Australia: Court recommends approval of an application for a mining lease and EA for The Kevins Corner Mine in the Galilee Basin

Last Updated: 14 October 2018
Article by Ian Wright, Nadia Czachor and Shaun Pryor

In brief

The case of Hancock Galilee Pty Ltd v Currie & Ors [2017] QLC 35 concerned a referral to the Land Court of Queensland of an application made by Hancock Galilee Pty Ltd for a mining lease (MLA 70425) and an environmental authority for a combined underground and open cut thermal coal mine in the Galilee Basin in Central Queensland, for the project generally referred to as the Kevin's Corner Mine.

The Kevin's Corner Mine is proposed to consist of two open-cut pits and three underground longwall operations estimated to extract 30 million tonnes of coal every year for 30 years or more.

The Court recommended that the application for the mining lease be granted and that the application for the environmental authority be approved subject to the conditions set out in the draft environmental authority.

Issues generally

The Court considered the objections and submissions in respect of the application and heard evidence from experts in the fields of groundwater, ecology, environmental science, water quality and economics, as well as evidence from the Applicant's Executive General Manager of Development Projects and the assessment manager at the Department of Environment and Heritage Protection.

The key issues in the hearing related to groundwater, economics and matters of public interest.

Despite submissions that the case was similar to the Land Court's decision in respect of the proposed Alpha Coal Mine (being the case of Hancock Coal Pty Ltd v Kelly & Ors and Department of Environment and Heritage Protection (2014) 35 QLCR 56) in which the Court recommended refusal of the relevant mining lease, the Court not surprisingly was not prepared to accept that the evidence was the same and should therefore be decided in the same way.

Groundwater

With respect to groundwater, it was submitted by the Third Respondent, Coast and Country Association of Queensland Incorporated (CCAQ), that the Applicant's evidence on groundwater was "unsatisfactory" and that the "impacts on groundwater in the area surrounding Alpha and Kevin's Corner mines are likely to be far greater than the applicant suggests" (see [69]).

The basis for this submission was the failure by the Applicant's expert to plot the hydraulic head in the D-E sandstone for data monitoring bore AVP-14. The Applicant contended that this "made a material difference to the groundwater contours and flow directions in the western and south-western parts of the Alpha lease area" (see [197]).

The Applicant's expert conceded that the data monitoring bore AVP-14 had not been incorporated into the modelling. However despite extensive cross-examination on this point, the Court found that nothing in the evidence established that the failure was significant.

Whilst both experts acknowledged that the modelling had limitations, the Court agreed with the Applicant's expert that the modelling process was an iterative process which would continue once the mine starts.

The CCAQ further contended that the introduction of the Water Reform and Other Legislation Amendment Act 2014, which had not commenced, would have the effect of amending the Water Act 2000 that the Applicant would no longer require a water licence from 6 December 2015 onwards and that the Court should not rely on later approvals under the Water Act 2000 to deal with the issues surrounding groundwater.

However, the Court agreed with the Applicant's submissions that the proper approach to be taken was to "consider and analyse the potential impacts of groundwater issues on the environment as part of the broader considerations under MRA s 269(4) and EPA s 223" and "recognise that further detailed examination of these issues will also occur, and further conditions may also be imposed, under the Water Act processes" (see [254]).

Overall, the Court preferred the evidence of the Applicant's expert and found that the evidence of CCAQ's expert had no foundation in hard data and was based upon speculation and hypothesising.

The Court accepted that the long term impact upon groundwater and the drawdown of groundwater caused by the mining operations would have some impact on groundwater in the surrounding area and consequently upon surrounding grazing and farming properties. The Court also acknowledged that only future and ongoing studies and monitoring would ascertain the true effect.

The Court found that this conclusion was not sufficient to recommend against the approval of the application and found that the groundwater impacts were appropriately dealt with and managed by the conditions imposed by the Department of Environment and Heritage Protection in the draft environmental authority and also by the Federal Government approval granted under the Environment Protection Biodiversity Conservation Act 1999.

Economics

Despite contentions on behalf of CCAQ's expert that a cost benefit analysis should be conducted, the experts agreed that the common practice in assessing the economic impact of mining projects as part of the EIS process in Queensland is the use of input-output models.

In adopting this model, the experts agreed that, while the proposal involves a significant amount of investment, it represents only a small percentage of economic output or employment in the context of the Australian and Queensland economies.

The experts also agreed that if the mine were able to produce 30 million tonnes per year as projected, in the absence of any royalty waiver, it would be liable for royalties of between $145 to $168 million dollars per annum which would be a significant contribution to the State.

The Court was satisfied that the project was likely to have positive economic outcomes and was not convinced that any of the negative economic consequences amounted to anything other than "inevitable structural change in a modern economy" (see [329]).

Court found compliance with the statutory requirements in the Mineral Resources Act 1989 and Environmental Protection Act 1994 and recommended that the mining lease application and the environmental authority application be approved

The Court considered its obligation, in making a recommendation to the Minister, to take into account and consider the factors in section 269 of the Mineral Resources Act 1989 and section 191 of the Environmental Protection Act 1994.

The Court found no basis upon which to recommend refusal of the grant of the mining lease, notwithstanding that it will convert otherwise useful grazing land into a coal mine.

The Court also found that the conditions imposed under both the Environmental Protection Act 1994 and the Environment Protection Biodiversity Conservation Act 1999 were adequate to deal with the environmental impacts caused by the proposed mining operations.

In considering what was in the public interest, the Court considered the individual rights and interests of affected landowners and lessees, as well as the overall advantages of the proposed mine. Relevantly, the Court noted that the provisions of the Mineral Resources Act 1989 provide for compensation for affected landowners and contain requirements to enter into make good agreements. The Court ultimately found that, whilst rights and interests would be affected, those affected would be compensated and any disadvantages were not sufficient to outweigh the advantages of the proposal.

The Court concluded that, whilst the exploitation of mineral resources of this magnitude would result in the disruption of other land uses and have "negative impacts and undesired consequences" on the environment, those consequences were outweighed by the benefits that would result from the development of the mine (see 378]).

The Court ultimately recommended that the mining lease application be granted and that the application for the environmental authority be approved subject to the conditions set out in the draft environmental authority.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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