Roger Cook says the funding will deliver certainty, but critics say its an admission of failure and rubber stamps the closure of Griffin Coal and Bluewaters power station in 2026.
The state government has pledged to continue paying operating subsidies to embattled miner Griffin Coal until June 2026 to address the risk of “sudden mine closure”.
Premier Roger Cook visited Collie today to announce the funding commitment, which is on top of $39 million it has already paid to Griffin since January.
Mr Cook pushed responsibility for the problems at Collie onto the private sector.
“It is disappointing that the private companies involved in Griffin have been unable to find a commercial solution to their problems, despite significant support from government,” he said.
“But a sudden closure of the Griffin mine would see hundreds of workers lose their jobs overnight and put at risk the stability of our electricity system.
“Put simply, I won’t let that happen.”
Mr Cook claimed the funding announcement would deliver certainty for the mine workforce, industry and the community for the next two and a half years, and allow time to prepare for a potential mine closure.
Today’s announcement comes after years of commercial negotiations to try and put the coal sector on a more secure footing.
One of the big sticking points is that increased payments to the coalminers would flow through to higher electricity costs for households and industry.
The government’s pledge to close all state-owned coal power stations by 2030 has added to uncertainty for the sector.
That pledge was made despite coal power stations – run by state-owned Synergy and private company Bluewaters - accounting for 30 per cent of Western Australia’s electricity supplies.
They have been losing money for years and Griffin has debts of about $1.5 billion.
The Mining and Energy Union (MEU) and Australian Manufacturing Workers Union (AMWU) said it was extremely disappointing the government was doing the minimum possible to keep Griffin Coal afloat until 2026.
MEU WA secretary Greg Busson said that in a difficult situation, the government had taken the easiest and cheapest option, but it was a flawed approach.
“This funding arrangement rubber stamps the closure of Griffin, along with Bluewaters Power which it supplies, when funding runs out in 2026,” he said.
The two unions said today they had presented the government with a detailed proposal for private sector-led transition trust to be established to take ownership of Griffin and potentially other energy facilities in Collie.
AMWU secretary Steve McCartney urged the premier to keep the transition trust option on the table.
“Workers and the community in Collie have been promised a just transition as we move to renewables, but we need more investment, courage and imagination to make that a reality,” Mr McCartney said.
“This decision flies in the face of what Collie’s just transition is all about.
“After multiple reviews by expensive consultants, the best plan the government can come up with is to tip more taxpayer money down the black hole at Griffin Coal.
“It’s a challenging situation at Griffin, but this is a short-sighted and extremely disappointing response.”
Shadow energy minister Steve Thomas says the announcement was an admission of failure.
“The government’s management of the coalfields is an unmitigated disaster that has let down the town of Collie, the energy system in this state, and the entire WA community,” Mr Thomas said.
“They have spent $100 million to import coal from NSW that wasn’t needed, and they have struggled to use. They have spent millions more on consultants that have come up with zero answers to the problem, and they will spend a quarter of a billion dollars in handouts to a foreign owned, insolvent company.
“It’s a dreadful record. I fear for the future of Collie.
“And when the free taxpayer cash runs out in mid-2026 we will be in exactly the same dilemma, having simply kicked the can down the road without a single real solution being provided.”
The government’s payments are designed to cover operating losses at the Griffin mine and ensure it can continue delivering coal to its customers, namely Bluewaters Power and South32 subsidiary Worsley Alumina.
The subsidy payments are made via Deloitte, which took control of Griffin after the miner was put into receivership in September last year.
Bluewaters delivers more than 15 per cent of WA’s electricity supply and buys around two-thirds of Griffin’s output.