Coal for Australia Pty Limited (CFA) - Business Law Assignment

Internal Code: MAS6362

Business Law Assignment:

Coal for Australia Pty Limited (CFA) is a mining company publicly listed on the Australian Stock Exchange (ASX). You are both the Chief Executive Officer and a director of CFA. CFA has recently commenced operations at a new open-cut coal mine in central Queensland, near the town of Blackstone. Coal is extracted from the mine and transported 150km to a coastal port, from where it is transported around Australia and exported internationally. CFA raised the money to finance the mine by issuing shares and taking on significant debt to a number of Australian banks. CFA owns the mine, the rail link, and the port. Obtaining government approval and finance for the mine has been controversial. Although the Blackstone Chamber of Commerce was supportive of the mine, it wanted to ensure that some of the profits were invested in the town; you signed a Memorandum of Understanding promising to invest in housing, schools and other community infrastructure. Both the Queensland and Commonwealth governments were concerned about the environmental impacts of the mine, particularly on endangered species and habitats. CFA promised various measures to protect endangered species, including by establishing a reserve in the south-eastern corner of the mining lease. What was more concerning was the difficulty in assuring the banks that the mine was a safe investment. The global demand and consequently the price of coal has been falling in recent years, due to the push towards renewable sources of energy to combat climate change. You convinced the banks to lend on the basis that at least 50% of the coal would be exported to Indonesia, which is a key developing economy and where demand for coal is at an all-time high. The Commonwealth government was particularly excited about this arrangement with Indonesia, lauding it as an important example of Australia-Indonesia economic co-operation and a boost to what has become a politically fragile relationship; the Trade Minister even attended the signing of the export contract in person. It is now January 2016, and the mine has been operational for 12 months. While things began well, CFA now finds itself embroiled in conflict on a number of fronts. Questions: 1) Identification and explanation of legal issues 2) Analysis of impact of legal issues and possible solutions 3) Identification and explanation of ethical issues 4) Analysis of impact of ethical issues and possible solutions