The Alliance has written to three state ministers calling on them to block the sale of Rio’s Blair Athol Mine to TerraCom for just $1, following a similar attempt by the company to sell Blair Athol to the now bankrupt Linc Energy in 2013.

A Rio Tinto spokesman told ICN: “These discussions may or may not result in an agreed transaction and are subject to the execution of a binding sale and purchase agreement and approvals from the Joint Venture participants and the Queensland government.”

As part of the sale, TerraCom will also receive $A80 million from Rio Tinto to meet Blair Athol Coal Mine’s rehabilitation liability as determined by Queensland’s Department of Environment Heritage Protection in November 2015.

The Financial Assurance will be provided as cash to be held in a bank account approved and controlled by the Queensland Department of Natural Resources and Mines.

TerraCom was in financial distress in 2015 and remains in the position this year, following a debt restructure, due to the extent of its leverage combined with depressed coal markets, according to analysts IEEFA.

Lock the Gate’s mine rehabilitation reform campaign coordinator Rick Humphries said: “Rio operated Blair Athol for 30 years and made huge profit from the operation.

“When it shut the mine in 2012, Rio gave a public undertaking that it would fulfill its legal obligations and fully rehabilitate the site. This sale shows Rio wants to renege on this commitment and is now trying to sell the site to a junior mining company and avoid the full cost of rehabilitating the mine.”

Lock the Gate said the $80 million for rehabilitation is not enough and “Rio is prepared to stump up this amount because it knows it will cost a lot more, probably twice this amount, to actually properly rehabilitate the site”

“It’s now up to the Queensland government to protect the state’s taxpayers from being left with the cost of cleaning up after Rio and block this sale from going ahead,” Humphries said.