300 Ha worth $1.3 million?
Valuers millions apart over what Indian miner should pay for land under proposed Dysart project
Wednesday 20 September 2017
The proponents of the Dysart East Coal (DEC) project five kilometres North East of Dysart have moved a small step closer to getting a mining lease this week after the Land Court made a final assessment of what compensation they should pay the owners of the 18,000 Ha Dysart Station for around 299 Ha of land.
Negotiations between DEC’s owners Bengal Coal, and the Station owners Cradcorp Pty Ltd, ended up in the court after their respective valuations of compensation came in vastly different.
“ Mr Patrick Lyons, engaged by Bengal Coal, assessed the market value of the land subject to the ML at $442,500,” the Land Court reported.
“Mr Peter Jinks, engaged by Cradcorp, assessed it at $1,345,000.
“The gulf between their assessments arises from their conflicting views about what sales and other evidence are relevant in determining the market value of Dysart Station as a whole, and the overlapped land in particular.”
In considering the compensation, the valuer's looked at a range of aspects, including the “total loss” value of the 299 Ha, the partial loss of value to adjacent land, and the value of the lost farm infrastructure.
However, the biggest contribution to the difference was what each Valuer considered to be a comparable sale.
Bengals valuer Mr Lyons started with a rate of $1,850/ha derived from analysis of nine other sales, which he discounted by 20% to reflect the impact of severance and other aspects of the existing ML and resulting in a rate of $1,480/ha.
Cradcorp Valuer Mr Jinks applied a rate of $4,500 which was derived from just two transactions where the purchaser was a resource company, without any discount.
In the end, however, the court more or less split the difference between the two valuations ordering Bengal to pay compensation to Cradcorp Pty Ltd of $836,213.40 within 14 days of receiving a Mining Lease.
However, Cradcorp was ordered to pay a proportion of Bengal’s legal costs.
“Costs are not awarded to punish the unsuccessful party but are intended to indemnify the successful party against the expense to which he or she has been put in the litigation,” Fy Kingham President of the Land Court said.
“I consider Cadcorp's conduct, in this case, has not been reasonable and responsible, at least since 22 May 2017, when Cradcorp filed a statement by Mr Jinks which did not respond to the Court’s order.
“In its conduct of this case, Cradcorp adopted an unusual and risky approach to assessing the market value of its land.”
According to the Queensland Department of Mines and Bengal themselves, the proposed mine would generate nearly 300 operational jobs and produce nearly two million tonnes of hard coking coal a year for around 20 years.
However, the project still needs the final nod from government and a final investment decision from Bengal, so it is unlikely to provide much short-term relief to Dysart residents.