Extract from Hansard [COUNCIL — Wednesday, 17 May 2023]

p2359b-2360a Hon Stephen Dawson

[1]

COLLIE COAL (GRIFFIN) AGREEMENT AMENDMENT BILL 2023

Introduction and First Reading

Bill introduced, on motion by Hon Stephen Dawson (Minister for Emergency Services), and read a first time.

Second Reading

HON STEPHEN DAWSON (Mining and Pastoral — Minister for Emergency Services) [4.24 pm]: I move —

That the bill be now read a second time. The purpose of this bill is to amend the Collie Coal (Griffin) Agreement Act 1979, which I will refer to as the state agreement act, to ratify the agreement made on 4 May 2023 between the state and the Griffin Coal Mining Company Pty Ltd, being referred to as Griffin, which I will refer to as the variation agreement. This bill is necessary to amend the Collie Coal (Griffin) Agreement 1979, which I will refer to as the state agreement.

The bill will provide for a 12-month extension of the term of the state agreement, the underlying coal mining leases, and associated coal mining operations to 30 June 2024. Without this immediate extension, it is considered that the current term of the state agreement will expire on 30 June 2023. If this occurs, it is likely that Griffin’s mining operations at the Ewington mine will cease, which would have an immediate impact on coal supply. To put this variation agreement into context, I will provide background on the state agreement, Griffin, and the need to vary the state agreement.

Griffin first entered into the state agreement with the state on 5 November 1979 for the purpose of the mining and development of certain coal reserves located within the Collie basin and related matters, including rehabilitation. Griffin was placed into receivership by its secured creditors, and into liquidation by its shareholders, on 13 September 2022. One of Griffin’s parent companies is also in receivership. Griffin supplies coal under coal supply agreements to Bluewaters power station and South32’s Worsley Alumina operation. In order to ensure ongoing coal supply to these customers, a short-term extension to the state agreement is required. The government and Griffin’s receivers and managers have, through the terms of the variation agreement, agreed to a 12-month interim extension of the state agreement, with the potential for the state agreement to be extended for a further 12 months to 30 June 2025 at the Minister for State Development, Jobs and Trade’s absolute discretion. This will also provide time for the government to work with Griffin and its customers to explore options for ensuring ongoing supply of coal as required.

I now turn to summarising the key provisions of the bill and the variation agreement, which are outlined in more detail in the explanatory memorandum to this bill, which has been tabled for the consideration of members. The provisions of the bill essentially set out to amend the state agreement act to ratify the variation agreement, referred to in the bill as the “2023 Variation Agreement”, a copy of which is inserted as schedule 2 of the state agreement act.

I will now outline the key provisions of the variation agreement by reference to its impact on the clauses of the state agreement. The variation agreement inserts new clause 49 of the state agreement to allow for the term of the state agreement to be extended for 12 months, with the potential to extend for a further 12 months at Griffin’s request and the minister’s absolute discretion. The new expiry date will be 30 June 2024, or 30 June 2025, if the further extension request is approved.

New clause 21(2a) and amendments to the existing clause 21(3) of the state agreement provide for the terms of the schedule A, B and C coal mining leases to be extended for 12 months to 30 June 2024, with the potential for an additional 12-month extension to 30 June 2025 if the minister approves the further extension of the state agreement under new clause 49.

New clause 11A is added to the state agreement to deem an extension of time frames for activities authorised and obliged under existing approved proposals, including the current mine plan and measures for the protection of the environment, to 30 June 2024. New clause 11A also obliges Griffin to submit new additional proposals for approval by the minister for the financial year ending 30 June 2024 and, together with new clause 49, also effectively requires the submission of new additional proposals for the financial year ending 30 June 2025, if a further extension of the state agreement is sought and granted to 30 June 2025.

A minimalist approach to the negotiations culminating in the variation agreement was adopted. Under this approach, only amendments considered necessary for facilitating the extension of the state agreement, the underlying coal mining leases, and the associated coal mining operations were incorporated into the variation agreement. No amendments have been included that may amount to an alteration of other rights and obligations of the parties under the state agreement, on the basis that such amendments would be more appropriately negotiated as part of a longer term solution.

Ratification of this bill by Parliament will allow Griffin to continue operating to 30 June 2024, or for a further 12 months to 30 June 2025, if the minister determines this to be appropriate at the relevant time. The variation

Extract from Hansard [COUNCIL — Wednesday, 17 May 2023]

p2359b-2360a Hon Stephen Dawson

[2]

agreement also supports the government’s commitments under the Just Transition policy to manage the transition away from coal in a sensible, orderly and consultative manner to ensure that local workers, industry and communities in Collie are strongly supported.

Pursuant to standing order 126(1), I advise that this bill is not a uniform legislation bill. It does not ratify or give effect to an intergovernmental or multilateral agreement to which the government of the state is a party; nor does this bill, by reason of its subject matter, introduce a uniform scheme or uniform laws throughout the commonwealth.

I commend the bill to the house and table an explanatory memorandum.

[See paper 2116.]

Debate adjourned, pursuant to standing orders.