THE South Korean energy company that spent a decade trying to start a coal mine in Bylong Valley has written off the project and nearly 700 million Australian dollars.
KEPCO's board marked down the value of its Bylong mining rights from $Aus642 million to zero in a report to the South Korean stock exchange in early January, despite the Australian arm of the company seeking a judicial review against the coal mine's refusal in September.
The South Korean state-owned company has also marked down the value of the 13,000 hectares of Bylong Valley land it owns between Denman and Mudgee by $45 million, after paying $115 million for properties since 2010, when it paid more than $400 million for the mining licence.
Analyst Tim Buckley, from the Institute for Energy Economics and Financial Analysis, said the write-off "doesn't mean that KEPCO has walked away, but it clears the deck should they formally decide to walk".
The announcement was a "terrible outcome for the valley" after years of upheaval and trauma ending with the mine's refusal in September, said NSW Greens MP David Shoebridge.
He said the NSW Government needed to "step up and call on KEPCO to surrender the mining licence" because "a dead fossil fuel project is effectively sterilising the region".
"No one is willing to invest in environmental restoration or farm infrastructure while there is constant threat of it all being wiped off the map by a coal mine," Mr Shoebridge said.
"We have seen this before with hopelessly compromised projects, like the proposed Tallowa Dam, causing entire towns and regions to suffer economic decline.
"A responsible government would request KEPCO surrender the mining licence if it had the best interests of the Bylong Valley at heart."
Mr Buckley said KEPCO documents showed the parent company made a net loss of $Aus1.158 billion in the nine months before September, when the NSW Independent Planning Commission rejected the Bylong coal mine proposal, in part because its greenhouse gas impacts would leave future generations paying the price for contemporary benefits.
KEPCO's total debts were more than their total equity value, which is "not a great position to go investing in yet more stranded assets", Mr Buckley said.
"That is particularly at a time when the South Korean Government is re-prioritising its energy policy away from coal towards renewables and liquefied natural gas on rising pollution pressures," he said.
KEPCO planned to run an open cut and underground mine complex for 25 years and mine up to 6.5 million tonnes of coal per year for use in the domestic Korean energy market.
But its final assessment in NSW coincided with a strong shift away from coal and towards renewables by the South Korean Government since 2017.
Mr Buckley said the decision to write-off the project did not lead to the sacking or resignation of KEPCO's chief executive officer, as would generally be the case in countries like Australia.
"Normally the management gets sacked but this is South Korea. Is it just sitting there in limbo? It's hard to say but KEPCO has bigger problems than what to do with Bylong. This company has massive problems. They're losing money with every unit of electricity they produce," Mr Buckley said.
"It's 50-70 per cent probable the project's dead. When the board agrees to write a project off, they've given up on it. But this is South Korea.
"If someone came along and offered to buy it from them they'd probably jump for joy. Should the NSW Government get involved? A sensible government would, but we know we don't have that.
"The land just sits there quietly festering away. Now it's not even festering away on the balance books."
Bylong Angus bull and stock feed farmer Peter Grieve, who has had property at the southern end of Bylong Valley since 1963, said the latest KEPCO move was typical of what locals had experienced since the company bought the mining licence from Anglo American in 2010.
"My life's been buggered round for seven years because they wanted a 700-acre part of my property. I would think the sensible thing to do now is for them to sell the properties on an individual basis. There'd certainly be people interested, but the place looks like hell. There's not even security there now," Mr Grieve said.
"It's the uncertainty of not knowing where you're going that's been the worst of it."
In one of its final submissions before a decision on the controversial mine proposal KEPCO alleged the NSW Government and Department of Planning "encouraged" the controversial $115 million land buy-up to reduce dissent.
The buy-up included a Bylong church, the general store, the local public school, and significant private landholdings including historic Tarwyn Park.
KEPCO was "encouraged to acquire all of the land to be either directly or indirectly affected by the development", it said in a June 27 submission to the NSW Independent Planning Commission.
KEPCO alleged the "encouragement" to buy thousands of hectares of Bylong Valley land occurred during an on-site meeting with government and department representatives in April, 2016, but encouragement to invest in the proposal was not confined to that meeting.
"Support and consent from NSW Government" since KEPCO bought the exploration licence from Anglo American in 2010 "encouraged KEPCO to subsequently invest $180 million in exploration and mine planning", the company said in its submission.
A NSW Government spokesperson rejected the allegation a government minister encouraged KEPCO to acquire the properties at the April, 2016 on-site meeting.
Mr Grieve said he doubted that the NSW Government had any plans to be involved with what happens in the valley if KEPCO finally gives up on the project. Its request to the Land and Environment Court for a judicial review of the refusal is listed for February 14.
"I doubt if the NSW Government has any plans to be involved. Maybe there's a moral responsibility there, but they don't seem to look at it that way," Mr Grieve said.
"Where it all ends up we'll just have to wait and see."
An Australian KEPCO spokesperson was contacted for comment.
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