It’s been widely reported that the coal mining industry is facing a prolonged downturn, with investment analysts at Citibank telling clients last year not to expect a rapid revival in thermal coal prices, while many Australian coal producers have posted financial losses in recent years.
That’s why it is surprising to learn of a recent spate of approvals for mine expansions in the coal heartlands of New South Wales. It seems that even in a downturn, the approvals process for new mines – at least in NSW – is continuing to move as fast as ever.
Those mine approvals will leave a lasting legacy. According to the NSW Auditor-General, as of 30 June 2012 there were about 573 derelict mine sites in NSW (including gold and other minerals, as well as former coal mines). And only a small fraction of those derelict mines were being rehabilitated.
New mine approvals
Earlier this month, the NSW Planning Assessment Commission (PAC) gave a green light to Rio Tinto’s controversial Mount Thorley-Warkworth extension in the Hunter Valley. The move follows the PAC’s decision last month to approve two other big coal mine expansions, at Moolarben, near Mudgee, and Bengalla, near Muswellbrook.
In each case, the argument hinged on economic benefits, such as the direct and indirect spending associated with the project, the government royalties they will generate, and the jobs they will create and existing jobs they will secure.
The negative aspects of these developments, such as the impact on the local environment and communities, including the way regional landscapes are being scarred by huge holes in the ground, do not seem to have received the same consideration by the PAC and by most in the media.
In the case of Yancoal’s expansion near Mudgee, the PAC acknowledged that 1,534 hectares of land will be cleared (of which 123 hectares is deemed to contain endangered ecological communities).
Meanwhile, Rio Tinto’s Mount Thorley Warkworth project is expected to have a significant impact on the community of Bulga and its surrounding environment.
The rules on who’s responsible for mined land
In NSW all exploration and mining activity must be conducted in accordance with approvals under the Mining Act 1992 and the rehabilitation of mined land is therefore covered by law.
Resources and Energy (NSW Trade and Investment) has the responsibility for setting and assessing sustainable rehabilitation outcomes, and the industry must demonstrate to them “best practice ecological rehabilitation” of mined land if they are to recover their mine closure bond. There is therefore a strong financial incentive for miners to do a good job, as they must demonstrate that they have a plan for post-mining land use and mine closure when open-cut mining ceases.
Corinne Unger from the University of Queensland’s Centre for Mined Land Rehabilitation is among those to have raised the question of how Australia should be better managing the 50,000 abandoned mine sites across the country.
There are more and more of these “final voids” – typically meaning huge holes in the ground – being left as a legacy of both former and current opencut mining operations.
The Newcastle Herald reported earlier this month that:
Mining in the Hunter Valley could leave a legacy of more than 10,000 hectares of land consumed as “final voids”, or giant holes left by mines, prompting a push for the state government to investigate their cumulative impacts on the region’s water table and agriculture. The independent Planning Assessment Commission has urged the government to undertake the study, and branded as ‘‘unacceptable’’ mining giant Rio Tinto’s proposal for a 950-hectare final void at its Mount Thorley mine site – an area it notes is … about a sixth of Sydney Harbour.
In advice issued to the commission, the Department of Planning has revealed it is “not aware of the total size” of existing and approved voids in the Hunter. But approval had been given for about 30 to be developed that on a “conservative estimate” would cover 7500 to 10,000 hectares, it said.
This has been a long-running issue. Back in 2005, a NSW Department of Planning report found that there would be more than two dozen of these large open holes left on the floor of the Hunter Valley, and that all would become “saline water sinks” without rehabilitation.
The question is: why aren’t these miners required to fill in their final voids as a matter of course, as part of the government-approved mine rehabilitation plan?
One word: cost.
As The Newcastle Herald has also reported, a Rio Tinto spokesman said that the final void left behind at the Mount Thorley-Warkworth mine “will be largely hidden from view due to the surrounding landscape and extensive rehabilitation works planned after mining”. But will it be completely filled in? No.
The NSW Department of Planning has estimated it would cost at least A$2 billion over the life of the mine to completely fill the void, and said it would “not be reasonable to impose a condition that requires Rio Tinto to completely or even partially backfill the final void”.
The NSW government has a wide range of legislated powers for regulating mine site rehabilitation, including setting environmental management and rehabilitation conditions, requiring rehabilitation security bonds and enforcement powers to ensure lease holders comply with their obligations.
But the regulators now accept that mine voids from current mines are to remain in the landscape once mining ceases, despite their legal responsibility to ensure that miners undertake best-practice rehabilitation, if they are to recover their bond monies.
It seems that rehabilitation of the final void is going a little too far in terms of “best-practice ecological rehabilitation” of mined lands. The cost to rehabilitate the final void should be borne by the industry that has earned income from digging up and selling the coal. It should no longer be acceptable to leave a large hole in the ground as a legacy.
Cleaning up the problem
Later this month, a Best Practice Mine Rehabilitation Conference is being held in Singleton, which will feature a panel discussion on the role that final voids could play in the landscape of the Hunter Valley.
In my view, this would not be needed if the industry and regulators were doing the right thing for the community and the environment by requiring that these features be filled in.
As the situation currently stands, the hundreds of mining holes that litter the Hunter Valley represent a significant financial liability to the state.
Very little government funding is available for their ongoing management, let alone their rehabilitation. In 2013-14, the NSW government allocated just A$4.276 million for the rehabilitation of derelict mines – and that amount fell in 2014-15 to A$4.071 million.
That’s a pittance of the A$1.5 billion that the NSW mining sector says it paid to the NSW government in 2013-14.
Whoever wins the March 28 election, the next NSW government needs to recognise the financial liability being left to current and future taxpayers not only from derelict sites, but also the current mines being allowed to be left behind in future without complete rehabilitation.
For “best practice” to mean something, this should mean that people living in regional NSW are not left with a landscape blighted with hundreds of holes in the ground.