Last week Mantle Mining withdrew an application to explore for brown coal in the Deans Marsh area southwest of Melbourne.  We were interested due to our involvement with other coal projects that have been controversial with local communities such as the Boggabri Mine in NSW.

The local residents were opposed to any mining development and claimed their “victory” was due to the strength of their community.  As far as communities go, it is a tough one for a miner to take on – a Greens senator lives there, much of the local economy is based on tourism, a lot of the agriculture trades on being clean and green.  There’s not a lot of mining in the area and old-growth logging in the Otways recently ended after years of campaigning.

Mantle mining emphasised their commitment to environmental and social values, demonstrated by walking away from the deal.

All good stuff and all of these things play a part, I’m sure.  But at the bottom of Mantle’s piece on the withdrawal, they say:

Mantle has taken a pragmatic decision to withdraw its application for an exploration licence in order to focus its resources on other higher priority projects. 

So part of the decision was related to potential conflict with the community and the costs that entails, but part of it was also that Mantle have other less risky, more profitable projects to pursue.  Mantle haven’t made a loss – at least no more than the difference between the Dean’s Marsh project and whatever they will do instead.

This idea of the “next-best” project is often overlooked, as public attention tends to be on a particular project and “victory” or “loss” for opponents or proponents.  The planning process also tends to focus on single projects and what net present value (NPV) would be “lost” or “gained” by it.  The opportunity cost of the next-best project is rarely considered.  This project may also be profitable/positive NPV, but be more acceptable to opponents.  We’ve been trying to point this out in recent papers relating to the Boggabri Coal extension project.

While we keep trying to point that out, best of luck to the Deans Marsh community and to Mantle Mining and their next best project – I see they have one not far away in Bacchus Marsh.