Western Australian Fund May Cover Ellendale Clean-up Bill
July 05, 15
(IDEX Online News) – The Western Australian state government’s Mining Rehabilitation Fund (MRF) could be forced to cover the estimated A$30 million ($22.55 million) environmental clean-up of the Ellendale diamond mine after Kimberley Diamonds Ltd. (KDL) suspend operations at the mine. KDL placed its subsidiary Kimberley Diamond Company Pty Ltd, which operated the mine, into voluntary administration.
According to a report in The Western Australian newspaper, sources suggest KDL owes trade creditors as much as $10 million, plus accrued entitlements for its workers, an increase of almost $7 million since the release of the company’s June 30, 2014 annual report.
Following the KDL’s decision to shut Ellendale has thrown the company’s ability to meet rehabilitation costs for the mine into doubt.
Media reports suggest that KDL will transfer the liability for rehabilitating the mine to the MRF.
Its last annual report shows it has an estimated $28.5 million in rehabilitation liabilities. It is unclear whether money has been set aside to meet ongoing rehabilitation obligations at Ellendale.
According to The Western Australian, Department of Mines and Petroleum executive director environment Phil Gorey said the liability would transfer to new owners if Ellendale was sold.