❓ Opposition MP Johnston questions the Energy Minister Nahan about the disclosure of a loan agreement between Synergy and Premier Coal by Yancoal, despite the Minister's claims of commercial confidentiality. The Minister defends the arrangement as a necessary update to a previous contract to protect Synergy's interests.
AnsweredQoN 316Legislative Assembly
QuestionView source ↗
SYNERGY — PREMIER COAL SUPPLY AGREEMENT
316. Mr W.J. JOHNSTON to the
Minister for Energy:
I refer to the minister's repeated claims that the
details of his loan to Premier Coal that can be converted to equity was ''commercial-in-confidence''.
(1) Is the
minister aware that the details of this arrangement have been included in
Yancoal's publicly reported results?
(2) Are the
details of the arrangement disclosed by Yancoal accurate?
(3) When was the
minister first informed that Yancoal would disclose the details of this
arrangement?
316. Mr W.J. JOHNSTON to the
Minister for Energy:
I refer to the minister's repeated claims that the
details of his loan to Premier Coal that can be converted to equity was ''commercial-in-confidence''.
(1) Is the
minister aware that the details of this arrangement have been included in
Yancoal's publicly reported results?
(2) Are the
details of the arrangement disclosed by Yancoal accurate?
(3) When was the
minister first informed that Yancoal would disclose the details of this
arrangement?
AnswerView source ↗
I thank the member for the question.
(1)–(3) For
those who are interested, Synergy signed a contract some years ago with Premier
Coal, which is the sole provider of coal to Synergy. It was purchased by
Yanzhou Coal Mining some years ago. A year or so ago discussions were held and
the coal provider is called Premier Coal. Premier Coal went to Synergy some
time ago and indicated that it was losing a substantial amount of money on the
coal sold to Synergy. Synergy then entered into discussions with Premier Coal
over a lengthy period to see whether they could agree to a new arrangement.
They did not enter into a new agreement; they altered the existing agreement.
They agreed to an uplift in the price on a comparable basis that Bluewaters has
with Griffin Coal, I might add. When Griffin, the other coal provider in the
state, entered into a contract with Bluewaters to provide coal to it, it gave
it an uplift at the time. Part of the Synergy contract included —
Point of Order
Mr
W.J. JOHNSTON : This information may be of interest to the minister
but it is not what I asked. I asked about a specific aspect; namely, about the
undisclosed loan, not any other matter related to the contract.
Dr
M.D. NAHAN : I will answer the question in the way I choose and, yes,
I will answer the specific questions.
Mr W.J. JOHNSTON :
The minister must answer the question in accordance with the standing orders
and your ruling, Mr Speaker, not as he chooses. I ask again that he answer the
question asked, which is a matter about the disclosure of a secret arrangement
by this minister.
The
SPEAKER : Minister, you must answer the question with answers
relevant to the question. You can have a little lead-in, but then you must
address what is asked.
Questions without Notice Resumed
Dr M.D. NAHAN :
That was exactly what I was doing.
Part of those renegotiations included an agreement to convert
some of the price to equity, as I indicated in this house. When the contract
was entered into by the Labor Party last decade, it was as per the usual
arrangements for fuel contracts. As indicated by the minister of the day, Alan
Carpenter, repeated by the Premier of the day, Geoff Gallop, the details of
these fuel contracts are confidential. That is what we respected in updating
this contract and we continue to do so. Yanzhou Coal disclosed some greater
detail of that arrangement to overseas regulators, not Australian regulators.
That was its choice and it is the convertible loan component of the contract.
As far as I know—I was told about the release of that information on
Yanzhou Coal yesterday—it is its choice, not ours. We will not take
action against it; it is its choice. I disclose it as per the details of the
contract. As far as I know, the issues referred to in the paper are accurate.
The question is: why did we do that? One of the weaknesses of the old contract
was that in case of bankruptcy, Synergy had no equity in the business and had
no step-in rights. To overcome a weakness in the existing contract, Synergy
requested that I allow it—I did—to have part of the note
converted into equity if it chooses to do so, to make sure it has greater
powers in case of a right of entry to the firm in case the firm goes bankrupt.
It will allow Synergy to take equity in an upside risk if Premier Coal turns
profitable. By the way, disclosures in today's paper show Premier Coal
is still losing a substantial amount of money. If Premier Coal turns
profitable, if it wishes, Synergy can elect to take equity and share in some of
the upside risk since it is the major purchaser of coal. It is a very rational
process. The reason the opposition got information about it is that we kept it
confidential as per the contract but Yanzhou Coal disclosed further details to
an overseas regulator.
(1)–(3) For
those who are interested, Synergy signed a contract some years ago with Premier
Coal, which is the sole provider of coal to Synergy. It was purchased by
Yanzhou Coal Mining some years ago. A year or so ago discussions were held and
the coal provider is called Premier Coal. Premier Coal went to Synergy some
time ago and indicated that it was losing a substantial amount of money on the
coal sold to Synergy. Synergy then entered into discussions with Premier Coal
over a lengthy period to see whether they could agree to a new arrangement.
They did not enter into a new agreement; they altered the existing agreement.
They agreed to an uplift in the price on a comparable basis that Bluewaters has
with Griffin Coal, I might add. When Griffin, the other coal provider in the
state, entered into a contract with Bluewaters to provide coal to it, it gave
it an uplift at the time. Part of the Synergy contract included —
Point of Order
Mr
W.J. JOHNSTON : This information may be of interest to the minister
but it is not what I asked. I asked about a specific aspect; namely, about the
undisclosed loan, not any other matter related to the contract.
Dr
M.D. NAHAN : I will answer the question in the way I choose and, yes,
I will answer the specific questions.
Mr W.J. JOHNSTON :
The minister must answer the question in accordance with the standing orders
and your ruling, Mr Speaker, not as he chooses. I ask again that he answer the
question asked, which is a matter about the disclosure of a secret arrangement
by this minister.
The
SPEAKER : Minister, you must answer the question with answers
relevant to the question. You can have a little lead-in, but then you must
address what is asked.
Questions without Notice Resumed
Dr M.D. NAHAN :
That was exactly what I was doing.
Part of those renegotiations included an agreement to convert
some of the price to equity, as I indicated in this house. When the contract
was entered into by the Labor Party last decade, it was as per the usual
arrangements for fuel contracts. As indicated by the minister of the day, Alan
Carpenter, repeated by the Premier of the day, Geoff Gallop, the details of
these fuel contracts are confidential. That is what we respected in updating
this contract and we continue to do so. Yanzhou Coal disclosed some greater
detail of that arrangement to overseas regulators, not Australian regulators.
That was its choice and it is the convertible loan component of the contract.
As far as I know—I was told about the release of that information on
Yanzhou Coal yesterday—it is its choice, not ours. We will not take
action against it; it is its choice. I disclose it as per the details of the
contract. As far as I know, the issues referred to in the paper are accurate.
The question is: why did we do that? One of the weaknesses of the old contract
was that in case of bankruptcy, Synergy had no equity in the business and had
no step-in rights. To overcome a weakness in the existing contract, Synergy
requested that I allow it—I did—to have part of the note
converted into equity if it chooses to do so, to make sure it has greater
powers in case of a right of entry to the firm in case the firm goes bankrupt.
It will allow Synergy to take equity in an upside risk if Premier Coal turns
profitable. By the way, disclosures in today's paper show Premier Coal
is still losing a substantial amount of money. If Premier Coal turns
profitable, if it wishes, Synergy can elect to take equity and share in some of
the upside risk since it is the major purchaser of coal. It is a very rational
process. The reason the opposition got information about it is that we kept it
confidential as per the contract but Yanzhou Coal disclosed further details to
an overseas regulator.
Explore WA Government Data
Search the full archive in the free dashboard, or query programmatically via API.
Explore more
Government Gazette
Appointments, regulatory notices, planning changes.
Hansard
Debates, questions, speeches and sentiment.
Tabled Papers
Reports and documents tabled in Parliament.
Committees
Committee profiles and recent reports.
Regulations
Subsidiary legislation with filters and summaries.
Bills
Proposed laws and parliamentary progress.
Acts
Current WA legislation and summaries.
Explanatory Memoranda
Bills with EMs (text/PDF) available.
Members
MP profiles, party breakdown and rankings.
Pollie Rankings
Data-driven rankings across 19 categories.
Amendment Chains
Track how schemes and regulations evolve over time.