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Queensland’s new groundwater law a ‘risk’ to resource projects – miners

RISKY LAW Miners have warned that the new legislation can cause project delays

AFFORDABLE? Government argues that miners can afford additional administrative overheads

18th November 2016

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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Despite objections from the resources sector and dire warnings about the impact it would have on the development of coal projects, the Queensland Parliament has backed the Environmental Protection (Underground Water Management) and Other Legislation Amendment (EPOLA) Bill.

In essence, the Bill is aimed at strengthening the effectiveness of the environmental assessment of underground water extraction by resource projects, while allowing for the ongoing scrutiny of the environmental impacts of underground water extraction during the operational phase of a resource project.

The Bill is also aimed at improving the ‘make good’ framework in the current Water Act, ensuring that the administering authority for the Environmental Protection Act is a decision- maker for specific applications relating to environmental authorities.

Further, the Bill will ensure that mining projects that are advanced in their environmental and mining tenure approvals are appropriately assessed for their impact on the environment and underground water users, and that opportunities for public submissions and third-party appeals are provided before underground water is taken in a regulated area for mine dewatering purposes.

It is this last objective that is causing havoc among the resource companies in Queensland, which are arguing that additional approval requirements for projects already in the development pipeline could impact on project scheduling and financial investment decisions.

In its submissions to the Parliamentary committee inquiry into the Bill, the Queensland Resources Council (QRC) pointed out that, to date, the coordinator-general had made decisions and imposed and recommended conditions relating to groundwater on coordinated resource projects, while the Land Court had made recommendations about specific groundwater conditions.

In particular, detailed groundwater models had been prepared by several miners as part of the environmental-impact statement (EIS) process and the QRC noted that the proponents had proactively entered into ‘make good’ agreements with potentially affected landholders.

The QRC added that mining projects in Queensland were also subjected to strict environmental requirements through the environmental-impact assessment process and extensive review through the Independent Environmental Scientific Committee and the Commonwealth government’s Environmental Protection and Biodiversity Conservation Act approval process.

“These Commonwealth processes extensively scrutinise any impact on or [extraction] of groundwater and explicit conditions [are] imposed to deliver environmental outcomes,” the QRC said.

The industry body said the changes imposed by the EPOLA Bill would further increase the duplication with the “increasingly redundant” Commonwealth groundwater laws, unless there was a way of recognising earlier public consultation.

The QRC told the committee that there should be no requirement for an associated water licence for advanced mining projects that had already completed an EIS process and developed a detailed groundwater model that identified potentially affected third-party landholders and entered into ‘make good’ agreements with the majority of the landholders.

However, the Queensland Parliament seemed to disagree, ratifying the EPOLA Bill in early November.

Miners have warned that the amendments proposed in the Bill could delay resource projects.

While Indian major Adani, which is developing the A$21.7-billion Carmichael coal and rail project, is not subject to the requirement to obtain an associated water licence, thanks to a last-minute amendment in terms of which projects that have already finalised proceedings in the Land Court will be exempt from going through the process and will be able to obtain an associated water licence from government, the company has warned that the amendments will introduce a duplication of processes.

“There can be no question that the project has been thoroughly examined, consulted on, condi- tioned and reviewed by the court in respect of groundwater, among other considerations. Far from avoiding scrutiny, the project has been among the most scrutinised and reviewed of any Queensland resource projects, ”Adani said in a submission to the committee.

In fact, the Carmichael project, which will include Australia’s largest thermal coal mine, has faced a number of legal hurdles as greens groups battled to stop its development.

One of these legal challenges resulted in erstwhile Australian Environment Minister Greg Hunt granting the Carmichael project development approval, for the second time, in October last year, after the Minister’s original environmental approval was overturned by the Australian Federal Court after it was appealed by a greens group on the grounds that Hunt had failed to consider conservation advice when making his decision on the project.

Adani warned the committee that the amendments proposed in the Bill would introduce a duplication of processes already completed for the project at a significantly late stage in the approval and development process.

This duplication also introduced the risk of perverse outcomes, Adani said, as potentially conflicting approval conditions or requirements could arise.

“A repetitive process is unlikely to increase the quality of the environmental protection or the protection of other groundwater users. Instead, it will likely lead to consultation fatigue for stakeholders and further delays and costs associated with strategic appeals through a new process introduced by the Bill,” Adani noted.

Mining major Rio Tinto has also warned that imposing the amendments could pose a “very real risk” to its own Kesterl Extension No 4 project and the Hail Creek Transition project, which have both already successfully completed the various public submissions and third-party challenge processes that form part of their statutory approval.

“Third parties have been properly afforded the opportunity to have submissions on these projects heard. [Accordingly], imposing a further public process on the project at such a late stage in the approvals process is neither necessary nor reasonable.

“It creates a very real risk of increased cost and delay. This is particularly so in the current climate in Queensland. The substantial number of unsuccessful challenges to Adani’s Carmichael mine provide a clear illustration of how this risk can manifest,” Rio said in its submission.

Meanwhile, coal miner New Hope MD Shane Stephan warns that the company is likely to start redundancies at the Acland mine, as the EPOLA Bill poses a “risk” to the A$900-million expansion of the mine.

The New Acland Stage 3 project will expand the mine’s yearly output from 4.8-million tonnes to 7.5-million tonnes and extend the mine life beyond the current end-date of 2017/18.

However, Stephan notes in his letter that, despite the project having been subjected to an EIS and a public consultation process and a draft environmental approval having been issued by the Department of Environment and Heritage Protection in August last year, the new Bill could stall the expansion by as long as two years, as New Hope will have to apply for an associated water licence, which would require mining lease approval and a baseline assessment.

The baseline assessment could take 6 to 12 months to complete, Stephan points out, noting that the application process for an associated water licence could take an additional 6 to 12 months.

“As [the] resource within our current mining lease will be declining in 2018, it has always been New Hope’s case and, in fact, the subject of our application for urgency in the current Land Court hearings, that, without approval of a further mining lease in a timely manner, by the first quarter of 2017, redundancies will start as early as April next year,” Stephan says.

The committee, in its report, noted the objections by the miners, but highlighted that the opposition was coming mostly from large- scale operators for whom the “administrative overhead” required by the additional assessment processes is an “accepted cost” of doing business.

“Mining licence holders will have been aware of the potential for legislative amendments and the affected mining licence holders have had sufficient time to apply for a water licence under the currently applicable provisions of the Water Act or to prepare themselves to do so,” the report reads.

Regarding the possibility of some 300 redundancies at New Hope, the committee states that the number of anticipated job losses not only from the New Acland mine but also other projects in similar circumstances, as well as the economic and social impact on rural and regional communities, is “beyond its ability” to ascertain in the time available.

Instead, the committee has placed the onus back on government, recommending that the Minister of Environment and Heritage Protection examine the impact on relevant mining licence holders’ short-term prospects and the resulting impacts on affected communities.

In passing the EPOLA Bill through Parliament, Environment Minister Steven Miles said future mining projects would have the environmental impacts of their groundwater extraction initially assessed under the Environmental Protection Act 1994 as part of their environmental authority application.

He said stronger rights for farmers was another outcome of the new Bill.

“This will be achieved by improving the existing ‘make good’ obligations under the underground water management framework in the Water Act 2000.

“When they become law, the amendments we passed will ensure landholders are in a stronger negotiating position and are fairly compensated for impacts on their infrastructure and on the water resources they rely on,” Miles said.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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