Ann: Quarterly Activities and Cashflow Report 30 September 2019, page-59

Good morning.



If your wondering about the lack of MMP, there are many factors at play.

So much angst up there ^^ about the MMP. It sounds like the magic pudding.

CXO are one the first new mines to be subject to the new NT Water Act, and new Environment laws too I believe. There might even be some new Climate Change policy afoot to I believe.

Coming into an election year, and likely to get slaughtered over fracking, you can be sure that the Gunner government will doing everything they can to make sure that this MPP, and all of it's sundry approvals like water is 'rock solid' and beyond reproach.

Territory Labor don't want to f* this one up, and there is a huge electorate just outside Darwin called the rural area. These are the communities that are running out of water in their aquifers. Berry Springs stop flowing this year.

Awareness of this project is very high around Darwin, and the top end. Any notion that CXO had they could quietly kick this off as a minor quarrying operation as they described in their NOI has long gone.

I have commented previously about the hydrogeological challenges this project presents.
The first OHD which has bugger all water in it.
The second is the produce water dam they want to build over spring fed floodplains. These floodplains drain straight into Darwin Harbour.
The third is the Discharge license they will need to discharge mining waste water into West Arm mangroves of Darwin Harbour.

Thankfully the NT water department and the natural resources department are not as flaccid as NT EPA when it comes to waving around rubber stamps. Thats because they are all into science and stuff. Their decision making is not based on the same political expediency that typifies that of the NT EPA.

There are some social and business issues at play here too, which Territory Labor would very aware of in an election year.

The company has little to no capital and is already selling off the royalties.
They have a x.x% foreign ownership.
The plant will be BOO from WA.
The logistics will be interstate too from QLD.
Mining operations will be interstate from SA.
CXO still do not even have an office in the NT.

You can smell the putridity of the FIFO from here.

Paul Kirby (The Minister) is a proud union man who is also keen on mining.

However the NTG don't have much "jobs and growth" mantra to attach to this project. None in fact.

And this is one area where IMHO, CXO have shot themselves in the foot. All the benefits/profits are going "down south" to contractors, along with their FIFO staff.

FIFO is a dirty word in all remote mining based economies, and more so in Darwin after the INPEX fiasco.

Another area where CXO has failed miserably is in the community consultation. They promised 10 traineeships whatever to the local Indigenous community at Belyuen, yet they never engage with the NLC's Kenbi rangers who are the land managers right next door pretty much.

You might find that CXO does not have a good reputation with NLC. Sure NLC is not directly involved with the project, but hey Darwin is a very small town politically.

Yet another area where CXO are not making much sense to voters, is the idea that somehow they are being 'green' (the lithium myth) when the company has decided to entirely run the operation on diesel. The climate catastrophe is real, and its problem that is not going away. This lithium will only makes things worse, not better.

CXO have not done well in the garnering of social license in surrounding communities. Apart from a few punters thinking they might get a job, there is little support around the Darwin rural area, let alone those on Kenbi country or Mandorah. The Territory Labor government know this.

And given the potential downsides of little or bond money currently visible from CXO, and the potential for serious water issues going forward, one cannot blame the current NTG for applying the precautionary principle to approving this project too quickly.

Those water issues range from no water, to that produce dam floodplain being under 1.5 meters of water. If there is no rain for OHD, then what? If we get a monster wet season and that causeway in the image above is under 1 meter of water then what?

It was the previous Labor government that fell over itself to approve and fast track the disaster known as CMR.

CMR were very clever, they got that Labor government to install a 22KVA power line for 16kms and a new substation. Paid for by the NT taxpayer.

Interestingly the Environment Minister of the day, Marion Scrymgour, who gave the final approval for the mine, is now heading the NLC. Marion is on record somewhere I believe stating the granting of permission to CMR was one of the bad decisions she made in office. It's a small town. The Territory Labor government knows this.

Anyhow the granting of a MMP is a Ministerial decision, that is arrived in consultation with other Ministers, and of course the rest of the party executive. That decision is his or hers to make, when and how they see fit.

The Minister (and executive) can also attach any extra conditions they see fit. And then they have a swathe of fresh new legislation to be considered. This legislation must be seen to be working effectively to protect water and the environment if Territory Labor are to have a chance in the election.
The Territory Labor government knows this.

I would not be surprised if Territory Labor even waits until after the next election, which will be August 20, 2020.

One thing is certain. The bad old days of Rafferty's Rules in the NT mining industry are hopefully now long gone. The notion that southern rent seekers can run smash and grab plunder raids on the NT wealth and environment is also hopefully finished. The days where cheap mining proposals leave intergenerational environmental consequences can never be allowed again. Systems that allow unethical mining operations to go decades without paying royalties will not tolerated by the people of the NT anymore.
The Territory Labor government knows this.

I for one welcome the government's determination to not kowtow to a few very well payed, accountants, lawyers and geologists from Adelaide.

I welcome the determination of the NTG to undertake real due diligence on this proposal and not be rushed into any decision.

And I hope you will see it that way as well. They are doing the due diligence required.

The longer they take to properly assess and possibly approve/not approve this proposal, the better it is for investors and everyone concerned. The more conditions they impose on the company and the project the better it is for everybody, yourselves included.

The last thing Territory Labor want is another CMR debacle. They lost a lot of political capital backing those jokers. The NT lost a lot of credit in China after what happened to Hunan Metals.

And even though the mine is in C&M, it is still polluting, still sucking more money for rehabilitation, and still Territory Labor's approval all over it.

Namaste