Tarong Power Station ... work by Coal Reuse to construct a fly ash handling facility at the station is not believed to have started

September 6, 2016

Troubled Tarong fly ash contractor Coal Reuse has been placed in liquidation, leaving a trail of creditors in its wake who could be owed as much as $1.2 million.

Company chairman Rodney Hudspeth sought to have wind-up proceedings at the Supreme Court in Brisbane adjourned on Monday, but was unsuccessful.

Justice Jean Dalton ordered that Coal Reuse be wound up and that David Hambleton and James Imray, from Rodgers Reidy in Brisbane, be appointed liquidators.

In June, Mr Hudspeth issued a statement saying “restructuring and refinancing” of the business was on track to be completed by the end of that month and that he “sympathised with creditors” who had applied to the court for a winding up order.

The original application to wind up Coal Reuse was lodged in the Supreme Court on May 9 by Morayfield-based Bulk Granite Haulage (RW & G Johnston Pty Ltd) which claimed it was owed $17,000 by Coal Reuse.

Blackbutt business BSG Civil, better known as Blackbutt Sand and Gravel, joined the application in June, saying it was owed $76,500.

At Monday’s hearing, a number of other companies and individuals indicated an interest in the proceedings: BG&E Materials Pty Ltd, Ian James Boxall, Dinterra Pty Ltd, Earth Science Solutions Pty Ltd, J.E. and M. Fuhrman-Luck, Mackay Plumbing Kingaroy Pty Ltd, Placement Pty Ltd, Spruson and Ferguson Pty Ltd, and Standard8 Pty Ltd.

Brendan Doherty, from debt recovery business Collection Advantage – which has been working with some of Coal Reuse’s South Burnett creditors – said he had seen paperwork which suggested the total owed by Coal Reuse could be more than $1.2 million.

He said there were other South Burnett creditors who had not sought to join the wind-up application.

Mr Doherty said he believed the liquidators had no intention of allowing Coal Reuse to continue trading, so the next step would be to wind up the company and sell its assets.

In July this year, Coal Reuse attracted much negative publicity when the ABC reported the company was storing 1400 tonnes of cenospheres from the Tarong power stations in industrial sheds at Gympie and Pinkenba “with no obvious destination”.

At the time, Coal Reuse branded the allegations as “misinterpretation” and “mischief-making”.

southburnett.com.au understands that fly ash handling equipment that Coal Reuse was to install at Tarong North Power Station is almost complete, however Coal Reuse has not yet started work on a multi-million dollar plant that was to be installed at the older Tarong Power Station.

Coal Reuse is also believed to have outstanding obligations at Stanwell Corporation’s third coal-fired power station, at Stanwell, near Rockhampton.

In June, Mr Hudspeth said Coal Reuse had invested $5 million to date and was “well advanced on spending another $1 million on equipment” for Tarong North fly ash requirements and additional capital at Tarong to fulfil its obligations to Stanwell Corporation.

In 2014, Coal Reuse struck a 10-year deal to remove fly ash and other combustion waste materials from Stanwell’s coal-fired power stations.

The decision at the time to replace Pozzolanic Enterprises – a subsidiary of Cement Australia – was greeted with dismay by a group of South Burnett truck drivers, some of whom had been hauling fly ash from the Tarong power stations for Pozzolanic for more than 20 years.

At the time, Cement Australia was embroiled in a long-running court case with the ACCC over allegations that it was engaging in anti-competitive conduct in regards to its fly ash business. Cement Australia was subsequently fined $18.6 million by the Federal Court (later reduced to $17.1 million) however the leniency of this fine has recently been appealed by the ACCC.

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southburnett.com.au approached Rodgers Reidy, Stanwell Corporation and Mr Wentworth Hill (a previous spokesman for Coal Reuse) for comment.

We received the following reply from Stanwell:

On September 5, 2016, the Queensland Supreme Court ordered the winding up of Coal Reuse Pty Ltd and appointed a liquidator.

The liquidator now has full control of the company and its affairs.

Stanwell has a contract with Coal Reuse for the removal of ash products from its coal-fired power stations.

Stanwell is considering its position and expects to speak with the liquidator as soon as practicable.

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As part of the 10-year contract Stanwell signed with Coal Reuse, the Sydney-based company had to provide a $1.5 million bank guarantee as a performance bond.

Recently, Stanwell drew $800,000 from that bond.

southburnett.com.au queried Stanwell as to the reasons why it had felt necessary to draw down on the bank guarantee.

A Stanwell spokesman confirmed the drawdown had occurred “however, the circumstances of the draw down of the bank guarantee are a matter between Coal Reuse and Stanwell”.


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Footnote: Justice Jean Dalton’s name may be familiar to South Burnett residents as she attended Nanango State School and Kingaroy State High School before studying law at the University of Queensland. She was admitted to the bar in 1989 and appointed a Supreme Court judge in 2011.

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