Hazelwood costs explode
The decommissioning, remediation and rehabilitation of the Hazelwood power station site will cost at least $743 million.
The figure is a significant expansion on the amount Heywood owner Engie estimated it would cost during the Hazelwood mine fire inquiry in 2015.
Engie plans to close the Morwell power station and mine on March 31, but will then spend $439 million rehabilitating the site, with another estimated $324 set aside to cover redundancy costs and the settlement of leave entitlements.
“The work will take place over multiple years and may lead to variations in-future expenditure expectations,” an Engie spokesperson on Friday.
“As Hazelwood is the first mine in Australia of this type and size to be rehabilitated, specialist external consultants will continue to be required.
“[They will] advise on geotechnical, environmental and hydrogeological matters to allow for the development of the most appropriate methodology for a safe, stable and sustainable site after closure.”
Engie had earlier estimated the costs of the mine's rehabilitation to be $73 million.
Victoria's Industry, Employment and Resources Minister Wade Noonan said the State Government is working on its own estimation of the cost
“An important outcome of the Hazelwood mine fire inquiry was in two parts; firstly that the state's bond was inadequate and under the Andrews Government we have lifted the bond significantly,” Mr Noonan said.
“The other matter that we have committed to is to do our own independent assessment of the rehabilitation costs.
“Rather than rely on what a mining operator might assess themselves, the Victorian Government is doing our own independent assessment.”
Mr Noonan expects the assessment to be finalised by April.
“That will obviously inform our decision to increase the size of the bond potentially in order to protect the interests of the state,” he said.
“The company has said very publicly that it will meet their rehabilitation obligations.
“That is important for the community to understand, and it's obviously a very important assurance to government and Victoria's interests.”
Environment Victoria campaigns manager Dr Nicholas Aberle said it was concerning how much the original cost estimate had blown out.
“This is a remarkable increase, this is really quite staggering,” he told the ABC.
“I think what this demonstrates is that we really don't understand yet, or have experience of rehabilitating a mine of this size.
“For that reason I think we have been inclined to choose these wildly unrealistic underestimates of what it will cost.
“This is probably likely to be the case at Loy Yang and Yallourn as well, who are saying that their costs are $70 million or $100 million.”