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WA government offers $19.5 million to keep struggling Griffin Coal mine operational

The WA government has offered Griffin Coal almost $20 million to keep operating.  (ABC News: Daniel Mercer)

The WA government says it has offered a struggling overseas-owned coal miner almost $20 million to continue operations in a bid to protect the state's electricity supply.

Griffin Coal went into receivership in September owing close to $1.5 billion to creditors.

The WA government in December flagged it would offer Griffin Coal some kind of bail out grant but had refused to disclose the amount.

Griffin Coal supplies the Japanese-owned Bluewaters Power station which feeds into Western Australia's main electricity network, the South West Interconnected System (SWIS).

Today State Development Minister Roger Cook revealed to parliament the government had offered Griffin $19.5 million so far to ensure the stability of the electricity supply to the state.

But he said the company had not yet drawn down on the fund.

Griffin Coal produces about 2.5 million tonnes of coal per year.  (ABC News: Gian De Poloni)

"Griffin has a role to play in supporting a stable energy system while we continue to transition away from coal-fired power generation," Mr Cook said.

"It is the McGowan Government's firm belief that Griffin Coal and its receivers should come to a commercial arrangement with their customers to pay a fair price for coal that will ensure longer term stable operations.

"Commercial parties have not yet done so, requiring the state government to take a proactive approach and seek a solution that guarantees stability of operations, worker entitlements, environmental obligations and a stable energy system.

"While ideally the government would not have to intervene in this way, we will not put the stability of our energy system at risk."

Griffin Coal entered receivership in September last year.  (ABC News: Gian De Poloni)

Mr Cook said the government expected the money to be paid back to the government from operations revenue "once commercial arrangements are resolved".

"Customers are expected to pay an appropriate price for coal that reflects the true cost of production," Mr Cook said.

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