Cowper gives Lanco serve

WA businesses should boycott Griffin Coal's Indian owner Lanco Infratech, says Murray-Wellington Liberal MLA Murray Cowper.

His comments come despite Energy Minister Mike Nahan initially saying the government would not get involved in the company's financial difficulties.

Mr Cowper said in a media release Lanco Infratech deserved to be "starved out of WA, if it cannot be formally expelled".

Member for Collie-Preston Mick Murray asked whether Mr Cowper's relationship with contractor Carna Civil and Mining, which severed ties with Lanco earlier this month, may have clouded his judgment.

"I find it strange that he has made comments about Lanco now, yet has made no effort at any time to try to increase the coal prices which make the company viable," Mr Murray said.

In response Mr Cowper asked the Collie Mail to question who had funded a trip Mr Murray took to India around the time of Lanco's purchase of the mine in 2011.

Mr Cowper said nobody in his family was employed by Carna. He did know owner Harry Carna personally.

"It is a relationship as with any other of my constituents, it is professional," he said.

Although Mr Cowper's comments differed from the state government's position, Mr Nahan stopped short of rebuking him.

Mr Nahan said unlike Premier Coal, Griffin under Lanco had operated inefficiently.

"I understand many businesses in Collie have been frustrated by this, along with people such as local member Murray Cowper," he said.

Mr Nahan repeated that the state government had no intention of bailing out the owners of Griffin.

"When Lanco bought into Griffin, it received an uplift in the coal price, equivalent to the one that we recently gave to Premier Coal," Mr Nahan said.

However, Collie Shire president Wayne Sanford said Mr Nahan's position was no longer valid because the community of Collie was being negatively affected by disruptions at Griffin.

"There is now a situation where many employees are either facing losing their jobs or have already been given termination notices," he said.

"There is clearly an issue with the viability of the coal industry."

Mr Cowper claimed Lanco had defaulted on millions in incurred debt, was not honouring its contractual obligations and should be subject to official scrutiny. 

His comments come after state-owned Fremantle Ports last week sent a "termination notice" to Lanco.

Mr Cowper alleged Lanco was attempting to export to India at the expense of local firms and utilities.

"This company is already responsible for many hundreds of lost jobs and continues to coax more local businesses into supplying goods and services it appears to be unable to pay for," he said. 

When contacted by the Collie Mail, a spokesperson for Griffin said the company would not be responding to Mr Cowper's comments.

Mr Sanford called on the state government, power generators and coal companies to meet with the Shire Council to resolve the current uncertainty of the coal and power generation industries in Collie.

He said a plan for a transition from coal was needed but that for the foreseeable future the resource would play an important role in the state's economy.

"Conservation groups consistently advocate for the demise of the coal industry here in Western Australia but the reality is that coal will, and needs, to play an important role in the State's economy for years to come."  

Griffin's first press release since Carna pulled out said employees had been told the company needed to reduce operating costs and obtain an increase in the price it received for its coal to cover operating costs.

"We understand there is a lot of speculation among employees and within the town of Collie about Griffin's viability, which is why we have briefed and written to employees saying we are doing all we can to protect all our futures, but it isn't something we can do alone," the release said.

"The WA coal industry has not been immune from the cost pressures faced by Australian mining companies but also faces the additional challenges of the legacy of long-term domestic coal contracts which were entered at a period of significantly lower costs and lower overburden removal requirements."

The Treasury in its Mid-Year Economic and Fiscal Outlook said coal prices were unlikely to increase over the forward estimates period.