Warkworth Continuation Project

by Rod Campbell and Richard Denniss

The Mount Thorley-Warkworth mine complex is a large open cut coal mine operation near Singleton, in the Hunter Valley, NSW, owned by multinational mining giant, Rio Tinto. The mine achieved notoriety in April 2013 when the NSW Land and Environment Court ruled that it should not be approved as the benefits of the project did not outweigh its social and environmental costs. This ruling was upheld on appeal by the NSW Supreme Court.

In late 2013, the NSW Government changed legislation to allow Rio Tinto to resubmit an application for largely the same project. The Environmental Impact Statement for this resubmission was released in July 2014 and The Australia Institute has made a submission on the economic assessment of the project. Key points:

  • The economic assessment ignores the financially marginal nature of the project.
  • An unorthodox approach to labour markets has been adopted, not based on official statistics, but on lobby group data. This approach serves to overstate the value of the project by over $600 million.
  • The economic assessment understates social and environmental costs by assuming that mitigation measures and offset measures work perfectly.
  • Inappropriate modelling is used to estimate indirect effects of the project. 

Full report