Malcolm Turnbull calls for New South Wales parliamentary inquiry into ‘inadequate’ mine remediation obligations

Former Prime Minister Malcolm Turnbull is calling for a New South Wales parliamentary inquiry into “inadequate” coal mine remediation obligations.

This week’s state budget included $ 108 million over the next ten years to clean up the state’s old abandoned mine sites.

Most of the targeted mines were between 50 and 100 years old, but Mr Turnbull said the problem was more contemporary.

In New South Wales, a reclamation bond must be paid by the mining company before exploration and production begins.

The security deposit covers the full cost of all mine rehabilitation and closure activities required if a mining company defaults on its rehabilitation obligation.

The Ministry of Urban Planning and the Environment provides a reclamation cost calculator to help companies calculate the bond amount.

A 2017 report from the NSW Audit Office identified weaknesses in the current tool for not allowing for cost increases over time, inability to cover management costs, and insufficient allocation for the management of the long term site.

Mr Turnbull cited a recent report from the Australian Institute which found that filling the voids in the Upper Hunter alone would cost between $ 12 billion and $ 25 billion, while the NSW government held $ 3.3 billion. billion dollars in state mining bonds.

Mr Tunbull said the state does not have enough money to cover the state’s sanitation needs.

“If the government doesn’t raise the level of obligations, substantially, very substantially when these mines finally come to an end – and it could be an abrupt end – you will have this enormous devastation in the landscape that the taxpayer will eventually endure. pay the bill, ”he said.

Sydney water concerns

In Illawarra, Lock the Gate Alliance questioned the calculated $ 12.3 million bond for Wollongong Coal Limited’s (WCL) Russell Vale coal mine.

The mine has been in care and maintenance since 2015 and its owners, Indian company Jindal Steel and Power Limited, have $ 1 billion in debt.

Last year it received approval for an expansion, and as part of the review, the resource regulator noted a cost-benefit analysis (CBA) of the rehabilitation if the expansion was not approved.

“In the ACA baseline scenario, WCL will be forced to rehabilitate the Russell Vale coal mine, including underground access points and Pit Top facilities, which are estimated to spend $ 215 million in 2020, with no future operation at Russell Vale. “

Alliance NSW coordinator Georgina Woods said the company already has an unfinished rehabilitation of previous operations,

“We are concerned that the bond does not cover future subsidence that could occur in special areas of the Sydney drinking water catchment area by geological events that occur after the abandonment of the mine site,” he said. she declared.

Upper chamber probe

Mr Turnbull said he believed the NSW Upper House should investigate the terms of reparation and the obligations.

“Ask independent quantity surveyors to look at these obligations and compare them to the work that would actually be involved and just provide an independent audit,” he said.

“Regulators tend to get captured by the industries they regulate, there is actually a term for that – regulatory capture.

“They get too close, they want to be helpful, they don’t want to be obstructive, so there is always a role for an independent look at relationships like this,” he said.

Ms Wood said that although there had been attempts to improve the mine remediation cost calculator, concerns remained.

“The bonds only cover the amount of work needed to bring the mine to the point where its title can be relinquished,” she said.

“What worries us are the longer-term unintended consequences of mining such as subsidence, acid mine drainage and changes in soil structure.

MLC shooters, fishermen and farmers Mark Banasiak chairs the Upper House committee that would be responsible for any investigation into the matter.

“I would suggest that if Mr Turnbull so wishes he draft a set of terms of reference and suggest we look at this,” he said.

“I would like to note that we have several investigations underway, one in particular on the lumber industry which will probably take us to the middle of next year.”

In a statement, the New South Wales Regional Department said the state’s mine approval process was strong, with strict rules for the remediation of mine sites.

Mining projects in New South Wales are approved through one of the world’s most robust merit review processes, which carefully consider and weigh the social, economic and environmental impacts of any proposal and criteria. specific to the project.

As part of the approval process, mining projects are approved with rehabilitation conditions that must be met, in exchange for consent to mining within the state.

When final voids are approved, they are subject to strict remediation requirements that include remodeling and other measures to minimize the size and depth of this void and strict revegetation and groundwater management controls.

All title holders must provide a rehabilitation security deposit that covers the full cost of the rehabilitation.

Rehabilitation obligations are legally enforceable and mining companies are responsible for all rehabilitations, even after the mine closes.

Rehabilitation bonds and security deposits are regularly revalued and the amount held as bond has increased by approximately $ 1 billion from $ 2.2 billion to $ 3.3 billion in the past 5 years.

It is extremely rare that the government has to access a bond.