Stanwell's Tarong Power Station ... some waste products are being used to fill a void at Meandu

December 8, 2016

Stanwell Corporation says it is “not appropriate” for the government-owned corporation to reimburse local businesses left out-of-pocket by the collapse of fly ash haulage company Coal Reuse.

This follows pressure from a number of directions for the government-owned corporation to help ameliorate some of the damage. has been told by one source that as well as some businesses being owed thousands of dollars, “at least 40 families” in the local region have been affected by the Coal Reuse debacle, ie. the signing of the contract and then the company’s subsequent collapse.

Member for Lockyer Ian Rickuss has publicly questioned the checks done by Stanwell before the contract was awarded to Coal Reuse.

However, a Stanwell spokesperson emphasised again that the corporation undertook “a comprehensive evaluation process” prior to entering into the 10-year contract with Coal Reuse.

“This included securing a letter from Coal Reuse’s accountants confirming that it was capable of achieving the investment required to fulfil its proposed contract with Stanwell,” the spokesperson said.

“Under the terms of the contract between Stanwell and Coal Reuse, Stanwell sold ash products to Coal Reuse which then on-sold those ash products to other businesses.

“Properly administered over its term, the contract could have generated solid profits for Coal Reuse.

“Stanwell was not a party to the contracts between Coal Reuse and the businesses which purchased ash products from or provided other services to Coal Reuse, and does not know the details of those contracts.

“As a government-owned corporation, it is not appropriate for Stanwell to use taxpayer funds to pay Coal Reuse’s debts, which have resulted from these private contracts between Coal Reuse and other businesses.

“Management of these debts is now being undertaken by the liquidator.”

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

Stanwell drew $800,000 from that bond just prior to Coal Reuse being placed into liquidation.

* * * has also been attempting a resolve an apparent contradiction about when Coal Reuse started working at Tarong.

Stanwell has twice stated it had a contractual relationship with Coal Reuse since 2013.

However, Coal Reuse was only registered for GST from March 1, 2014.

The explanation for this apparent contradiction is that Coal Reuse took over (novated) a number of existing offtake contracts at Tarong in February 2013.

“At the time Stanwell entered into the contract with Coal Reuse, our records provide that Coal Reuse was the third largest offtaker of ash products from the Tarong site,” the spokesperson said.

* * *

What is happening now to the fly ash and other products at the power stations?

Several contractors are currently carting fly ash from Tarong and Tarong North power stations until a new contract is signed.

The rest is being used to fill a “void” – a coal pit that is no longer being worked – at Meandu Mine.

The secondary storage area is the ash dam which is currently 95 per cent full.

“These two areas have the capacity to store ash from the Tarong Power Stations until the end of their economic lives,” the Stanwell spokesperson said.

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