Waratah Coal falls 66% after government rejects Australian project
08-SEP-2008 Intellasia | The Canadian Press
Sep 8, 2008 - 7:00:00 AM
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Waratah Coal (TSXV:WCI) stock fell 66% after Australia's federal environment minister rejected its proposal for a mine, rail and port development in central Queensland.
Shares in Waratah, an Australian miner which trades on the TSX Venture Exchange, fell to 62 cents, a drop of US$1.22 or 66.3%, after Environment minister Peter Garrett rejected the A$5.3 billion proposal.
He said the project would have unacceptable environmental impacts on the Shoalwater Bay area.
The stock, which has a 52-week high of US$4.25, fell to a new low of 40 cents earlier in the day.
"Waratah considers that the minister for Environment has exceeded his authority in dealing with Waratah's proposal in the manner he has and believes the decision is wrong in law, and not in the national interest," said CEO Peter Lynch.
"Waratah does not believe that the proposal has been properly considered or its impacts properly assessed."
The company plans to launch an immediate challenge to the decision in the Federal Court of Australia, he said.
The a coal mine project, worth about US$C5.2 billion, in the Galilee Basin, would be linked by a new 495 kilometre rail line that would carry the coal for export to thermal power plants in China, India and Southeast Asia.
Waratah Coal expects the project will create more than 2,000 jobs during construction and 700 permanent positions.
In July, the Queensland government declared the project one of "state significance, the company said, adding it would have potentially generated over A$10 billion of export revenue and over A$900 million royalties per year for Queensland.
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