings to rural communities and the nation as a whole," he said.