Glencore's bauxite mine uncertain

Glencore's stock price plunge makes FNQ bauxite mine uncertain



Broadcast: 30/09/2015

Reporter: David Lewis

A plunge in the share price of one of the world's biggest mining companies, Glencore, has cast doubt over the future of a controversial bauxite mine proposal in remote far north Queensland.

Transcript

LEIGH SALES, PRESENTER: This week the stock price of one of the biggest mining companies in the world tumbled spectacularly.

Shares in Glencore fell 30 per cent on Monday amid fears the resources giant has taken on too much debt.

Investors are clearly spooked, but the reaction was very different in the remote far North Queensland community of Aurukun.

Native title holders there have been fighting a Glencore proposal to mine bauxite on their land and the future of that project is now uncertain.

David Lewis reports.

DAVID LEWIS, REPORTER: Glencore is a giant of the resources industry. The Swiss-based company controls the majority of the world's zinc and copper and has dozens of mines in Australia. But this week it took an almighty hit on the stock market.

JOURNALIST: When is the brown stuff gonna hit the fan, do you think?

NEWSREADER: Commodity trading and mining company Glencore getting hammered on Monday, falling almost 30 per cent.

COMMENTATOR: The writing off of value across energy and resources is enormous.

NEWSREADER: This is a massive, massive story."

DAVID LEWIS: The remote Indigenous community of Aurukun in Far North Queensland seems a world away from the turmoil on global financial markets. But many native title holders here will be watching on with great interest. They've been fighting to stop Glencore moving onto their land.

LAVINIA AHLERS, TRADITIONAL OWNERS' SPOKESWOMAN: We don't want them sort of mining companies coming into our town and destroying our land and polluting our air and taking away our livelihood.

DAVID LEWIS: Aurukun is home to a rich deposit of bauxite, used to make aluminium. Glencore has applied to mine more than six million tonnes of the resource each year.

GINA CASTELAIN, TRADITIONAL OWNERS' SPOKESWOMAN: We have been sidelined as traditional owners. We have been left with no voice as traditional owners.

DAVID LEWIS: It's not Glencore's finances that worries the traditional owners, but rather the company's track record on environmental management. Earlier this month a group representing native title holders flew three hours to Borroloola in the Northern Territory to investigate.

GINA CASTELAIN: We had some letters and emails come through from the Borroloola people inviting us to talk to them about their experiences.

DAVID LEWIS: Glencore's McArthur River Mine in the NT is one of the world's largest producers of lead and zinc, but the mine's vast open cut pit forced the diversion of the McArthur River, which is the lifeblood of Borroloola's four Indigenous clan groups.

ASMAN RORY, GUDANJI GARAWA TRADITIONAL OWNER: We've been living off this river for that long, it's not even funny, you know. That's where I get sorta really, really - really emotional about it because - 'cause I feel it. I feel what's happening in this river here.

DAVID LEWIS: Asman Rory claims leaking dams and toxic plumes from the mine are polluting the water and contaminating fish.

The Borroloola elders showed the Queensland traditional owners Surprise Creek, once a popular fishing spot.

KEITH RORY, GARAWA TRADITIONAL OWNER: It used to be a good hunting place and fishing place, but it's terrible now.

DAVID LEWIS: Glencore strongly denies any link between lead levels in fish and the mine, but the Queensland traditional owners are convinced.

LAVINIA AHLERS: What Glencore has done to these people and their country is really heartbreaking for us to see.

DAVID LEWIS: For the traditional owners from Queensland, this trip has simply confirmed their suspicions about Glencore and the effect its operations are having on the environment. They'll now return home armed with the stories they've heard here in Borroloola to ramp up community opposition to the mining giant's bauxite mining proposal.

But after a horror week for Glencore, one industry analyst predicts the project will be shelved for now.

DAVID LENNOX, ANALYST, FAT PROPHETS: At the moment it's got probably bigger problems inside its balance sheet and that may in fact see that project put onto the backburner, or for the time being, perhaps cancelled.

DAVID LEWIS: If it is cancelled, another company will be waiting in the wings.

Aurukun Bauxite Development, or ABD, had been competing with Glencore to mine the deposit and even secured the support of the group representing native title holders after signing a historic land use agreement.

GINA CASTELAIN: We're not against mining, but it needs to be on our terms, you know? And government need to understand that the native title holders, the registered native title owners of the land need to be involved in those decisions.

DAVID LEWIS: The Queensland Government knocked back ABD's bid, arguing the company did not have the necessary finance or experience to get the mine up and running quickly.

Glencore was considered the safe bet, but that was before this week's share price plunge.

DAVID LENNOX: When things do settle down and Glencore does get its balance sheet certainly into order, then we will probably see them come back and revisit this particular little project at some point in the future. At the moment, it's not a very big project in their gun sights, so it will remain, we think, on the backburner.

DAVID LEWIS: Glencore declined an interview, but told 7.30 it's still assessing the feasibility of the project, a process that could take years.

The Indigenous leaders in Aurukun are not taking any chances. They've launched a High Court challenge on behalf of the Wik and Wik Way people to stop the mine from going ahead.

LAVINIA AHLERS: We want our children to have a future, we want our children to have land where they can go back generation after generation after generation and hunt off that land and live off that land and learn the traditional ways of that land.

LEIGH SALES: David Lewis reporting.