Key Findings
IEEFA recommends that Western Australian policy makers reject any request to provide additional subsidies to support Griffin Coal.
The evident structural decline of the coal industry highlights the need for long term national and state level energy plans, and an associated plan to support local communities transition towards industries of the future.
West Australian taxpayers could well end up with yet another significant unfunded mine remediation liability of well over $20m.
Executive Summary
The acquisition of Griffin Coal by Lanco Infratech at the peak of the coal boom is at serious risk of becoming a stranded investment with potential negative impacts on investors, Western Australian taxpayers and the local community of Collie.
Analysis by IEEFA of Lanco Infratech’s financial position indicates that Lanco Infratech’s local subsidiary, Lanco Resources Australia Pty Ltd. faces a likelihood of insolvency in early 2015.
Requests for public subsidies to prop up the business are unlikely to have a material impact on the underlying financials of the business and should be resisted by policymakers.
The imminent failure of Lanco Infratech’s Griffin Coal business points to an increasingly urgent need for Federal and State Government planning to prepare for the economic and social impacts of the structural decline of coal.
Please view full report PDF for references and sources.
Press release: Report – Stranded Out West: The Imminent Failure of Lanco Infratech’s Investment In Griffin Coal
