Alcoa World Alumina Australia's proposed $1.5 billion-plus expansion of its Wagerup alumina refinery has been granted State government environmental approval, but a decision to build is still to be made.
Alcoa World Alumina Australia's proposed $1.5 billion-plus expansion of its Wagerup alumina refinery has been granted State government environmental approval, but a decision to build is still to be made.
The company will now commence detailed engineering and design work for the project, scheduled to take around 12 months, after which Alcoa aims to move to the final phase of the project.
Initial funding forecasts put the cost of the project at $1.5 billion; however recent project cost increases across the sector have cast a shadow on that prediction. Earlier this year Alcoa suffered a 32 per cent cost blow-out to the smaller upgrade of its Pinjarra refinery - from $440 million to $580 million.
BHP Billiton has already announced that a $1.1 billion expansion of its Worsley alumina refinery has been deferred because of higher costs, after further increases in the cost of its Ravensthorpe Nickel project upgrade.
The Wagerup plan involves building a third production unit at the refinery and upgrading existing plant to improve efficiency and environmental outcomes. It would increase alumina production capacity from 2.6 million tonnes per year to 4.7 mtpa.
Both the Government and Alcoa anticipate the project will create up to 260 permanent jobs, as well as 1,500 generated during the construction phase.
Alcoa's managing director Wayne Osborn said in an announcement that the expansion, likely to provide around $17 billion in export revenue for the company, would also contribute over $11 million a year in extra revenue for the State Government.
The Wagerup refinery has proved a public relations nightmare for Alcoa for over a decade, with residents mounting significant campaigns against the company, accusing it of causing health problems in the community.
While the company adamantly maintains the plant poses no such risk, it nonetheless has agreed to maintain its Area A and B purchase schemes, and to fund a new land purchase program, allowing residents to sell their homes to the company.
The "Supplementary Property Purchase Program" will enable people living in the vicinity of the Wagerup refinery - those in the localities of Hamel, Wagerup, Yarloop and Cookernup - to sell residences and farms to Alcoa and move to another area, should they wish to do so.
To be eligible for the program, a resident would need to demonstrate that they had displayed an increased level of concern about the Wagerup Operations or its possible expansion.
The demonstration may include but is not limited to
- Having made complaints to either Alcoa or the State Government about impacts of the operations or its expansion
- Having been a member of a group who opposed the project
- Having placed their property on the open market within the last 12 months
The program will be open for six months after it is advertised in local newspapers at the end of September.
Business properties will not be eligible, although a person owning property in nearby locations other than those listed above may apply to the independent arbiter, former National Party Leader and Deputy Premier Hendy Cowan, for consideration.
The company has also committed to a series of 42 environmental conditions, as well as the funding of community health surveys and government sustainability strategies and community support programs.
A press release from the State Government is pasted below
The Western Australian Government has given the green light to another massive resources project, granting environmental approval today to Alcoa's proposed Wagerup expansion.
Premier Alan Carpenter said the approval included 42 environmental conditions, which would result in Alcoa Wagerup being the most regulated refinery in the world.
The conditions on the proposed expansion would ensure no overall increase in emissions and would require Alcoa to achieve an estimated 36 per cent reduction in total refinery odour emissions and a 12 per cent reduction in emissions of volatile organic compounds.
Mr Carpenter also announced the appointment of former National Party leader and Deputy Premier Hendy Cowan to oversee the implementation of a new land purchase program, fully funded by Alcoa, for residents in the vicinity of the Wagerup project.
The proposed expansion was expected to create up to 260 permanent jobs in the Wagerup region, with the construction phase generating 1,500 jobs.
The Premier said the approval was part of a six-point package negotiated by the State Government and agreed to by Alcoa to address environmental, economic and social concerns in Yarloop and surrounding areas.
Mr Carpenter said today's decision showed the Government was keen to secure major projects for WA but not at the expense of the environment or the health and welfare of local communities.
"The well-being of people in Yarloop and surrounds has been central to our thinking and is reflected in the six-point package," he said.
The package includes:
- 42 conditions which would see the Wagerup facility subject to the toughest and most stringent environmental requirements on a refinery anywhere in the world;
- expanded and enhanced land purchase and relocation programs to be funded by Alcoa;
- a series of Community Health Surveys over the next 20 years to be funded by Alcoa;
- intensive air quality monitoring to be funded by Alcoa and the Government;
- a new three-year, $2.6million investment in the Government's Pinjarra-Brunswick Sustainability Strategy; and
- a five-year extension of counselling services under the Government's Community Support Program.
Mr Carpenter said under the package, the State Government had secured an expanded land purchase and relocation scheme, to be funded by Alcoa, for residents living near Alcoa's Wagerup alumina refinery.
"Alcoa's existing Area A and B Purchase schemes will continue, but with a revised valuation approach which will now reflect the unaffected land values in Harvey/Waroona, rather than the lesser property values in Yarloop," he said.
"The Supplementary Property Purchase Program has been developed for residents outside Areas A & B and will enable eligible residents in Cookernup, Hamel, Waroona and Yarloop to relocate, should they wish to do so.
"The supplementary program will cover both residences and farmers in these areas and includes a Farm Business Continuation Scheme."
The Government has also required Alcoa to undertake, at its own cost, an Ambient Air Quality Monitoring Program in addition to the existing tough environmental conditions placed on the expansion proposal.
Alcoa has also agreed to fund community health surveys among residents of Cookernup, Hamel, Waroona and Yarloop. Should the expansion proceed, surveys will be conducted every five years over a 20-year period, making it one of the most extensive surveys of its kind in the world.
Environment Minister Mark McGowan said the State Government had made a genuine and concerted attempt to confront the breadth of environmental, health, social and economic issues identified by the Environmental Protection Authority.
"In making the decision to approve the expansion proposal, I have taken into account the overall Government package," Mr McGowan said.
"Conditions attached to the environmental approval deal with project design, emissions, noise, dust, water management and residue disposal.
"I have also included a condition that will require Alcoa Australia's Managing Director to sign and publish an annual statement of compliance - a first for a major project in WA.
"This will help ensure transparency and accountability, a prerequisite for restoring community confidence."
The proposed expansion of Alcoa's Wagerup alumina refinery will see production increase from 2.5million tonnes per annum (Mtpa) to 4.7Mtpa.
