The Australian Competition and Consumer Commission has issued a draft determination proposing to grant authorisation to M.I.M. Holdings Limited 's proposal to convert its power station at Mount Isa from coal and distillate to gas-firing, and to expand the station's capacity to supply proposed new mining developments in North West Queensland, ACCC Chairman Professor Allan Fels said today.

"MIM's Mica Creek power station is the main source of electricity for the region, which is not interconnected to Queensland's electricity grid. Mica Creek currently supplies power for MIM's mining and smelting operations and to the North Queensland Electricity Corporation (NORQEB), which distributes the electricity to the townships of Mount Isa and Cloncurry and surrounding rural areas.

"Under the proposal, natural gas would be transported from the South West Queensland gasfields to Mount Isa, requiring the construction of gas processing facilities and a pipeline. NORQEB's existing electricity transmission network would also require upgrading and expansion in order to supply the proposed new mining developments in the region.

"MIM proposes to form a joint venture, with an independent power producer, which would own and operate the Mica Creek power station and undertake its conversion to gas and expansion. The company sought authorisation under the Trade Practices Act in respect of the proposed joint supply of electricity by the power station owners, and a requirement that proposed customers (mining operators and NORQEB) will purchase their entire estimated power requirements from the owners of the power station.

"The ACCC proposes to grant authorisation in respect of MIM's applications on the grounds that the arrangements would be likely to result in efficiency and other benefits that would outweigh any lessening of competition that would be likely to result from the arrangements."

Interested parties have until 9 May 1996 in which to request the Commission to hold a pre-decision conference in relation to its draft determination.