Toro foiled by uranium mine approval delay
Market expectations of a swift approval for Toro's Wiluna mine proposal were dashed late on Tuesday when the federal Environment Minister, Tony Burke, sought an extension of time to make his decision.
While not a rejection, it is the second time Mr Burke has sought an extension, with the deadline of December 18 now pushed out to March 31, 2013.
The delays at federal level come despite Western Australian regulators giving their blessing on October 10 to an approval process that was supposed to be run bilaterally between state and federal governments.
The saga comes just weeks after the Gillard government backed away from a pledge to streamline approvals for big projects by creating a single process run by the states.
The managing director of Toro, Greg Hall, could barely contain his frustration, saying he was "very surprised and extremely disappointed" by this further delay.
"There will be a gap of up to six months between the decisions of the two jurisdictions, when the bilateral agreement was meant to ensure a harmonisation of the process," he said. "Toro was advised by the minister's office and department on more than one occasion that it required no further information from Toro."
Mr Hall said it was not yet clear what extra information was being sought by Mr Burke. "We need to clarify that ... once we find that out we will know for sure."
Shares in Toro began to rise mid-session on Tuesday when Mr Burke gave his approval to another environmentally contentious project in Tasmania.
But they slumped by almost 9 per cent to 11¢ shortly before the close of trading, and could face more pressure when trading resumes on Wednesday morning.
But while the company and the market may not have expected a further delay for the Wiluna mine, environment groups had been confidently predicting for some time that Toro had not done enough to satisfy the approval conditions.
A recent consultant's report commissioned by the Conservation Council of Western Australia predicted that certain measures around storage of tailings were not adequate to meet federal approval.
Council spokeswoman Mia Pepper said Mr Burke's decision to seek more information was prudent and responsible. "The Toro project is ill-conceived," she said.
Australian Conservation Foundation spokesman Dave Sweeney said Toro was a small company that would struggle to raise the funds needed to get the Wiluna project off the ground.
Mr Hall had been due to hand over the managing director's role to Dr Vanessa Guthrie on February 8, and the delay means he may depart that role without seeing Wiluna approved.
Frequently Asked Questions about this Article…
Federal Environment Minister Tony Burke sought an extension of time to decide on Toro Energy's Wiluna uranium mine, pushing the deadline from December 18 to March 31, 2013. This was the second extension the minister requested, so the project did not receive final approval by the expected date.
Toro shares rose mid-session when the minister approved another project in Tasmania, but by the close of trading they slumped by almost 9% to around 11 cents, and the article said they could face more pressure when trading resumed.
Yes. Western Australian regulators gave their blessing on October 10 to an approval process that had been intended to run bilaterally between the state and federal governments, but the federal decision was still delayed.
The bilateral agreement was meant to harmonise the approval process between state and federal levels. Toro's managing director warned the delay could create a gap of up to six months between the two jurisdictions' decisions, undermining that harmonisation.
Environmental groups and a consultant's report commissioned by the Conservation Council of Western Australia predicted that certain measures around storage of tailings were not adequate to meet federal approval, raising concerns about the project's environmental readiness.
The Conservation Council spokeswoman Mia Pepper called the Toro project 'ill-conceived' and described the minister's request for more information as prudent. The Australian Conservation Foundation spokesman Dave Sweeney said Toro was a small company that might struggle to raise the funds needed to get the Wiluna project off the ground.
Managing director Greg Hall said he was 'very surprised and extremely disappointed' by the further delay and noted uncertainty about what extra information was being sought. The delay could mean Mr Hall leaves the managing director role without seeing Wiluna approved; he had been due to hand over to Dr Vanessa Guthrie on February 8.
Based on the article, investors should watch regulatory and timing risk (federal approval delays), potential share price volatility (recent intraday rises and an almost 9% slump), environmental concerns such as tailings storage flagged by consultants and groups, and funding risk since observers questioned whether Toro, as a small company, could raise the capital needed to develop Wiluna.
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