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An interesting news story hit the major outlets recently about a major mining company potentially having the desire to build a mine in  a small town and the town’s council asking for $100million in return for the approval to do so. (read one of the many versions of the news story here)

What’s Your Initial Reaction?

Our first thoughts while reading the story was, ‘What a greedy town’, followed by ‘who is actually getting all the money?’

You see, the town has a population of less than 400 people. If the town is so small – why do they need all that money? It initially looks like  a cash grab to get their share of the mining profits, but the further you look into it the more you realise that not only are mines expensive for the mining company (to set up and run) – but the costs to the communities (no matter how small) is also quite high.

Where Would the $100 Million Go?

Broken down to a ‘per capita’ amount based on the towns population you are looking at about $250,000 per persons, but obviously that is not where the money is going. The council sees that money as necessary to cover infrastructure costs, such as:

  • An Airport (to transport workers in and out of the town)
  • Roads
  • General Utilities Upgrades (Water, Electricity and Sewer)

If you have seen one of the many road works upgrade signs around the country, you will know that road works is quite expensive – as are all of the other costs associated with having a billion dollar mine in town.

2,000 Jobs on the Line?

Now Xstrata (the company looking at building this massive coal mine) has said that there would be over 2,000 jobs created (including construction and operating) through this mine project, and the projected lifespan of this mine is 30 years.

It’s an interesting situation, because the mine would create a massive boost to the areas economy, obviously Xstrata see the value in the project as it is being touted as possibly becoming Australia largest coal mine.

If the project gets all it’s approvals, then you would have to think that a deal will be made to get the councils approval as well – but we will have to wait and see.

The Positive Takeaway?

The main thing to take from this news is that obviously the mining boom isn’t dead, and that we could see several thousand more mining and construction jobs be created just 5 hours from Brisbane.

For more information on the mine project visit: WandoanCoal.com.au.






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