investigation
Why two zombie nickel mines near Kalgoorlie are primed to maul WA’s Mining Rehabilitation Fund

A small private company is less than three weeks away from defaulting on liabilities tied to a derelict nickel mine, threatening the State Government with a record clean-up bill well beyond $100 million. The Department of Mines, Petroleum and Exploration is locked in a high-stakes pursuit of Wingstar Investments, demanding a $9.1 million security bond to cover the mothballed Avalon nickel mine. Failure to pay the bond would effectively orphan the site, offloading its massive environmental debt on to the State’s Mining Rehabilitation Fund and trigger a domino effect that could topple Wingstar’s other long-dormant nickel giant, Cawse. Wingstar once had grand plans to combine the two sites near Kalgoorlie into a “super project” anchored by the city’s infrastructure. Now, a worst-case scenario would saddle the MRF — a pooled fund run by the DMPE and sustained by levies on WA miners — with the biggest rehabilitation liability since its inception in 2013. The MRF exists to shield taxpayers from footing the clean-up bill for abandoned mines. Security bonds are used by the DMPE as a first layer of defence to minimise the financial brunt borne by the MRF. “DMPE can increase mining security when there is a high risk of the tenement holder failing their environmental obligations and the liability reverting to the State,” a department spokesman said. Wingstar was slapped with its bond ultimatum following a string of issues. “DMPE had concerns over a number of environmental non-compliances at the Avalon project which triggered the need for additional security,” the department spokesman said. A key concern related to the “inadequate” rehabilitation of waste rock dumps. Deadline approaches The clock is close to midnight. DMPE’s bond demand was issued on November 14, giving Wingstar until February 12 to pay in full. As of today, the payment has not been made. Wingstar’s last official closure cost estimates — calculated nearly two decades ago in 2007— pegged Avalon at $32.9m and Cawse at $57.4m. The DMPE has dismissed those figures as “outdated” and ordered Wingstar to provide fresh estimates last year via revised mine closure plans, which it is yet to provide. Rigorous remediation of mined-out land is a relatively new phenomenon in WA and cost blowouts have plagued pioneering projects. The MRF’s biggest undertaking to date — the Ellendale diamond mine — is glaring proof. Ellendale’s rehabilitation liability was estimated to be approximately $40m when its owner collapsed in 2015, but the MRF has so far been forced to sink more than $120m into the site. If Ellendale is anything to by, Avalon and Cawse could be a $300m-plus burden. The MRF received $62m during the 2025 financial year and its balance stood at $356m by June 30. Mines Minister David Michael conceded the clean-up cost of Avalon and Cawse would be “significant” but was confident it would not jeopardise the MRF’s viability. He is banking on the fund gradually absorbing an Avalon-Cawse hit over “many years”. “Rehabilitation is typically implemented over many years, allowing costs to be managed progressively alongside the continued growth of the fund,” Mr Michael said. “DMPE has successfully managed legacy sites in this way, including the Ellendale diamond mine.” But the Minister was unable to provide a current liability estimate for the rehabilitation of Avalon and Cawse. The mines last produced nickel in the 2000s and were owned by Russia’s Norilsk Nickel before being offloaded to Wingstar in 2014. Wingstar is ultimately held by Singapore-based Logistek Pacific, with both entities controlled by veteran Perth prospector Robert Gardner and Canadian resident Rick Sibo Lu. Mr Gardner, who is also the chairman of ASX-listed tiddler Dragon Mountain Gold, did not respond to The West Australian’s requests for comment.

investigationWhy two zombie nickel mines near Kalgoorlie are primed to maul WA’s Mining Rehabilitation Fund

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Why two zombie nickel mines near Kalgoorlie are primed to maul WA’s Mining Rehabilitation Fund