PERTH (miningweekly.com) – The New South Wales Independent Planning Commission (IPC) has pushed back on diversified miner South32’s planned extension of its Dendrobium coal mine.

The A$956-million extension project would see an additional 78-million tonnes of run-of-mine coal recovered from two new areas, Areas 5 and 6, comprising 21 long wall panels, and would extend the mine life until the end of 2048.

Coal production from Area 5 was anticipated to start in 2024, with Area 6 production to follow some 19 years later.

Coal from the Dendrobium mine and South32’s nearby Appin mine is currently used to produce a metallurgical coal blend for use in steelmaking. It is supplied directly to BlueScope Steelworks at Port Kembla and transported by sea to the Whyalla Steelworks in South Australia, as well as international markets.

While the Department of Planning, Industry and Environment found the project to be "approvable" and concluded that its benefits significantly outweighed its residual costs and that it was in the public’s interest to develop the project, the IPC on Friday said that the longwall mine design put forward by South32 did not achieve a balance between maximising the recovery of a coal resource of state significance and managing, minimising or mitigating the impacts on the water resources and biodiversity and other environmental values of the Metropolitan Special Area.

The Commission concluded that the level of risk posed by the project had not been properly quantified and based on the potential for long-term and irreversible impacts, particularly on the integrity of a vital drinking water source for the Macarthur and Illawarra regions, the Wollondilly Shire and Metropolitan Sydney, it was not in the public interest.

In its finding, the IPC stated that the proposed longwall mine design introduced uncertainty regarding the extent of environmental impacts and South32’s ability to manage those, saying that the project was likely to lead to potentially significant surface water losses into the groundwater system.

The findings also questioned the adequacy of South32’s proposed offset and compensatory provisions for impacts on water quantity and quality in the catchment, as well as stating that the predicted scope 1, 2 and 3 greenhouse-gas emissions from the project would be "significant".

While the importance of the Dendrobium mine’s contribution to the BlueScope Steelwork was also acknowledged, the IPC noted that the bulk of the expected production from the mine would be destined for export markets, and that given the development timeframes for the Area 5 and Area 6 developments, the commission did not accept the suggested dependence of BlueScope Steelworks on the expanded project.