Tuesday, 1 September 2020
[by video link] Mark Twain once said, famously:
A mine is a hole in the ground with a liar on top.
Madam Acting Deputy President Walsh, I'm about to tell you a story, and you can decide whether or not this is a hole in the ground with a liar on top. Let me set the backdrop for you.
We go back to August 2013, seven years ago, when a company called Venture Minerals got a permit from the then Labor government for an iron ore mine in Riley Creek in Tasmania. Riley Creek is in the southern end of the Tarkine, one of the most tranquil places you will ever find. It's a landscape so rich and wild that it's said to be of national and World Heritage value. That's not to mention that it's home to the spot-tailed quoll. And at this time, in 2013, it was one of the last strongholds of the Tasmanian devil populations which remained free from the Tasmanian devil facial tumour disease. Being such a sensitive area for our Tassie state emblem, conditions were attached to the 2013 mining permit approval—no trucks outside daylight hours to reduce the road-killed risk to the devil at night and, within two years of starting, the company must pay a chunk of money to the Save the Tasmanian Devil Program.
Another important condition gave Venture five years to start their mine or, in legal terms, be substantially commenced. If they didn't start in those five years, they would have to seek written agreement from the minister, which would likely involve a reassessment of the mine licence and conditions. The reason for seeking ministerial approval was that the devil facial tumour disease was expected to rapidly spread throughout this area following 2013 when the mine was approved. Remember: this was one of the last places left in Tassie that the devil was free of this awful disease—so much so that an insurance population was even released into the Tarkine wilderness not long after the mine was approved in 2013. Even with that insurance population, the devils continue to face significant stress from roadkill and a serious loss of habitat from frequent bushfires. So any significant delay to a mining project with thousands of truck movements certainly warranted a further risk assessment for the long-term survival of the Tasmanian devil.
Almost a year after the permit was granted, nothing had been reported to the department from Venture Minerals about the commencement of their mining. And then, for the next five years, the company publicly reported to their shareholders and to the Australian Stock Exchange that they remained in a pre-extraction stage, ready to take out iron ore when the market was right. But pre-extraction is not considered to be 'substantial commencement' under the 2013 permit conditions and approval. They had to actually extract ore for the permit to remain valid.
In 2018-19 the price of iron ore is on the up, and the market looks right. But wait a minute; we're out of the five-year limit. So what does Venture do? In July 2019, they write to the department and the environment minister and they say: 'Hold up. We've actually ripped out over 10,000 tonnes of iron ore way back in 2013 and 2014. Yes, that was five years ago. Sorry it took us so long to let you know, but now we're doing that.' This was totally contrary to what they disclosed to shareholders and to the Australian Stock Exchange. At this point, assuming this Riley Creek project was material to Venture's share price—and I've got to say, based on their statements, it was—they would have needed to mine the Riley Creek mine to get cash flow to ramp up other mines in the area. This slip-up in reporting, intentional or not, had to have breached ASX continuous disclosure rules. There's no doubt the ASX will investigate that. But that's not the key issue here.
This is where it gets really interesting. You would think the environment department must have very pretty surprised about the changed status to Venture's mining operations. After receiving all these notifications for years that no mining had commenced, they were supposed to have let the department know if they had substantially commenced and, when that happened, they were due to pay a chunk of money to the Tasmanian devil fund, which they clearly hadn't. What did the department do? They apparently investigated the permit conditions and then gave Venture a slap on the wrist—a $25,000 fine for breaching one permit for the condition related to not paying the devil fund.
To my knowledge, and more importantly, the department never investigated whether Venture, in fact, had actually substantially commenced mining in line with their permit commit conditions. Remember: if they hadn't, their mining licence wouldn't be valid, and they would have to apply to the minister and potentially undergo a new environmental assessment. Why wasn't this critical factor assessed? Nobody knows. What would you do if you were Venture Minerals? You'd be waiting for six years. Your iron ore price is now running hot from this extraordinary event internationally with COVID, but you find yourself in breach of licence conditions because you've never substantially commenced mining. You look for a loophole. You change your story and admit to years of misreporting. Do you pay a $25,000 fine—a veritable slap on the wrist for the costs of doing business—or do you admit you overlooked an important licence condition and seek a new agreement with a potentially lengthy approval process and run the risk you might miss the iron ore price window?
Interestingly, this convenient reporting mistake to the Commonwealth also gives Venture a defence against being in breach of state reporting conditions which also expired on 24 September 2019. Bob Brown and Save the Tarkine, who used satellite images to corroborate Venture's early statements that substantial mining had indeed not occurred in April 2019, last year publicly raised the issue that the minister should not substantially commence without an agreement and with representations around properly assessing the Tasmanian devil. Those formal representations were made to Minister Ley in June 2019, that she should not agree to any substantial commencement until a proper re-assessment had occurred in light of the rapid spread of the devil facial tumour disease and recent bushfires. It is worth noting that Venture didn't disclose their innocent mistake to the federal government until 17 July—a month after the Bob Brown Foundation had gone public immediately following these representations. It's highly unlikely to be a coincidence and it is almost certainly a response to the efforts of conservationists to get the risks to the devils properly assessed.
Following Venture's remarkable mistake with their reporting, both these organisations, the Bob Brown Foundation and Save the Tarkine, then provided substantial information to the minister about Venture's recent statements being at odds with a number of striking, publicly available facts. They also pointed out in detail exactly what the legal term for substantial commencement was in relation to the mine approval, which had clearly not occurred on site. They mounted a strong case that the activity that Venture claims was substantial was in fact simply exploration—not mining work and not substantial commencement. Save the Tarkine has put it to the minister that Venture has recast it as ore extraction in order not to be found in breach of permit conditions and, I note, to have not misled investors at this point and to avoid further assessment of its EPBC permits and the lapsing of its Tasmanian land-use, planning and approval permits.
So did Venture, sitting on a hole in the ground, tell a lie to capitalise on rising ore prices and risk the Tasmanian devil? Given the prima facie case made against them by the Bob Brown Foundation and Save the Tarkine, surely this should be properly investigated, given Venture, last year, in 2019, raised millions of dollars in share placement on the stock market around their reviewed activity in the Tarkine, primarily at the Riley Creek ore mine. I would expect that they disclose the risks of a potential legal challenge or investigations by authorities relating to being in breach of their permit conditions and disclose the risks of a new federal assessment process at a time the Tasmanian devil, a threatened endangered species, is under acute risk. The failure to do so surely would have been reckless, negligent or even deceptive and misleading.
I can't find any public record of any such disclosure. The only record I could find was a statement to investors in the second half of 2019 in which the company said their EPBC permits were valid. I intend to ask the Australian Stock Exchange and ASIC, the Australian Securities and Investment Commission, to investigate this. Venture may well have disclosed these risks to shareholders; I'm not saying they didn't, just that there is no public record I can find. I also understand that the Bob Brown Foundation has lodged complaints with the Australian Stock Exchange and with the Australian Securities and Investment Commission over its concerns around existing statements by Venture also being potentially deceptive or misleading. (Time expired)