Alcoa wins 50-year brown coal bonus

US AMUMINIUM manufacturer Alcoa has secured a 50-year licence to operate a brown coal mine crucial to a smelter at Point Henry in Victoria without any requirement to reduce the emission of greenhouse gases or pay more in state royalties.

The deal was included in legislation tabled in state Parliament on Tuesday. The mine feeds a power station which provides about 40 per cent of the smelter’s power, reports The Australian Financial Review.

Alcoa will be able to substantially increase the size of its mining operation from 419 hectares to 665 hectares. The new licence introduces some conditions on the use of the mine, including bringing it under the auspices of Victoria’s Mineral Resources Act, but does not place any restrictions on the emissions from the operation or alter the royalties for mining the coal.

The power station has an estimated carbon intensity of about 1.2 tonnes of carbon emitted per megawatt hour of production.

Victoria’s Energy and Resources Minister, Michael O’Brien, said the agreement related only to the mining operations so could not consider the carbon emissions from the power station. “That issue isn’t covered by the agreement,” he said.

Under the federal government’s carbon pricing proposals, Alcoa will receive 94.5 per cent of the carbon permits it needs at no cost.

Mr O’Brien emphasised that the expanded mine took up less than 10 per cent of the total 7145 hectare lease area and the remainder would be managed as a national park.

Victorian Greens leader Greg Barber said the deal showed that the government, which has announced a review of the state’s legislated emissions reduction target, was not ­committed to tackling climate change.

“This is an ecosystem that contains animals and plants that exist nowhere else on Earth,” he said.

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