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«13 13 Mining Prolonged rainfall over Queensland’s mining regions during the 2010/2011 wet season severely affected the industry. Huge volumes of ...»

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13

13 Mining

Prolonged rainfall over Queensland’s mining regions during the

2010/2011 wet season severely affected the industry. Huge volumes of

water poured into pits and leaked into underground areas. Following

years of drought, some mines had been designed to catch as much runoff

as possible.1 Storage facilities and dams became so full that operators

were forced to pump excess water into pits.2 Access to equipment, storage

facilities and monitoring sites was cut.3 Gigantic mining equipment was swamped by floodwaters.

Eighty-five per cent of Queensland coal mines had to either restrict production or close entirely.4 In May 2011, Queensland’s coal mining sector had recovered to only 75 per cent of its pre-flood output.5 The economic repercussions of these events were a loss of $5.7 billion6 (2.2 per cent)7 in Queensland’s gross state product for the financial year ending June 2011, and a reduction in royalties received by the Queensland Government.

In early 2011, the Premier indicated to the peak mining industry body, the Queensland Resources Council, that her government was committed to the successful recovery of the coal industry. The Premier said that all agencies had been instructed to facilitate a return to full production capacity at the earliest opportunity.8 Inherent in this commitment was a tension between environmental and economic objectives, the resolution of which fell to the Department of Environment and Resource Management (DERM) in its administration of the Environmental Protection Act 1994. The Act has, as its object, the protection of the environment while allowing development.9 By the time of the Premier’s letter, DERM had, in fact, already been au

–  –  –

The processes by which DERM put the Premier’s commitment into effect, both before and after it was publicised, were the subject of many submissions to the Commission. Mining companies and the Resources Council complained of delays, impossible conditions and an agency hesitant to take an expansive view of its powers to assist their recovery.10 Environmental groups expressed concern that DERM’s actions resulted in harm to ecosystems.11 DERM, for its part, contended that it had struck an appropriate balance between the competing interests by allowing the release of water from mines under strict conditions.12 Those submissions were the impetus for a confined examination of DERM’s response to flooding at mine sites and the use of its legislative powers under the Environmental Protection Act. The Commission has not conducted a comprehensive investigation into the mining industry in Queensland. The fact that only a limited number of recommendations are directed at mining companies should not, therefore, be interpreted as an endorsement of existing flood preparedness and response activities within that industry.

In order to examine DERM’s response, the Commission selected seven case examples:

• Hail Creek mine, operated by Rio Tinto Australia, an open cut coal mine situated near Mackay13

• Rolleston mine, operated by Xstrata Coal Queensland, an open cut thermal coal mine located 275 kilometres due west of Gladstone, approximately 16 kilometres from the town of Rolleston14

• the Ensham mine, an open cut coal mine approximately 40 kilometres east of Emerald in Central Queensland15

• the Moranbah North mine, operated by Anglo American Metallurgical Coal Pty Ltd, an underground coal mine 15 kilometres north of Moranbah16

–  –  –

Water is required to undertake most mining activities. Coal miners use it to process and wash coal and suppress dust.20 At coal seam gas projects, saline water is extracted from coal seams in the process of obtaining the gas.21 If the gas is not exiting the coal seam quickly enough, water is used in ‘fracking’, a process in which water is inserted into coal seams at high pressure to fracture the rock, allowing the gas to escape.22 Other types of operations, such as the Century lead and zinc mine, use water to separate minerals from a slurry of mined ore.23 Whatever role it plays, water used in, or resulting from, mining operations is likely to come into contact with contaminants, such as salts and metals.24 As a result, it will often be of lower quality than fresh water in rivers and creeks. In light of water’s status as a tool used in mining operations and a product of such activities, most mines have facilities to store both fresh water and contaminated, or mine-affected,25 water. During times of flood, storage facilities of this type may be overwhelmed by the influx of water.

The Environmental Protection Act sets up the regulatory framework for mining companies in Queensland. A miner must have an environmental authority, the terms of which are set by DERM. Environmental authorities deal with, among other things, water management, including the circumstances in which an operator may discharge mineaffected water into natural watercourses. Mining companies are voluntary participants in the industry. It is their responsibility to ensure that they are able to comply with the environmental authority conditions and any other requirements set by DERM. Generally speaking, they have the technical and financial ability to do so. DERM, as the regulator, has responsibility for setting and enforcing the conditions under which mining may take place. In accordance with the Act’s object of allowing ecologically sustainable development,26 DERM must set reasonable and effective conditions that allow mining to occur in an environmentally sustainable manner. As part of this, DERM has a responsibility to address requests for the relaxation of environmental authority conditions in a predictable and consistent manner. This responsibility, and the way it was discharged by DERM during flooding, was the focus of the Commission’s investigation.





In addition to its investigation into DERM’s response to flooding at active mine sites, the Commission considered the effect of flooding on one abandoned mine, Mt Oxide mine: see section 13.8.3.

13.1 Preparation for the 2010/2011 wet season Preparation for flooding at a mine site begins well before the wet season. Mine operators are required to produce water management plans for DERM’s approval. Mines are able to deal with excess water in a range of ways, including building infrastructure such as water storage and tailings dams, desalination and treatment plants and diversion channels. Emergency action plans and flood procedures may be developed. A mine operator’s preparation for flood may include audits of the operator’s capacity to respond quickly to flood and checks to ensure equipment is functional. There has been no attempt to consider whether all such measures were appropriately adopted at each mine site – that would be a formidable task. The Commission has focussed on the two aspects of preparation that were squarely raised on the material before it: the response to the Bureau of Meteorology’s forecast in October 2010 that above median rainfall was expected for much of Queensland, and DERM’s pre-wet season inspections.

13.1.1 Response to Bureau of Meteorology seasonal forecast Surprisingly, not all of the operators of case study mines were aware that the Bureau of Meteorology had forecast that the 2010/2011 wet season was likely to involve above median rainfall. None was provided with the seasonal forecast by DERM, or the Bureau itself.27 The forecast was available on the Bureau’s website. It is not DERM policy to provide forecast information to operators.28 It was not until December 2010 that Rio Tinto, for example, realised that a significant wet season might be approaching.29 The operators of Century mine were aware of the general thrust of the Bureau’s forecast in the second half of 2010, but had no specific advice about the Gulf region in which that mine is located.30 Others did obtain and use forecast information: from March 2010, Xstrata had a staff member reviewing and distributing to employees publicly available weather forecast information for the Rolleston coal mine, including seasonal, weekly and daily forecasts.31 352 Queensland Floods Commission of Inquiry | Final Report Very few specific actions were taken by the operators of the case study mines in response to the Bureau forecast.

One operator which did react was Anglo American; it undertook a pre-wet season review at its Capcoal mine which identified risks and recommended infrastructure upgrades,32 in consequence of which Anglo purchased additional pumping equipment.33 Most companies took at least some action to implement their water management plans and deal with issues arising from previous wet seasons. Ensham, which had experienced significant inundation in 2008, constructed levees to 13 Mining protect it from a flood with an average recurrence interval of 1000 years in the Nogoa River.34 It had also installed additional pipe infrastructure.35 Arrow Energy was building additional dams and planned to build a water treatment plant.36 Xstrata implemented a system of levees and diversion channels to move water away from mine pits,37 and responded to short-term forecasts of rainfall of over 50 millimetres by checking diversion channels and pumps and blocking off ramps that might allow water to enter operational pits.38 Representatives from MMG Century and Anglo American indicated that seasonal forecasts did not provide enough lead time to build infrastructure to cope with flooding.39 That is true for long term solutions to the threat of flood.

Other measures, such as checking pumps and drainage channels or auditing response capability, do not require such lead times. Knowledge of forecasts can help operators to prepare for the wet season ahead, for example by preparing applications for transitional environmental programs and opening lines of communication with DERM.

Mine operators should take primary responsibility for obtaining and reviewing the best forecast information available. It would be sensible for operators of sites at high risk of flood to obtain region specific forecast information (both seasonal and short-term) directly from the Bureau of Meteorology. The Bureau does provide such a service for some mines currently.40 That said, it should not be difficult for the Queensland Government, through DERM or another agency, to provide all operators with any seasonal forecast information it obtains from the Bureau of Meteorology. This would be particularly appropriate if, as was the case prior to the 2010/2011 wet season, the information held by the Queensland Government extended beyond that made available to the public on the Bureau’s website.

Recommendations

13.1 Mine operators should obtain all public seasonal forecasts issued by the Bureau of Meteorology relevant to the regions in which their operations are located.

13.2 Any mine operator of a site at high risk of flood should obtain the best forecast information available (seasonal and short term) for the region in which the mine is located.

13.1.2 Pre-wet season inspections Prior to each wet season, DERM pursues a system of inspections for those mines it considers at risk of experiencing difficulty coping with excess water.

Site inspections are planned to occur as close as possible to, but in advance of, the start of the wet season, which DERM puts at 1 November.41 Of the seven case examples considered by the Commission, DERM inspected five sites. The Moranbah North coal mine was inspected on 6 October;42 Hail Creek mine on 16 November;43 Ensham mine on 17 November;44 and Dawson Central, North and South mines on 9 November.45 The Century mine was not physically inspected until 23 and 24 November, and disputes about the water management at the site were not settled between the operator and DERM until 19 January 2011.46 The Commission’s seven case studies do not permit generalisations to be made about whether DERM’s inspection system is comprehensive or effective, but plainly enough indicate that in some cases the 1 November date was not met.

The Commission acknowledges that physical inspections are only one part of DERM’s preparation for wet seasons.

The process, however, could be improved in a number of ways.

The first concerns the process by which DERM determines which sites to inspect. DERM assesses risk by reference to its regional officers’ knowledge of the site, history of compliance and known water management issues.47 Given the reliance on officers’ knowledge, it is impossible to list exhaustively factors that are taken into account. However,

–  –  –

The second opportunity for improvement lies in timing. DERM should ensure its risk assessment process, undertaken in preparation for a wet season, is conducted in time for it to be able to inspect the sites it identifies as requiring inspection, and for operators to implement solutions to any problems identified, by 1 November.

Inspections in late November are too late to have any useful effect for the wet season. And while DERM considers the wet season to begin on 1 November, heavy rain and flooding can occur before that date. DERM’s inspection program should not be confined to the period immediately preceding each wet season. Risk assessment and site inspection should be a continuous undertaking by DERM. The assessment of the risks posed by a particular site should be reviewed if circumstances change (for example a seasonal forecast is released, a non-compliance event occurs or environmental harm is caused). The factual basis upon which risk assessments are made should be reviewed on a regular basis.

–  –  –

13.2 Flooding at mine sites Substantial rainfall was experienced during the 2010/2011 wet season at all the case study mines.

At the end of December 2010 at Hail Creek mine, water storages were calculated to be approximately 98 per cent full; by the end of January 2011, the storage facilities were at 105 per cent capacity.49 The mine was storing approximately seven gigalitres of water on-site in dams and pits.50 Water was continually pumped from high priority areas into low priority areas around the site in an effort to maintain some operations.51 Rio Tinto sought, and was granted, authorisation by DERM to release water into surrounding watercourses in January 2011.52 All sale contracts were suspended by reason of the wet weather from 24 December 2010.53 Pits used for the purpose of storing water were unable to be mined until dewatering activities had begun; supplies of explosives were delayed;



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