Xstrata wins approval for Australia's biggest coal mine

PERTH Tue Mar 27, 2012 1:32pm BST

A logo of the Swiss mining company Xstrata is pictured at its headquaters in Zug, February 6, 2012. REUTERS/Romina Amato

A logo of the Swiss mining company Xstrata is pictured at its headquaters in Zug, February 6, 2012.

Credit: Reuters/Romina Amato

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PERTH (Reuters) - An Australian court ruled in favour of global miner Xstrata XTA.L on Tuesday in a case which sought to halt the company's plans to build the country's largest coal mine on the grounds that it would contribute to climate change.

The objection against the A$6 billion (3.9 billion pounds) Wandoan mine was filed by environmental group Friends of the Earth and landowners, and comes amid increasing resistance to Australia's coal industry from green campaigners.

The Land Court of Queensland said climate change on its own was not a good enough reason to justify refusing Xstrata a mining lease and that the economic benefits of the mine should also be taken into account.

Australia is the world's largest coal exporter and the commodity is also one of the country's top export earners. The industry currently has around A$70 billion worth of mining and infrastructure projects in the pipeline, and accounts for A$43 billion of exports, according to the Australian Coal Association.

The case against the 22 million tonne per year open-cut Wandoan coal mine is the first to use climate change as the primary argument against the development of a mine, according to Friends of the Earth.

Xstrata argued in the case that stopping the Wandoan coal project would not affect the total amount of greenhouse gas in the atmosphere, since the coal that it would have produced by Wandoan would be replaced by coal produced elsewhere.

The Land Court agreed, saying in its ruling, "It is difficult to see from the evidence that this project will cause any relevant impact on the environment."

Friends of the Earth spokesman Bradley Smith said the group is examining options for appealing the case.

"We'll do everything we can to stop this mine from going ahead," Smith said.

Xstrata said it will move towards a final investment decision on the project pending final government approvals.

"The Land Court's recommendation acknowledges Xstrata Coal has followed a thorough and rigorous environmental assessment," Xstrata Coal Queensland's chief operating officer, Reinhold Schmidt, said.

(Reporting by Rebekah Kebede; Editing by Mike Nesbit)

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