state significant development assessment mt …...address the issues raised by the court in its...

STATE SIGNIFICANT DEVELOPMENT ASSESSMENT Mt Thorley Continuation Project (SSD-6465)

Secretary’s Environmental Assessment Report Section 89E of the Environmental Planning and Assessment Act 1979

Mt Thorley Continuation Project Environmental Assessment Report

Cover Photos: Images sourced from the Mount Thorley Operations 2014 Environmental Impact Statement prepared by EMM. © Crown copyright 2014 Published November 2014 NSW Department of Planning and Environment www.planning.nsw.gov.au Disclaimer: While every reasonable effort has been made to ensure that this document is correct at the time of publication, the State of New South Wales, its agents and employees, disclaim any and all liability to any person in respect of anything or the consequences of anything done or omitted to be done in reliance upon the whole or any part of this document.

http://www.planning.nsw.gov.au/

NSW Government Planning & Environment

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EXECUTIVE SUMMARY The Mt Thorley mine is a large open cut coal mine about 10 kilometres southwest of Singleton in the Hunter Valley, operated by Mt Thorley Operations Pty Ltd (MTO). It has been operating for more than 30 years, and is one of the several mines operating in the region, with others including the Hunter Valley Operations, Wambo and Warkworth mines to the north, and the Bulga mine to the south. The Warkworth mine is located directly to the north of the Mt Thorley mine, and the two mines share a cross-linked ownership structure, with both mines ultimately managed by Coal and Allied Ltd (a subsidiary of Rio Tinto Ltd). Given this cross-linked structure, the two mines have been operated as an integrated mine complex since 2004 – known as the Mt Thorley-Warkworth (MTW) mine complex. Under these arrangements, the mines share employees and surface infrastructure, and are connected via a series of haul roads (with bridges over Putty Road), conveyors and pipelines. The mines are also interdependent in an operational sense – with coal, overburden, tailings and water being moved between them. Notwithstanding the integrated operations, the two mines operate under separate development consents, with Mt Thorley currently operating under a Ministerial consent granted in June 1996. In February 2012, the Planning Assessment Commission approved the Warkworth Extension Project, which involved: • continuing the existing operations and extending the north and west pits further west, covering an

additional 750 hectares, through Wallaby Scrub Road and Saddleback Ridge and through some of the green offset areas set aside under the existing development consent;

• extending the life of the mine by a further 11 years and extracting an additional 200 million tonnes of run-of-mine (ROM) coal;

• matching existing production levels, processing and coal transport arrangement; and • continued integration with Mt Thorley mine. However, in April 2013, the NSW Land and Environment Court overturned this approval, and refused the project. Warkworth is now proposing to develop a modified version of the extension project, which seeks to address the issues raised by the Court in its judgment on the Warkworth Extension Project. This involves lodging two development applications for the modified proposal: one for the Warkworth components of the proposal (the Warkworth Continuation Project), and the other for the Mt Thorley components (the Mt Thorley Continuation Project). The Mt Thorley Continuation Project has three major components: • continued extraction of coal from its already approved mining operations to secure an additional

29 million tonnes of coal; • backfilling existing mining voids on site, principally with overburden, coarse rejects and tailings from

the proposed expansion of the Warkworth mine (Warkworth Continuation Project); and • augmenting and using the existing infrastructure to support the Warkworth Continuation Project. It has a capital investment value of $4 million, and would provide continued employment for 120 employees. However, together with the Warkworth Continuation Project it would facilitate the extraction of 260 million tonnes of coal, and generate royalties of around $617 million (in present value terms). The Department exhibited the development application for the project concurrently with the exhibition of the Warkworth Continuation Project from 25 June until 6 August 2014. During the exhibition period, the Department received 457 submissions on the project, 7 from public authorities, 21 from special interest groups, and 429 from the general public. None of the public authorities object to the project, and many have recommended conditions to minimise the impacts of the project. However, the split of those for and against the project among the



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remaining submissions was relatively even with 57% of the general public (including special interest groups) supporting the project. Given the highly integrated nature of both the Mt Thorley and Warkworth Continuation Projects, many of the submissions on the Mt Thorley project were dominated by comments on the Warkworth project. In fact, very few of the submissions received were actually focused on the specific merits of the Mt Thorley project, or were only focused on it to the extent that it would facilitate the larger Warkworth project or exacerbate any impacts of the project. Submissions in support of the projects highlighted the potential economic and social benefits of the project. Those against the project were mostly concerned about the potential dust, noise, blasting and visual impacts of the project itself, as well as cumulatively with the Warkworth Continuation Project. In particular, these were opposed to the fact that the project would facilitate the Warkworth Continuation Project, and argued that the project would have unacceptable impacts on the amenity and social cohesiveness of the Bulga Village. The Department assessed of the merits of the project, in accordance with the statutory requirements of the Environmental Planning and Assessment Act 1979 (EP&A). This assessment has found that even with the implementation of all reasonable and feasible mitigation measures, there would be some residual noise, dust and visual impacts. While the project would result in exceedances of the project specific noise levels under the NSW Industrial Noise Policy at up to 59 residences, 53 of these exceedances are predicted to be negligible (1 to 2 dB(A)), and would not be discernible to most people, and a further 3 would occur on residences that are already subject to voluntary acquisition rights under the existing Mt Thorley planning consent. Consequently, the project is only likely to result in significant noise impacts on 1 additional residence and moderate noise impacts on a further 2 residences. These residences are all in the Mt Thorley area to the east of the existing mine, and are already affected by a range of industrial activities. The Department has recommended that the owners of these residences be granted voluntary acquisition and/or mitigation rights, in accordance with the NSW Government’s Voluntary Land Acquisition and Mitigation Policy. In relation to dust, the prevailing winds in the area are from the south, southeast and northwest (see Appendix G to the EIS). This means most of the project’s dust impacts are likely to be dispersed over existing mines rather than towards the Bulga village. The project is predicted to comply with all the relevant annual average air quality criteria at all properties surrounding the mine, apart from a single property in the Warkworth Village. This property is already significantly affected by the dust impacts of both the Wambo and Warkworth mines, and the project’s contribution to any exceedances would be negligible. The Department has therefore concluded that any impacts on this property should be regulated through conditions on the Wambo and/or Warkworth planning approvals. While the assessment shows there could be some exceedances of the 24-hour average PM10 criteria in the area surrounding the mine, the Department has sought additional information on these potential exceedances and is unable to determine whether they would be significant or not at this stage. In relation to visual impacts, the Mt Thorley mine is generally shielded from views on three sides by the Warkworth mine to the north, the Mt Thorley Industrial Estate and rolling hills to the east, and the Bulga village to the south. The main views of the mine are therefore from the west, including large parts of the Bulga Village. For many years now, several residents of the Bulga village have had direct views of the Mt Thorley and/or Bulga mining operations as they are dominant features in the landscape to the east of the village, and are particularly visible from the elevated foothills of the village. While these residents have direct views of mining operations, these views are mitigated to some extent by the fact that the village is at least 3 kilometres away from these mining operations.



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The project involves the progressive backfilling of existing voids on site, and the creation of a final landform that would be integrated with the final landforms at the adjoining Warkworth and Bulga mines. The Department considers this landform to be a significant improvement over the current approved final landform of the mine, which includes the creation of a narrow valley leading to a large final void. The visual impact assessment shows that the new landforms created by the project would be clearly visible from large parts of Bulga Village. While these views would be mitigated in the medium to long term as the landforms are shaped and revegetated with woodland, there is very little that could be done to mitigate these views in the short to medium term due to the natural topography of the area, just as there is little that can be done to mitigate the existing views of the mine. Nevertheless, the Department has recommended that MTO be required to implement additional visual mitigation measures (such as landscaping treatments and screening) to the owner of any residence that either has, or would have, significant direct views of the mining operations on site. This would be an improvement of the current situation. The Department has found that the remaining impacts of the project would be acceptable, and could be suitably controlled through appropriate conditions of consent. To ensure this occurs, the Department has recommended conditions that require MTO to avoid, minimise and/or offset the predicted residual impacts of the project, and comply with applicable contemporary criteria and standards. The Department considers that these conditions are consistent with current best practice for the regulation of mining projects in NSW. Finally, the Department has weighed the residual impacts of the project against its social and economic benefits. This assessment has found that because the project is required to facilitate the neighbouring Warkworth Continuation Project, it would result in significant social and economic benefits for both the local area as well as the State as a whole. The project would enable a further 29 million tonnes of coal to be mined. While this resource is not significant in either absolute or relative terms, it has a market value of between $2.5 and 3 billion, and would generate royalties of around $50 million (in net present value terms) for the NSW Government. Together with the Warkworth Continuation Project, it is predicted to generated royalties of around $617 million. These royalties would be spent on providing infrastructure and services to the broader community. The project would also provide continued employment for around 120 workers at the Mt Thorley mine, and the continued employment of around 1,300 workers at the larger MTW mine complex. The economic assessment of both projects estimates the two projects would have a net economic benefit of around $1,488 million. The Department has tested the sensitivity of these estimates to changes in key variables, such as the price of coal, and concluded that even if these variables change significantly over time, the benefits of the project would remain positive. The Department has concluded that the project would generate a number of positive benefits and that the predicted impacts can be effectively managed through the implementation of strict conditions. Consequently, the Department considers that the project is in the public interest and should be approved, subject to stringent conditions. Finally, the Department acknowledges that additional information is required on a number of aspects of the assessment. However, the Department does not believe that the provision of this information would materially alter the conclusion that the project’s benefits outweigh its residual costs, and that it is in the public interest and should be approved, subject to stringent conditions.



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1 PROPOSED PROJECT 1.1 Background The Mt Thorley mine is a large open cut coal mine, located about 10 kilometres southwest of Singleton in the Upper Hunter Valley (see Figure 1), operated by Mt Thorley Operations Pty Ltd (MTO).

Figure 1: Regional Context



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The mine has been operating for more than 30 years, with mining operations commencing in 1981, and is one of the several mines operating in the area, with others including the Hunter Valley Operations, Wambo and Warkworth mines to the north, and the Bulga mine to the south. The Warkworth mine is located directly to the north of the Mt Thorley mine, and the two mines share a cross-linked ownership structure, with both mines ultimately managed by Coal and Allied Ltd (a subsidiary of Rio Tinto Ltd). Given this cross-linked structure, the two mines have been operated as an integrated mine complex since 2004 – known as the Mt Thorley-Warkworth (MTW) mine complex. Under these arrangements, the mines share employees and surface infrastructure, and are connected via a series of haul roads (with bridges over Putty Road), conveyors and pipelines. The mines are also interdependent in an operational sense – with coal, overburden, tailings and water being moved between them. Notwithstanding the integrated operations, the two mines operate under separate development consents, with Mt Thorley currently operating under a Ministerial consent granted in June 1996. The MTW mine complex is located in an area that is dominated by large-scale and intensive mining operations, which have significantly altered the natural landscape since the late 1970s. The closest mining operations to the complex (see Figure 1) include the: • Bulga open cut and underground mine complex, which is located to the south of the MTW

complex and is allowed to extract up to 26.2 million tonnes (Mt) of run-of-mine (ROM) coal a year; • Wambo open cut and underground mine complex, which is located to the northeast of the MTW

complex and is allowed to extract up to 14.7 Mt of ROM coal a year; and • Hunter Valley Operations (HVO) mine complex, which is located to the north of the MTW complex

and is allowed to extract up to 36 Mt of ROM coal a year.

A consequence of this mining and industrial activity is that most of the land in the vicinity of the MTW mine complex is owned by one mining company or another. Nevertheless, it is important to recognise that large tracts of land surrounding these mining operations are used for a range of agricultural activities, with the land along the Hunter River and Wollombi Brook being used for intensive agriculture and the rest of the agricultural land being used primarily for grazing (see Figures 1 and 2). One of the largest stands of remnant vegetation on the Hunter Valley floor is located immediately to the west of the complex (see Figure 2). This vegetation forms part of a fledgling vegetation corridor across the valley floor (which has been heavily cleared over the last century) between the Wollemi and Yengo National Parks to the southwest of the complex and the Barrington Tops National Park, which is located on the northern edge of the valley floor. The nearest settlement to the complex is the Bulga Village, which is located about 3 km to the west of the MTW mine complex. The Bulga village lies at the base of an escarpment of Wollemi National Park to the west, and the Wollombi Brook to the east (see Figure 2).The village has a population of about 358 residents, with a population growth rate of 11.5% between 2006 and 2011. The majority of residences are located off The Inlet Road, with residences at the western limit of The Inlet Road being slightly elevated and having direct views of the Bulga and Mt Thorley overburden dumps. Bulga Village also includes a range of public facilities including a pub, service station and café, police station and rural fire brigade. There are also several other rural-residential properties located in close proximity to the complex, including Mt Thorley to the east; Hambledon Hill, Wylies Flat and Gouldsville to the northeast; Warkworth to the northwest; and Putty Road to the west (see Figure 2). Key infrastructure in the area includes the: • regional road network, including two State Roads (the Golden Highway and Putty Road) and

number of local roads (Wallaby Scrub, Charlton and Broke Roads); • private rail spur lines linking the Bulga, Wambo and MTW mines to the Great Northern Railway to

the south of Singleton; • Mt Thorley Industrial Estate and coal loader, located directly to the east of the complex; and • Redbank Power Station, located directly to the north of the complex (see Figure 3).



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Figure 2: Land Ownership and Nearest Residences



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1.2 Existing Mt Thorley Mine The approved operations of the Mt Thorley mine and Warkworth mine are summarised in Table 1 below and depicted in Figure 3. The Mt Thorley mine is comprised of a large open cut mining pit in the western end of the mining lease, overburden dumps behind the mining void, and a range of surface facilities in the eastern end of the mining lease including the Mt Thorley Coal Preparation Plant (CPP). These surface facilities are located adjacent to the Mt Thorley Coal Loader, which operates under a separate development consent. Essentially, coal is extracted from the open cut pit and taken to the CPP for processing before being railed to the Port of Newcastle for export via the Mt Thorley Coal Loader. Overburden, tailings and coal rejects are placed in the mining pit behind the advancing mining pit.

Figure 3: Existing Operations

Redbank Power Station



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Table 1: Approved Operations Mt Thorley-Warkworth Mining Complex Aspect Mt Thorley Warkworth

Company Mt Thorley Operations Pty Limited Warkworth Mining Limited Operations Commenced 1981 Commenced 1981 Consent DA 34/95, which expires in 2017 DA 300-9-2002-I, which expires in 2021 Remaining Life 3 years 7 years Mining Reserves 29 Mt remaining 128 Mt remaining Mining Areas 3 open cut pits (Loders, Abbey Green North

& Abbey Green South), with mining operations moving west towards Charlton Road

5 open cut pits (North, West, CD, Woodlands and South) with mining operations moving to the west towards Wallaby Scrub Road

Extraction Rate Approved: up to 10 Mt ROM coal a year Actual in 2013: 5.4 Mt

Approved: up to 18 Mt ROM coal a year Actual in 2013: 13.3 Mt

Coal Processing Coal is processed at the Mt Thorley CPP, which can process up to 10Mt ROM coal a year, and the Warkworth CPP

Coal is processed at the Warkworth CPP, which can process up to 13 Mt ROM coal a year, and the Mt Thorley CPP

Coal Transport Coal is transported to the Mt Thorley Coal Loader by haul road and conveyor, and then railed to export markets

Coal is transported to the: • Mt Thorley Coal Loader by haul road and

conveyor, and then railed to export markets

• Redbank Power Station by conveyor Overburden In-pit emplacement behind advancing mining

operations at the Mt Thorley mine In-pit emplacement behind advancing mining operations at the Warkworth mine

Rejects Disposal Coarse reject and tailings are disposed of in the Abbey Green North and South pits

• Coarse reject is placed in the in-pit emplacement areas at both the Warkworth and Mt Thorley mines

• Fine reject (tailings) is stored in tailings facilities on site

• Dewatered tailings is transferred to the Redbank Power Station by conveyor

• Ash from Redbank Power Station is transferred by pipeline to the tailings storage facilities at the Warkworth mine

Infrastructure • Mt Thorley CPP • Site access roads and internal haul

roads • Conveyor from Mt Thorley CPP to Mt

Thorley Coal Loader • Vehicle wash bays and water truck fill

points • Workshop, stores, and sewage

treatment infrastructure • Office building and parking

• Warkworth CPP • Site access roads, internal haul roads,

and three bridges over Putty Road (only two constructed)

• Conveyors to the Mt Thorley Coal Loader and Redbank Power Station

• Heavy vehicle workshops and washing facilities

• Bulk oil and fuel storages, general stores and workshop

• Coal stockpiles, storage hoppers and crushers

• Electricity supply infrastructure • Office building and parking

Water Management

Water management system including process water and sediment dams, water and tailings pipelines and water sharing infrastructure with the Warkworth mine

Water management system including process water and sediment dams, pipelines and water sharing infrastructure with the Mt Thorley and Hunter Valley Operations mines

Biodiversity Offsets

None Offset areas to the west and north of the approved mining operations covering 1,646 hectares with: • 757 ha in 2 non-disturbance areas; • 889 ha in 3 habitat management areas.

Rehabilitation Rehabilitate site to well treed grazing land. 870 ha rehabilitated across MTW complex at the end of December 2013.

2,299 ha on site rehabilitation comprising a combination of woodland, open woodland and pasture. 870 ha rehabilitated across MTW complex at the end of December 2013.

Employment 1,300 with the Warkworth mine 1,300 with the Mt Thorley mine



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1.3 Mt Thorley Continuation Project MTO is proposing to continue existing open cut mining operations at Mt Thorley for a period of 21 years from the date of any consent (nominally until 2035). The Mt Thorley Continuation Project involves the continued extraction of coal from Loders Pit and Abby Green North Pit (which is located adjacent to the existing surface facilities) at a rate of up to 10 Mt of ROM coal a year. Extraction of this resource is expected to continue until 2022, however a 21 year consent period is sought to enable the ongoing provision of services to Warkworth mine (i.e. equipment, personnel, overburden, water, coal rejects and coal preparation) which is critical to the viability of the Warkworth mine. The proposal is required to prevent the sterilisation of the 29 Mt coal resource that is approved for extraction but cannot be mined during the current consent period, which expires in 2017. In addition to continuing existing operations at Mt Thorley, MTO is also seeking a number of minor changes to the consent, including: • upgrading the Mt Thorley CPP to facilitate an increased maximum throughput of 18 Mt of

ROM coal a year; • transferring overburden between Mt Thorley and Warkworth mines to assist in the rehabilitation

and final landform design of the MTW complex; and • upgrading the MTW integrated water and tailings management systems. The major components of the Mt Thorley Continuation Project are summarised below in Table 2 and depicted in Figures 4 to 9. The project is described in full in MTO’s Environmental Impact Statement (EIS) and Response to Submissions (RTS) (see Appendices C and D). Table 2: Major Components of the Project Aspect Description Project Summary • Continuation of existing and approved development on site;

• Maintaining maximum coal extraction rates at 10 Mt of ROM a year; • Receiving coal, tailings and overburden from the Warkworth mine; • Receiving overburden from the Bulga mine; • Water sharing with other mines; • Minor infrastructure upgrades; and • Progressively rehabilitating the site.

Project Life 21 years Mining & Reserves No change. Extraction of remaining coal resource (about 29 Mt of ROM coal). Mining Areas No change. Loders Pit and Abby Green North Pit. Consent Boundary Minor amendment to exclude a 63 ha area that would be included in the proposd

Warkworth extension area (see Figure 4). Extraction Rate No change. Maximum extraction rate would remain 10 Mt of ROM coal a year. Coal Processing Increased throughput at the Mt Thorley CPP from 10 Mt to 18 Mt a year of ROM coal. Coal Transport No change. Product coal would continue to be transported to the Mt Thorley Coal Loader

by haul road and conveyer, and transported by rail to export markets. Overburden Emplacement

Overburden would continue to be emplaced in-pit behind the advancing mining operations. In addition, overburden from Warkworth mine is proposed to be transferred to Mt Thorley mine for use in development of the final landform.

Rejects Disposal Coarse rejects and tailings would continue to be disposed of in-pit and at tailings storage facilities at either Warkworth or Mt Thorley mines. The integrated MTW tailings management system would be upgraded, including: • use of the northern part of Loders Pit as a tailings storage facility after completion of

mining; and • wall lift to centre ramp tailings storage facility to increase its capacity.

Infrastructure • Upgrade the Mt Thorley CPP to facilitate an increased maximum throughput of 18 Mt of ROM coal.

• Potential upgrade and augmentation of existing surface infrastructure and mobile and in-pit facilities.

Water Management

Upgrade the integrated MTW water management system, including: • upgrade the approved discharge point, and increase the rate of discharge into

Loders Creeks from 100ML a day to 300ML a day via the Hunter River Salinity Trading Scheme (HRSTS);

• transfer and accept mine water from neighbouring mines including Warkworth, Bulga Coal Complex, Wambo mine and Hunter Valley Operations; and



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Aspect Description • increase the storage capacity of the southern out-of-pit dam from 1.6 GL to 2.2 GL.

Rehabilitation Backfill Loders Pit and establish at least 483 ha of EEC woodland on the rehabilitated Mt Thorley mine (2,100 ha including the rehabilitated Warkworth mine) (see Figure 9).

Employment Approximately 120 long term full time positions (1,300 including Warkworth mine) Capital Value Approximately $4 million ($719 million including Warkworth mine) Royalties Approximately $50 million ($617 million including Warkworth mine)

Figure 4: Project Layout



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Figure 5: Year 3 Mine Plan



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Figure 9: Proposed Final Landform



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1.4 Warkworth Continuation Project In 2010, Warkworth lodged a major project application (09_0202) under the former Part 3A of the Environmental Planning and Assessment Act 1979 (EP&A Act) to extend existing open cut operations to the west. The project – known as the Warkworth Extension Project – involved: • continuing the existing operations and extending the north and west pits further west, covering an

additional 750 ha, through Wallaby Scrub Road and Saddleback Ridge and through some of the green offset areas set aside under the existing development consent;

• extending the life of the mine by a further 11 years and extracting an additional 200 Mt of ROM coal; and

• matching existing production levels, processing and coal transport arrangements, and continued integration with Mt Thorley mine.

On 3 February 2012, the NSW Planning Assessment Commission (PAC), as delegate for the then Minister for Planning and Infrastructure, approved the Warkworth Extension Project, subject to stringent conditions. On 9 August 2012, Warkworth was granted approval from the Commonwealth Minister for the Environment for the extension project under the Environmental Protection and Biodiversity Conservation Act 1999 (EPBC Act). A local community group opposed to the mine extension, the Bulga Milbrodale Progress Association (BMPA), subsequently appealed against the merits of the Ministerial approval in the NSW Land and Environment Court (LEC). On 15 April 2013, the LEC upheld the merit appeal and refused the Warkworth Extension Project on the following key grounds: • that the project would likely have significant adverse impacts on biological diversity, including on

four endangered ecological communities (EEC), but in particular on the Warkworth Sands Woodland EEC, with the impacts not adequately mitigated by the project or the proposed conditions of approval;

• in relation to noise, that: o the noise criteria proposed in the conditions of approval are not appropriate; o the noise impacts would be intrusive and adversely affect the reasonable use, enjoyment and

amenity of the residents of Bulga and the surrounding countryside; o the noise mitigation strategies are unlikely to reduce noise impacts to levels that would be

acceptable, and that these mitigation strategies may result in greater social impacts; and o the approach of combining noise criteria and noise mitigation strategies for the MTW mine

complex is of doubtful legal validity and would make monitoring and enforcement difficult; • in relation to dust, that:

o no confidant conclusion can be drawn that air quality impacts, particularly dust emissions from the project, will comply with the proposed conditions of the project approval;

o the approach of combining air quality criteria and mitigation strategies for the MTW mine complex is of doubtful legal validity and would make monitoring and enforcement difficult; and

• The project is likely to cause adverse social impacts on individuals and the community of Bulga in that the project would exacerbate the loss of sense of place, and materially and adversely change the sense of community.

Warkworth subsequently appealed some of the legal technicalities associated with the LEC’s judgment in the NSW Court of Appeal. In summary, Warkworth argued that it had been denied procedural fairness by the LEC in respect of a number of factual matters relating to its application and that the LEC had erred in law by failing to have regard to certain matters. The former Minister of Planning and Infrastructure joined Warkworth in its appeal against the LEC’s judgement because the outcome of the LEC’s judgement had implications for the planning system that were broader than this particular project. This appeal was on matters of law, rather than on the merits of the project. On 7 April 2014, the Court of Appeal dismissed the appeal on all grounds, upholding the LEC’s refusal of the project.



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As a consequence of the Court’s judgments, the Ministerial project approval for the Warkworth Extension Project was replaced with the Court’s decision to refuse the project, and the Warkworth mine now operates within the confines of the 2003 development consent. Warkworth is now proposing to develop a modified version of the extension project, which seeks to address the issues raised by the LEC in its judgment on the Warkworth Extension Project. The Warkworth Extension Project sought to facilitate and formalise integration between the Mt Thorley and Warkworth mines, with the Warkworth mining operations proposed to continue using the Mt Thorley mine’s infrastructure and facilities following completion of open cut mining at Mt Thorley in 2017. Given that the LEC was critical of the integrated approach to mine complex management, Warkworth and MTO are now proposing to maintain separate development consents for each mine, and have lodged separate development applications. The Warkworth Continuation Project is addressed under a separate report to this assessment report. Nonetheless, given the related nature of the mining operations, a summary of the Warkworth Continuation Project is provided below (see Table 3). Table 3: Major Components of the Warkworth Continuation Project Aspect Description Project Summary

• Continuation of existing and approved development on site; • Extending approved open cut mining operations further west; • Developing a range of associated infrastructure to support this extension; • Maintaining maximum coal extraction rates at 18 Mt of ROM a year; • Exporting coal, tailings and overburden to the Mt Thorley mine; • Water sharing with other mines; and • Progressively rehabilitating the site.

Project Life 21 years Mining & Reserves

Extraction of an additional 230 Mt of ROM coal, taking the total reserves to around 360 Mt of ROM coal.

Mining Areas The project involves extending the north and west pits further west, covering an additional 698 ha.

Consent Boundary

Expanded to include an additional 63 ha area (previously approved for mining under existing the Mt Thorley consent) (see Figure 4).

Extraction Rate No change. The maximum extraction rate would remain 18 Mt of ROM coal a year. Coal Processing No change. Coal would continue to be processed at the Warkworth CPP (13 Mt a year)

and the Mt Thorley CPP (proposed to increase from 10 Mt to 18 Mt a year). Coal Transport No change. Product coal would continue to be transported by overland conveyor and

along internal haul roads to the Mt Thorley Coal Loader and transported by rail to export markets. Some product coal and beneficiated tailings would continue to be transported by conveyor to the adjoining Redbank Power Station.

Overburden Emplacement

Overburden would continue to be emplaced in-pit behind the advancing mining operations. In addition, overburden from Warkworth mine is proposed to be transferred to Mt Thorley mine for use in development of the final landform.

Rejects Disposal No change. Coarse rejects and tailings would continue to be disposed of in-pit and at tailings storage facilities at either Warkworth or Mt Thorley mines.

Infrastructure • Upgrade and augment existing surface infrastructure, including a services corridor located along the western extension boundary (i.e. access road, water management and power reticulation);

• Construct an underpass below Putty Road between the Warkworth and Mt Thorley mines, or construct the approved third bridge over the road; and

• Close Wallaby Scrub Road and construct an emergency vehicle access road between Putty Road and the Golden Highway (within the services corridor).

Water Management

Upgrade the integrated MTW water management system including: • extend the mine water management system to include the extension of mining; • design changes to the northern out-of-pit dam; and • water sharing between Bulga Coal Complex and Wambo Mine if required. Continued water sharing between the Warkworth mine, Mt Thorley mine, Redbank Power Station and Hunter Valley Operations mine complex.

Cultural Heritage Conservation

Establish the Wollombi Brook Aboriginal Cultural Heritage Conservation Area, located west of the proposed extension area and adjacent to the Hunter River.

Biodiversity The project would disturb 611 ha of vegetation, including 459 ha of EECs and 152 ha of



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Aspect Description Offsets EEC derived grassland. The 2003 Habitat Management Area and Non- Disturbance Area

offsets would also be disturbed, therefore the impacts associated with the 2003 vegetation clearance have been re-offset using current standards. The proposed offset strategy includes the following land-based offsets: • Northern biodiversity offset area – 705 ha; • Southern biodiversity offset area – 303 ha; • Goulburn River National Park – 1,299 ha; • Bowditch property – 520 ha; and • Rehabilitation – 2,100 ha.

Rehabilitation Establish 2,673 ha of rehabilitated land, including at least 1,617 ha of EEC woodland at Warkworth mine (2,100 ha of EEC including the rehabilitated Mt Thorley mine) (see Figure 9).

Employment Approximately 1,187 long term full time positions (1,307 including Mt Thorley mine) Capital Value Approximately $715 million ($719 million including Mt Thorley mine) Royalties Approximately $567 million ($617 million including Mt Thorley mine) Whilst the Warkworth Continuation Project has been assessed under a separate application, it is noted that potential cumulative impacts associated with the Mt Thorley Continuation Project and the Warkworth Continuation project have been considered as part of the assessment for each of the projects. This is consistent with the way the Department considers cumulative impacts for any surrounding mining and/or industrial activities. 1.5 Project Justification MTO has provided a number of arguments to justify the Mt Thorley Continuation Project. These arguments are largely based on the economic and social benefits of the project. Mine Design There are three benefits of the project’s mine design. First, the project is similar to the approved mine plan from a resource extraction perspective. The remaining open cut coal resource would be extracted from both the Loders and Abbey Green North Pits. However, there is one significant difference. The current Mt Thorley consent allows MTO to realign Putty Road and to mine the coal in the north-western corner of the Mt Thorley mining lease (see Figure 4). Under the existing project, this would no longer occur. Putty Road would remain in place, and this coal would be mined as an extension of the Warkworth mine’s existing dragline operations under the Warkworth Continuation Project. Second, the project involves the backfilling of existing voids, and the creation of a significantly improved final land form with woodland vegetation. Finally, the project would maximise the use of existing infrastructure on site, and facilitate the continuation of mining at the Warkworth mine and the extraction of a further 230 million tonnes of coal. Economic and Social Benefits The project would enable a further 29 Mt of coal to be mined. While this resource is not significant in either absolute or relative terms, it has a market value of between $2.5 and $3 billion, and would generate royalties of around $50 million (in net present value terms) for the NSW Government. Together with the Warkworth Continuation Project, it is predicted to generate royalties of around $617 million. These royalties would be spent on providing infrastructure and services to the broader community. The project would provide continued employment for around 120 workers at the Mt Thorley mine, and the continued employment of around 1,300 workers at the larger MTW mine complex. The economic assessment of both projects estimates the two projects would have a net economic benefits of around $1,488 million.



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2 STATUTORY CONTEXT 2.1 State Significant Development The project is classified as State Significant Development under Section 89C of the EP&A Act as it is ‘development for the purposes of coal mining’, and therefore meets the criteria in Clause 5 of Schedule 1 of State Environmental Planning Policy (State and Regional Development) 2011. Consequently, the Minister for Planning is the consent authority for the development application. However, under existing Ministerial delegations, the Planning Assessment Commission (PAC) may determine the development application as there were more than 25 public objections to the project. 2.2 Permissibility The site is zoned RU1 Primary Production under the Singleton Local Environmental Plan 2013 (Singleton LEP). Open cut mining is permissible with consent in this zone. The project is also permissible with consent under State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007. 2.3 Integrated and Other Approvals Under Section 89J of the EP&A Act, a number of other approvals are integrated into the State Significant Development approval process, and consequently are not required to be separately obtained. In relation to the proposed project, this includes an Aboriginal heritage impact permit under the National Parks and Wildlife Act 1974. Under Section 89K of the EP&A Act, a number of other approvals are required, but must be substantially consistent with any development consent for the proposal. This includes a variation to MTO’s Environment Protection Licence held under the Protection of the Environment Operations Act 1997. Finally, MTO requires some additional approvals for the project which are not integrated into the State Significant Development approval process, including certain water licenses under the Water Management Act 2000. The Department has consulted the relevant public authorities responsible for granting these integrated and other approvals, and considered the relevant issues relating to these approvals in its assessment of the project (see Section 5 and Section 6). All of these public authorities support the project subject to conditions. 2.4 Environmental Planning Instruments Several environmental planning instruments apply to the project, including: • SEPP (Mining, Petroleum and Extractive Industries) 2007 (the Mining SEPP). • SEPP (Infrastructure) 2007 (the Infrastructure SEPP); • SEPP (State and Regional Development) 2011 • SEPP No.33 – Hazardous and Offensive Development; • SEPP No.44 – Koala Habitat Protection; • SEPP No.55 – Remediation of Land; • Hunter Regional Environmental Plan (Heritage) 1989; and • Singleton LEP 2013. The Department has considered the project against the relevant provisions of these instruments in the body of this report, as well as MTO’s consideration of these matters in the EIS (see Appendix C). Based on its assessment, the Department is satisfied that the project can be carried out in a manner that is generally consistent with the aims, objectives and provisions of these instruments.



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2.5 PAC Review On 6 November 2014, the Minister for Planning asked the PAC to review the merits of the Mt Thorley Continuation Project and the Warkworth Continuation Project. Due to the level of interest in the projects, the Minister also requested that the PAC hold public hearings during the reviews. The terms of reference for the Mt Thorley Continuation Project PAC review are reported in Table 4 below (NB. The Terms of Reference are the same for both the Mt Thorley and Warkworth Continuation Projects). Table 4: Terms of Reference for the Mt Thorley Continuation Project PAC Review 1. Carry out a review of the Mt Thorley Continuation Project, and:

a) consider the EIS for the project, the issues raised in submissions, the formal response to submissions, the Department of Planning and Environment’s preliminary assessment report of the project, and any other relevant information provided on the project during the course of the review;

b) assess the merits of the project as a whole, paying particular attention to the potential amenity, health and social impacts on the village of Bulga and surrounds; and

c) provide recommendations on any reasonable and feasible measures that could be implemented to avoid, reduce and/or offset the potential impacts of the project.

2. Conduct public hearings on the project before 12 December 2014. 3. Complete the review by 20 February 2015, unless the Secretary agrees otherwise.

3 CONSULTATION 3.1 Exhibition Under Section 89F of the EP&A Act the Secretary is required to publicly exhibit the Environmental Impact Statement (EIS) for the project for at least 30 days. The Department: • publicly exhibited the EIS from 25 June until 6 August 2014 at the:

o Department’s Information Centre in Sydney; o Singleton Shire Council; o Nature Conservation Council’s office; and o Department’s website;

• notified relevant State government authorities and Council by email; • notified relevant roads authorities, in accordance with the Mining SEPP and Infrastructure SEPP;

and • advertised the exhibition in the Singleton Argus, Newcastle Herald, Daily Telegraph and Sydney

Morning Herald newspapers.

This exhibition was undertaken concurrently with the exhibition for the Warkworth Continuation Project. 3.2 Submissions During the exhibition period, the Department received 457 submissions on the project, including: • 7 from public authorities; • 21 from special interest groups; and • 429 submissions from the general public. A summary of the issues raised in these submissions is provided below, and full copies of the submissions are included in Appendix E. None of the public authorities object to the project. However, the split of those for and against the project among the remaining submissions was relatively even with 57% of the general public (including special interest groups) supporting the project.



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Given the highly integrated nature of both the Mt Thorley and Warkworth Continuation Projects, and the fact that both projects were exhibited together, it is unsurprising that many of the submissions on the Mt Thorley project were dominated by comments on the Warkworth project. In fact, very few of the submissions received were actually focused on the specific merits of the Mt Thorley project, or were only focused on it to the extent that it would facilitate the larger Warkworth project or exacerbate any impacts of the project. 3.3 Public Authority Submissions Various agencies within the NSW Trade and Investment (DTIRIS) - including the Division of Resources and Energy (DRE), NSW Office of Water (NOW) and Office of Agricultural Sustainability & Food Security (OAS&FS) commented on the project. DRE supports the extraction of the remaining open cut coal resource on site. While it concedes that the extraction of this resource (29 million tonnes) would not be significant in absolute or relative terms, it notes that the project would provide essential support to the Warkworth Continuation Project by: - allowing up to 10 million tonnes of coal to be washed at the Mt Thorley CPP each year; - providing space for dumping overburden, tailings and coal rejects generated by the Warkworth

mining operations; and - providing a range of supporting infrastructure, such as the roads and conveyors that currently link

the Warkworth mine to the nearby Mt Thorley Coal Loader. DRE considers the Warkworth Continuation Project to be very significant both in terms of the resource that would be extracted (230 million tonnes) and the consequential economic and social benefits that would flow from the extraction of this resource. DRE also supports the proposed rehabilitation of the site, saying that it would result in a better final landform for the site with no final void and substantial woodland vegetation. Despite this, DRE noted the information in the EIS on the proposed rehabilitation of the site was conceptual in nature, and would need to be augmented with further work during detailed rehabilitation planning under the mining operations plan process. DRE recommended conditions to ensure there are suitable performance measures to guide the rehabilitation of the site, which have been incorporated into the recommended conditions of consent for the project. Both NOW and the OAS&FS sought clarifications on a range of water matters, including MTO’s existing water licences, the potential impacts of placing spoil near the Lower Wollombi Brook Water Source alluvial, and the potential groundwater drawdown impacts on the water supply of nearby farmers. MTO addressed all these matters in its response to submissions, and NOW currently supports the project subject to the imposition of suitable conditions. The Environment Protection Authority (EPA) sought clarifications on a range of matters associated with the assessment of the potential air quality and noise impacts of the project, including its potential blast fume and low frequency noise impacts. MTO addressed these matters satisfactorily in its response to submissions, and now supports the project subject to conditions. Both Singleton Council and NSW Health raised concerns about the potential air quality, noise and consequential social impacts of the project, and the effect this may have on the amenity and cohesiveness of the Bulga village. They indicated that close consideration should be given to whether all reasonable and feasible mitigation would be implemented to reduce the dust and noise impacts of the project, managing any health risks on mine-owned land, and minimising any impacts on Bulga village. Council also recommended that some consideration be given to requiring MTO to contribute to a broader study of the health impacts of mining in the region. The Office of Environment and Heritage (OEH), Heritage Council of NSW and Roads and Maritime Services (RMS) had no concerns about the project.



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3.4 Special Interest Group Submissions Fourteen of the 21 special interest group submissions objected to the project. These objections were from a range of groups, including local groups (such as the Bulga Milbrodale Progress Association, Hunter Communities Network and Hunter Valley Protection Alliance) and regional groups (such as the Lock the Gate Alliance, Nature Conservation Council, National Parks Association of NSW - Armidale Branch, Australian Conservation Foundation - Shoalhaven Branch and Stop Coal Seam Gas Blue Mountains). These groups were mostly concerned about the potential dust, noise, blasting and visual impacts of the project itself, as well as cumulatively with the Warkworth Continuation Project. In particular, they were opposed to the fact that the project would facilitate the Warkworth Continuation Project, which they were all vehemently against. These submissions argued the project would have unacceptable impacts on the amenity and social cohesiveness of the Bulga Village. Support for the project came from several groups, including the Construction, Forestry, Mining and Energy Union. These groups highlighted the potential economic and social benefits of the project. 3.5 Community Submissions Most of the community submissions were received from residents of the Hunter region, including Singleton, Muswellbrook, Maitland, Cessnock and Newcastle. Several of these submissions were from residents living close to the mine, including Bulga Village, but there were also a number of submissions from the wider region, including Sydney. Of the 429 public submissions, 249 supported the project mostly citing its potential economic and social benefits. The remaining submissions objected to the project. These objections were similar to the objections received from the special interest groups in that they were particularly concerned about the potential dust, noise, blasting, and visual impacts of the project. Some of these objections were opposed to coal mining in general, saying NSW should not be approving any new coal mines. 3.6 Response to Submissions On 10 November 2014, MTO provided a detailed response to the issues raised in submissions (see Appendix D), which was made publicly available on the Department’s website.

4 ASSESSMENT In assessing the merit’s of the project, the Department has considered a range of matters, including the: • DA and EIS for the project; • DA and EIS of the related Warkworth Continuation Project; • issues raised in submissions; • MTO’s formal response to the issues raised in submissions; • additional information provided by MTO to address a range of technical raised during the

assessment process; • the conditions of the existing development consent for the Mt Thorley mine; • previous EISs and EAs for development at the mine; • current environmental management plans and monitoring results; • relevant environmental planning instruments, policies and guidelines; and • relevant provisions of the EP&A Act, including the objects of the Act. The Department has also sought advice from two independent exports: Dr Norm Broner (Noise) and Deloitte Access Economics (Economics). At this stage, the Department has only received preliminary advice from both experts, and has considered this advice in its assessment. Once it receives the further advice from these experts, it will revise the findings of its assessment accordingly. The following is a summary of the key findings of this assessment.



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4.1 Noise The EIS includes a noise impact assessment undertaken by EMM in accordance with applicable guidelines, including the NSW Industrial Noise Policy (INP). Although the Mt Thorley mine has a different ownership structure, different consent, and different noise limits to the Warkworth mine, the two mines are operated as a single, integrated mining complex, sharing equipment, infrastructure and employees. This complicates the assessment of the potential noise impacts of the project. However, the noise impact assessment has treated the Mt Thorley project as a stand-alone operation. Consequently, as soon as Warkworth employees and equipment move onto the Mt Thorley mine they are treated as Mt Thorley noise sources and vice versa. The assessment considers the operational noise of the Mt Thorley mine on a range of sensitive receivers in the vicinity of the mine, including the residential properties within Mt Thorley and Bulga villages. Background Noise Levels One of the key issues raised in the Land & Environment Court proceedings on the Warkworth Extension Project, and also in numerous submissions on this project, was the methodology for establishing accurate background noise levels for the surrounding area without the noise from the existing operations. This is important because under the Industrial Noise Policy the project specific noise levels (PSNLs or intrusive noise criteria) are generally set 5dB(A) above these background levels. So if background noise levels are set higher than they should be, then the PSNLs would be higher than they should be. The methodology used for establishing background noise levels for the project was comprehensive, and a significant extension on the general methodology outlined in the Industrial Noise Policy . To establish the background noise levels in Bulga, EMM used six extensive data sets collected between 2011 and 2013. The sites were well dispersed across the Bulga area, and are considered to be satisfactorily representative of the major noise catchments in the area. The data sets containing noise and meteorological data were for durations of between 3 and 11 months, and included data collected from directional noise monitoring. A sensitivity analysis of the data supports EMM’s claim that noise from the existing Mt Thorley mine has been satisfactorily removed from the background data through the use of directional sound level meters. Despite recording night time background noise levels of up to 35 dB(A) in some instances, EMM has taken a conservative approach and used lower levels at these locations that are consistent with previous studies. To avoid large step changes in criteria where one residence may have an assigned background of 33 dB(A) and the neighbouring property an assigned background of 30 dB(A), EMM has conservatively transitioned the criteria in Bulga to 1 dB(A) steps using both monitoring data and modelling techniques. Both the Department and the EPA have examined EMM’s results closely, and are satisfied that accurate background levels have been established for the surrounding area. While the submission from the Bulga Milbrodale Progress Association included an acoustic report from Day Design, which questioned the background noise levels derived in EMM’s noise assessment, the Department’s independent noise expert (Dr Norm Broner) has identified a number of flaws in this report, including that it relies heavily on the data from a single unattended noise logger, and that this data contains various anomalies that are difficult to explain. Dr Broner will provide further advice on both the accuracy of EMM’s background noise levels, and the matters raised in the Day Design report in his final report, but in the interim both the Department and the EPA accept that the background noise levels adopted in the EIS are found on a thorough scientific basis.



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In areas outside Bulga (such as Hambleton Hill, Warkworth Village and Mt Thorley), EMM has used historic data to set levels which is considered to be a conservative approach to setting background levels in areas where these levels are likely to have gone up due to increased industrial activity, or adopted minimum background levels under the Industrial Noise Policy. Both the Department and the EPA are satisfied with the adopted background noise levels in these areas. Noise Mitigation Measures Activities on site over the life of the project are expected to be similar to the existing approved operations on site, with the primary noise sources being the completion of approved mining in the Loders and Abbey Green North Pits, backfilling and rehabilitation of the existing voids, and ongoing processing of coal. To minimise the noise impacts of these operations, MTO is proposing to implement all reasonable and feasible noise mitigation measures. Under the Industrial Noise Policy, these measures are grouped into three categories: • controlling noise at source, either by using:

- Best Available Technology Economically Available (BATEA); and - Best Management Practice (BMP), which includes restricting the use of equipment on elevated

areas at certain times, scheduling noisier activities during the day, and increasingly the use of real-time noise management);

• controlling the transmission of noise with bunds or buffer areas; and • controlling noise at the receiver. MTO currently relies largely upon a combination of the first two measures. The Department has evaluated these measures and concluded that: • MTO is implementing best management practice on site, particularly through its real-time noise

management system. However, it acknowledges there are limits to the reductions that can be achieved through BMP, and while it is possible to stand equipment down and reduce noise impacts, there is a threshold where the costs of doing this may well outstrip any noise benefits gained;

• there are limits to controlling noise from the Mt Thorley mine through buffer areas and barriers, principally because the topography of the surrounding area does not lend itself to these mitigation measures, and large bunds are unlikely to reduce noise impacts by much during adverse weather conditions; and

• the sound power levels of the equipment at Mt Thorley are higher than those at a number of other mining operations in the Hunter Valley. This is partly reflective of the age of the mine, however, reductions in these sound power levels would reduce the noise levels of mining operations on site appreciably.

Over the last few years, MTO has gradually been attenuating the key equipment on site, including haul trucks, dozers, excavators and drills. However, to date only 50% of the haul truck fleet is attenuated. Under the project, MTO is proposing to complete the attenuation of all of this fleet by the end of 2016 at a cost of around $50 million. MTO claims it is not possible to introduce the attenuation quicker as there are constraints on the supply of attenuation packages at the moment. With the implementation of this attenuation, the Department is satisfied that Mt Thorley would be implementing all reasonable and feasible mitigation measures on site. Noise Predictions EMM’s noise predictions are based on the assumption that MTO would implement all reasonable and feasible mitigation measures on site, including the attenuation package by 2016. It also uses a range of conservative assumptions, including worst case weather conditions, to minimise the risk of under-predicting the impacts of the project.



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The predicted noise impacts of the project at privately-owned residences are summarised in Table 5 below. Table 5: Number of Properties v Predicted Impact PSNL ≤ PSNL + 1 – 2 dB + 3 – 5 dB > 5 dB 35 116 12 2 1 36 1 8 - - 37 5 12 - - 38 38 21 - - Total 160 53 2 1a

a. Excludes 3 properties in the existing acquisition zone Over the life of the project, the noise assessment predicts that the project would result in exceedances of the project specific noise levels at up to 59 privately-owned residences surrounding the mine during worst-case operating conditions (including three properties in the acquisition zone). In interpreting these exceedances, it is important to consider the advice in both the: • Industrial Noise Policy, which says project-specific noise levels should not be “automatically

interpreted as conditions for consent, without consideration of other factors,” and “in many instances, it may be appropriate to set noise limits for a development above the project-specific noise levels”; and

• the Mining SEPP, which provides that noise levels from specific projects are deemed to be acceptable provided they do not result in exceedances of the recommended amenity (or cumulative) criteria in the Industrial Noise Policy, which in this case is 40dBA over a 9-hour night time period (which equates to an Leq(15min) level of approximately 43dB(A)).

Further, the NSW Government’s Voluntary Land Acquisition and Mitigation Policy gives further guidance on how exceedances of project specific noise levels should be interpreted (see Table 6 below). Table 6: Characterisation of noise impacts & potential treatments

Residual noise exceeds INP criteria by

Characterisation of impacts Potential treatment

0-2dB(A) above the project-specific noise level (PSNL)

Impacts are considered to be negligible

The exceedances would not be discernable by the average listener and therefore would not warrant receiver based treatments or controls

3-5dB(A) above the PSNL in the INP but the development would contribute less than 1dB to the total industrial noise level

Impacts are considered to be marginal

Provide mechanical ventilation / comfort condition systems to enable windows to be closed without compromising internal air quality / amenity.

3-5dB(A) above the PSNL in the INP and the development would contribute more than 1dB to the total industrial noise level

Impacts are considered to be moderate

As for marginal impacts but also upgraded façade elements like windows, doors, roof insulation etc. to further increase the ability of the building façade to reduce noise levels.

>5dB(A) above the PSNL in the INP

Impacts are considered to be significant

Provide mitigation as for moderate impacts and provide voluntary land acquisition rights.

Based on this guidance, of the 59 affected residences: • 4 are predicted to experience significant noise impacts: all of these residences are located in the Mt

Thorley area to the east of the mine, and the owners of 3 of these residences already have voluntary acquisition rights under Mt Thorley consent;

• 2 are predicted to experience moderate noise impacts, both of which are also in the Mt Thorley area; and

• 53 are predicted to experience negligible noise impacts, which would be indiscernable to most people.



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In addition, there are three further points that should be noted. First, the predictions are based on the change in noise levels relative to background noise levels that haven’t existed for many years, as the Mt Thorley mine has been part of the noise landscape for over 30 years now. Second, these predictions are worst case predictions under adverse weather conditions occurring in the most affected season in the most affected year, so actual impacts are likely to be lower than predicted. Finally, despite the predicted exceedances of intrusive noise criteria, cumulative noise levels (which includes the project and all other industrial sources such as the Warkworth and Bulga mines) would remain below the recommended amenity criteria for a rural area in the Industrial Noise Policy at all privately-owned residences surrounding the mine, and therefore below the non-discretionary standards in the Mining SEPP. When this is taken into consideration with the social and economic benefits of the project, and the fact that MTO would be implementing all reasonable and feasible noise mitigation measures, the Department considers the potential noise impacts of the project to be acceptable. The Department has recommended conditions to minimise the impacts of the project. These include: • granting voluntary acquisition rights to 4 landowners, 3 of whom have voluntary acquisition rights

under the existing Mt Thorley consent; • granting voluntary mitigation rights to 2 other landowners; • setting strict noise limits at all other privately-owned properties surrounding the mine; • requiring MTO to comply with a range of standard noise conditions, including implementing all

reasonable and feasible measures to minimise the noise impacts of the project, implementing a real-time noise management system, carrying out regular monitoring of the noise impacts of the project to ensure compliance, and making these monitoring results available on its website; and

• preparing a detailed Noise Management Plan for the project. Low Frequency Noise Several submissions were critical of the noise impact assessment, saying it should have applied the penalties in the Industrial Noise Policy to the predictions to account for low frequency noise impacts. The Department’s independent expert has considered this criticism, and raised several important points. First, the penalty does not apply to general noise (or the predictions); it must be applied specifically to a noise source. Second, the EPA has acknowledged that the test in the Industrial Noise Policy for low frequency noise breaks down at larger distances from the source due to the natural attenuation difference between high and low frequencies leading to a very unbalanced spectrum at larger distances (which is common with coal mines). By default, this leads to the test for penalties being triggered even though the sound levels at these larger distances are relatively low and would not cause any annoyance. Finally, he notes that EMM carried out further analysis of the potential low frequency noise impacts of the project, in response to the criticisms in submissions, which supported earlier findings that the low frequency noise penalty should not be applied to the project. The Department accepts this advice. 4.2 Air Quality The EIS includes a specialist air quality impact assessment undertaken by Todoroski Air Sciences in accordance with the EPA’s Approved Methods for the Modelling and Assessment of Air Pollutants in NSW (Approved Methods). This assessment modelled the incremental and cumulative total suspended particulates (TSP), fine particulate matter (PM10) and deposited dust impacts of the project under three representative mining scenarios (Years 3, 9 and 14) under prevailing meteorological conditions.



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The prevailing winds in the area are from the south, southeast and northwest (see Appendix G to the EIS). This means most of the project’s dust impacts are likely to occur in the southeast-northwest quadrant, or parallel to the corridor of mines in the region including the Bulga, Warkworth and Hunter Valley Operations mines. Or to put it another way, much of the dust from the Mt Thorley mine will blow over the Bulga and Warkworth mines rather than towards the Bulga village. In recognition of concerns about the potential health impacts of mining in the Hunter Valley, the assessment also modelled the the likely PM2.5 impacts of the project, and compared the results against the relevant national advisory reporting standards. Background Dust Levels Mt Thorley has an extensive air quality monitoring network of high volume air samplers (HVAS), tapered element oscillating microbalances (TEOM) and dust deposition gauges around the mine. The EIS identified that annual average PM10 background concentrations around the mine were well below the EPA’s criteria of 30 µg/m3. These results are consistent with the results of the EPA’s regional air quality monitoring network, which shows average PM10 levels in Bulga village were around 20 µg/m3 between July 2012 and June 2014, and around 25 µg/m3 near the Mt Thorley Industrial Estate. However, short term PM10 background concentrations around the area are above the EPA’s criteria of 50 µg/m3 at some locations. Again, these results are consistent with the results of the EPA’s regional air quality monitoring network, which shows cumulative PM10 levels exceeded the 24-hour criteria on 3 to 4 days a year in Bulga between July 2011 and June 2014, and up to 20 days a year near the Mt Thorley Industrial Estate. Dust Mitigation Measures The project involves several dust generating activities, including the receipt of additional overburden material from the Warkworth mine, but the dust generated by these activities is likely to be much the same as the dust generated by the existing mining activities on site. Under the EPA’s regional Dust Stop Program, MTO is implementing a number of pollution production programs under its Environment Protection Licence, including measures to: • minimise dust on haul roads; • minimise dust generated by materials handling on site; • minimise surface disturbance and stabilise inactive disturbed areas; and • operate a real-time air quality management system on site. The Department considers this to be consistent with current best practice as outlined in the NSW Coal Mining Benchmarking Study: International Best Practice Measures to Prevent and/or Minimise Emissions of Particulate Matter from Coal Mining (Katestone Environmental Pty Ltd, 2010). While further initiatives could be introduced under the Dust Stop Program, the Department believes there is limited scope for MTO to further reduce or mitigate the predicted dust impacts without comprising mining operations on site. Dust Predictions The EIS predicts that the project would make a minor contribution to exceedances of the annual average PM10 criteria at one privately-owned residence (receiver 77). This residence is located in the Warkworth village, and is already significantly affected by dust impacts from the Wambo mine, and is predicted to be significantly affected by the dust impacts of the Warkworth Continuation Project (which is located much closer to the property than the Mt Thorley mine). The Department has not recommended that this property be granted voluntary acquisition rights under this project, partly because of the small contribution it would make to any exceedances of the criteria, and partly because this property should be acquired by either the Wambo or Warkworth mine before the Mt Thorley mine. With the exception of this residence, the project is predicted to comply with the applicable short-term and project specific annual average PM10, total suspended solids and dust deposition criteria in the



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EPA’s Approved Methods, as well as the national advisory guidelines for PM2.5, at all other privately-owned residences surrounding the project. Cumulative 24-hour PM10 Predictions There are a range of difficulties associated with predicting the cumulative 24-hour PM10 impacts of mining operations in the Hunter Valley, and consequently any such predictions should be treated with caution. The EIS includes a contemporaneous assessment of the potential cumulative 24-hour PM10 dust impacts of the project when combined with other sources. This assessment estimates there would not be additional exceedances of the cumulative 50 µg/m3 PM10 criteria near the Bulga Village, but that there could be up to 6 additional exceedances of the criteria in a year at the Warkworth Village, 2 additional exceedances a year near Knodlers Lane, and 3 additional exceedances a year near the Mt Thorley Industrial Estate. While most of these impacts are likely to be due the Warkworth Continuation Project, rather than the Mt Thorley project, at this stage the Department does not have sufficient information to determine whether any of these predicted exceedances would trigger the relevant voluntary land acquisition or mitigation criteria under the NSW Government’s Voluntary Land Acquisition and Mitigation Policy at any privately-owned properties near the mine. Consequently, the Department has requested that Mt Thorley undertake supplementary air quality modelling of cumulative 24-hour PM10, to address the assessment requirements of the Voluntary Land Acquisition and Mitigation Policy. Once this information is received, the Department would be in a position to make a final recommendation on this matter to the PAC, including whether any additional properties should be afforded additional mitigation and/or acquisition rights. Mine-Owned Properties The EIS predicts that the project would contribute to exceedances of the relevant cumulative annual average and 24-hour average PM10 criteria at several mine-owned properties in the vicinity of the site. These properties form part of the “buffer land” for the Bulga, Warkworth and existing Mt Thorley mining operations. Under the Voluntary Land Acquisition and Mitigation Policy, mining companies are responsible for managing the impacts of any mining development on their “buffer land”, and in doing so are generally required through standard conditions to: • inform existing, prospective or new tenants of:

- the scale and nature of the predicted impacts; and - the health risks, if any, of being exposed to such impacts;

• allow tenants to terminate their lease agreement without penalty at any stage during the project; and

• in the case where an existing tenant decides to move to avoid the impacts of the project, pay the costs associated with moving to alternative accommodation.

The Department has recommended that MTO be required to comply with these standard conditions. Conclusion The Department has concluded that the dust impacts of the project are likely to be similar to those of the existing operations, and would comply with the relevant annual average air quality criteria at all privately-owned residents in the vicinity of the mine apart from a residence in Warkworth village which is already significantly affected by the dust impacts of the Wambo and Warkworth mines. While the project’s 24-hour average PM10 impacts are likely to be similar to existing impacts, there could be additional exceedances of the cumulative criteria at some properties in the vicinity of the mine. The Department has sought further information on the precise scale of these predicted impacts, and should be able to determine whether any of the properties should be granted voluntary land acquisition or mitigation rights.



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The Department has recommended conditions to minimise the air quality impacts of the project. These include requiring MTO to: • employ all reasonable and feasible mitigation measures to ensure compliance with the EPA’s

relevant air quality criteria; • manage the health risks associated with elevated dust levels on mine-owned land in “buffer

areas”; • comply with standard operating conditions, including to minimise the odour, fume and dust

emission of the project, implement a real-time air quality management system, carry out regular monitoring of dust levels around the mine, and making these reports publicly available on its website; and

• prepare a detailed Air Quality Management Plan for the project. 4.3 Visual The EIS includes a specialist visual impact assessment prepared by Integrated Design Solutions. This assessment uses a computer model and photomontages to predict the visual impacts of the project on the surrounding area. The Mt Thorley mine is generally shielded from views on three sides by the Warkworth mine to the north, the Mt Thorley Industrial Estate and rolling hills to the east, and the Bulga mine to the south (see Figure 10). The main views of the mine are therefore from the west, including large parts of the Bulga village. For many years now, several residents of the Bulga village have had direct views of the Mt Thorley and/or Bulga mining operations as they are dominant features in the landscape to the east of the village, and are particularly visible from the elevated foothills of the village. While these residents have direct views of mining operations, these views are mitigated to some extent by the fact that the village is over three kilometres away from these mining operations. The project is predicted to have two key visual impacts. First, it would generate continued night lighting impacts on the surrounding area. While these impacts are likely to be similar to those of existing operations, there could be a slight increase in impacts during the later years of the project when the voids have been filled and equipment is working on elevated slopes at the mine. There is limited scope to mitigate such impacts on site (by building bunds for instance), because the site’s topography doesn’t lend itself to the implementation of such measures. Consequently, MTO would need to rely on standard lighting controls to reduce the night lighting impacts of the project. The Department has recommended conditions requiring MTO to: • implement all reasonable and feasible measures to minimise the lighting impacts of the project; • ensure that all external lighting complies the relevant Australian Standard; and • monitor and report on the effectiveness of these measures. Second, the project involves the progressive backfilling of existing voids on site, and the creation of a final landform that would be integrated with the final landforms at the adjoining Warkworth and Bulga mines. The Department considers this landform to be a significant improvement over the current approved final landform of the mine, which includes the creation of a narrow valley leading to a large final void. The visual impact assessment shows that the new landforms created by the project would be clearly visible from large parts of Bulga village (see Figure 11). While these views would be mitigated in the medium to long term as the landforms are shaped and revegetated with woodland, there is very little that could be done to mitigate these views in the short to medium term due to the natural topography of the area, just as there is little than can be done to mitigate the existing views of the mine.



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Figure 10: Visual Characteristics of the Region



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Figure 11: Visual Assessment of Views From Bulga Village



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Nevertheless, the Department has recommended conditions to reduce the visual impacts of the project as far as practicable. These include requiring MTO to: • establish performance measures for the rehabilitation of the site, which require MTO to create

natural looking final landforms with suitable micro-relief, to ensure these landforms are properly integrated with those of the surrounding mines, and to plant dense woodland vegetation on the elevated landforms facing the Bulga village to improve the scenic values of the existing landscape;

• prepare a detailed Rehabilitation Management Plan for the project; • provide additional visual mitigation measures (such as landscaping treatments and screening) to

the owner of any residence that either has, or would have, significant direct views of the mining operations on site; and

• implement vegetation planting along the boundary of the site adjoining public roads to minimise views of the mines from these roads.

With these measures in place, the Department considers that the residual visual impacts of the project would be acceptable. 4.4 Other issues The Department’s assessment of other issues is provided in Table 7 below. Table 7: Assessment of Other Issues

Issue Assessment Recommendation

Construction Noise

• All construction noise would be treated as operational noise, and regulated under the operational noise limits.

• MTO to minimise the operational noise impacts of the project, and comply with the relevant operational noise limits.

Rail Noise • Mt Thorley coal is railed from the adjoining Mt

Thorley Coal Loader, which operates under a separate consent.

• Maximum production levels would remain the same as they have been for many years, and there would be no change to the current rail noise impacts.

• None

Traffic Noise • Traffic levels would remain the same, and

continue to comply with the relevant criteria under the Road Noise Policy.

• MTO to minimise the traffic noise impacts of the project.

Blasting • With the implementation standard blast controls,

MTO would be able to comply with the relevant ANZEC criteria for minimising annoyance during blasting

• Blasting hours and frequency would remain unchanged

• The project is highly unlikely to cause any property damage in the area surrounding the mine, even to some of the sensitive historic heritage structures in the vicinity of the mine, principally because blasting impacts would be restricted to low levels via the annoyance criteria.

• With the implementation of standard blast fume minimisation strategies, MTO would be able to minimise blast fumes to acceptable levels at all privately-owned properties surrounding the mine, and comply with the relevant NO2 criteria.

• Safety risks (such as flyrock leaving the site) are low, as there are no privately-owned properties located within 500 metres of the mine. Nevertheless, some blasting would occur within 500 metres of Putty Road, and the safety risks associated with this blasting would need to be controlled via standard temporary road closure procedures.

• MTO to comply with the Department’s standard blasting conditions, including: - comply with the relevant blasting

criteria; - restrict the hours and frequency of

blasting; - include safeguards for landowners in

the unlikely the project causes any property damage;

- restrict blasting within 500 metres of roads and any privately-owned land;

- implement best management practice to minimise blast fumes and dust;

- give the public up-to-date information on blasting schedules; and

- prepare a detailed blast management plan for the project.

Greenhouse Gas

• The project would result in the generation of around 40.5 million tonnes of CO2 equivalent each year, although most (39Mt) of these

• MTO to implement all reasonable and feasible mitigation measures to reduce the greenhouse gas emissions of the



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Issue Assessment Recommendation Emissions emissions are associated with the export and

burning of the coal, and would be generated and accounted for overseas.

• There is limited scope for reducing emissions on site, as most of the emissions would be fugitive emissions from open cut mining operations.

• Nevertheless, emissions could be reduced with the implementation of various energy efficiency measures.

project on site

Water Resources

• The Warkworth / MTO complex is predicted to require up to 1,500 ML per year of external water supplies (based on the long-term average climate conditions) most of which would be associated with the Warkworth mine. MTO is expected to have sufficient water entitlements to account for its share of this water demand.

• The project is highly unlikely to have any impacts on the basic landholder rights of any private landowner in the vicinity of the project, principally because there are very few landholders with bores that could be affected by the predicted drawdown of groundwater resources.

• The project would comply with the minimal impact criteria in the NSW Aquifer Interference Policy.

• The risk of water pollution is low, as MTO has extensive water storage capacity on site and the ability to discharge excess water under the Hunter River Salinity Trading Scheme (HRSTS).

• All water discharges would continue to be via the regulated discharge point on Loders Creek.

• The rehabilitation of the site would fill existing mining voids, and ensure the site is free-draining.

• MTO to ensure it has sufficient water for all stages of the project, and if necessary adjust the scale of operation to match its available water supply.

• MTO to provide a compensatory water supply to any landowner whose basic landholder rights are directly affected by the project.

• MTO to ensure all water discharges comply with the limits in the existing environmental protection licence, and the rules of the HRSTS.

• MTO to comply with standard water performance measures, governing matters such as the development of clean water diversions systems and mine water storages.

• MTO to ensure the rehabilitation of the site is both free-draining and non-polluting.

Biodiversity • No further clearing would occur. • Most of the site would be rehabilitated back to

woodland, with at least 483 ha of this being the Central Hunter Grey Box – Ironbark Woodland EEC.

• This creation of this vegetation would be used, in part, to offset the clearing impacts of the Warkworth Continuation under the NSW Biodiversity Offsets Policy for Major Projects.

• MTO to rehabilitate at least 483 ha of the site to the Central Hunter Grey Box – Ironbark Woodland EEC.

Aboriginal Heritage

• The project would not increase the approved disturbance area.

• MTO would continue to manage Aboriginal cultural heritage matters on site in consultation with the Aboriginal community under its existing Aboriginal Heritage Management Plan.

• MTO has agreed to establish a long term conservation area around Loders Creek, and the establishment of this conservation area is supported by the Aboriginal community.

• MTO to protect establish a Aboriginal Cultural Heritage Conservation Area around Loders Creek under the NPW Act in consultation with the Aboriginal community.

• MTO to update and implement its existing Aboriginal Heritage Management Plan for the mine.

Historic Heritage

• The project would have no impacts on historic heritage.

• None

Transport • Traffic impacts would remain unchanged. • The project relies mostly on the State road

network, and would therefore generate little demand for local road maintenance.

• MTO is in discussions with Singleton Council about a potential VPA for the project. This VPA is expected to cover the payment of local road

• MTO to finalise a Voluntary Planning Agreement (VPA) with Singleton Council.



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Issue Assessment Recommendation maintenance contributions for the project.

• All coal would continue to be railed via the existing Mt Thorley Coal Loader, and maximum production rates would be unchanged.

Waste • The project would generate a range of standard

wastes (tyres, oils, paper, domestic waste, etc) which would be classified and disposed of in accordance with the EPA’s relevant guidelines.

• Tailing and coal rejects would be disposed of in the pits.

• MTO to minimise the waste generated by the project, and ensure it is appropriately stored, handled and disposed of.

Socio-economic

• The project would not significantly increase demand on community services and infrastructure, given that it is an existing operation.

• The project would provide continued employment for around 120 people for 21 years, and generates approximately $50 million in royalties

• MTO to finalise VPA with Singleton Council.

5. RECOMMENDED CONDITIONS The Department has prepared recommended conditions of approval for the project (see Appendix A). These conditions are required to: • prevent, minimise, and/or offset adverse impacts of the project; • ensure standards and performance measures for acceptable environmental performance; • ensure regular monitoring and reporting; and • provide for the ongoing environmental management of the project. The Department believes the conditions reflect current best practice for the regulation of coal mines in NSW.

6. CONCLUSION The Department has assessed the development application, EIS, Response to Submissions and submissions on the project in accordance with the requirements of the EP&A Act. The Department has also considered the independent expert review of the project’s economic assessment. The Mt Thorley Continuation Project involves the continued extraction of coal from the approved mining operations to secure an additional 29 million tonnes of coal, backfilling existing mining voids on the site, principally with overburden, coarse rejects and tailings from the proposed expansion of the Warkworth mine, and using the existing infrastructure on site to support the Warkworth Continuation Project. While the Mt Thorley resource is not significant in either absolute or relative terms, it has a market value of between $2.5 and 3 billion, and would generate royalties of around $50 million (in net present value terms) for the NSW Government. However, together with the Warkworth Continuation Project, it is predicted to generated royalties of around $617 million for the NSW Government. The project would also provide continued employment for around 120 workers at the Mt Thorley mine, and the continued employment of around 1,300 workers at the larger MTW mine complex. The economic assessment of both projects estimates the two projects would have a net economic benefit of around $1,488 million. With regard to the potential amenity impacts of the project, the Department’s assessment has found that the even with the implementation of all reasonable and feasible mitigation measures, there would be some residual noise, dust and visual impacts.



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APPENDIX A: RECOMMENDED CONDITIONS OF CONSENT



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APPENDIX B: CONSIDERATION OF ENVIRONMENTAL PLANNING INSTRUMENTS

SEPP No.33 – Hazardous and Offensive Development The Department is satisfied that the project is not potentially hazardous or offensive, and that the proposal is generally consistent with the aims, objectives, and requirements of SEPP 33. SEPP No.44 – Koala Habitat Protection The Department is satisfied that the project site does not contain any areas of core Koala habitat, and that the proposal is generally consistent with the aims, objectives, and requirements of SEPP 44. SEPP No.55 – Remediation of Land The Department is satisfied that the project area does not have a significant risk of contamination, and that the project is generally consistent with the aims, objectives, and provisions of SEPP 55. SEPP (Infrastructure) 2007 In accordance with clause 104 of the Infrastructure SEPP, the application was referred to RMS. The matters raised in RMS’s submission on the project were considered by the Department, and the Department has recommended conditions of approval in relation to the classified road network. SEPP (Mining, Petroleum Production and Extractive Industries) 2007 Under clause 7 of the Mining SEPP, the project is permissible with consent. Part 3 of the Mining SEPP lists a number of matters that a consent authority must consider before determining an application for consent for development for the purposes of mining, including: • the significance of the resource; • certain non-discretionary development standards in relation to noise, air quality, blasting and

aquifer interference; • compatibility with other land uses; • natural resource management and environmental management; • resource recovery; • transport; and • rehabilitation. The Department has considered all of these matters in its assessment. On 4 November 2013, the NSW Government amended the Mining SEPP to clarify the decision-making process for proposals for the mining of mineral resources, including coal. The amendment introduced a clear statutory requirement that the consent authority must consider the significance of the resource, both to the State and the region where it is located, as part of its decision-making process. While the amendment made clear that the significance of the resource is an important factor in the decision-making process, it is not the only factor, and environmental, social and economic impacts continue to be significant considerations. The Department has considered the significance of the project’s coal resource in its assessment. Based on its assessment of the development, the Department is satisfied that the project can be managed in a manner that is generally consistent with the aims, objectives and provisions of the SEPP. Singleton LEP 2013 The zoning and permissibility of the development under the Singleton LEP is addressed in Section 2.2 of this report. There are no other provisions of the LEP that substantially govern the development, and the Department is satisfied that the project can be managed in a manner that is generally consistent with the aims, objectives and provisions of the LEP.



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APPENDIX C: ENVIRONMENTAL IMPACT STATEMENT

See attached CD ROM



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APPENDIX D: RESPONSE TO SUBMISSIONS

See attached CD ROM



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APPENDIX E: SUBMISSIONS

See attached CD ROM

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