Premier Roger Cook says the support will enable Griffin Coal, which is in receivership, to continue operations at its Collie mine until June 2026 and save hundreds of workers from losing their jobs.
"It is disappointing that the private companies involved in Griffin have been unable to find a commercial solution to their problems, despite significant support from government," he said on Friday.
"But a sudden closure of the Griffin mine would see hundreds of workers lose their jobs overnight and put at risk the stability of our electricity system."
Griffin supplies coal to industry and the Japanese-owned Bluewaters Power Station, which produces more than 15 per cent of WA's electricity.
Receivers were appointed to Griffin, which is owned by India's Lanco Infratech and also in liquidation, last year following commercial disputes.Â
The WA government has injected $39.3 million to prop up the mine, 185km south of Perth, during the past 12 months.
Mr Cook said funding Griffin until mid-2026 would give the mine workers and industry time to prepare for the mine's potential closure.
Unions warned the decision to only fund the mind for two-and-a-half years would have dire consequences for jobs, energy security and the long-term future of the region.
The Mining and Energy Union WA Secretary Greg Busson said the plan "rubber stamps" the eventual closure of Griffin Coal and Bluewaters Power Station.
Australian Manufacturing Workers Union secretary Steve McCartney said the support was not enough to enable the workers and the Collie community to transition away from the coal industry.
"After multiple reviews by expensive consultants, the best plan the government can come up with is to tip more taxpayer money down the black hole at Griffin Coal," he said.
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