Land Court makes recommendation for grant of mining leases for the Olive Downs Coking Coal Mine

In Brief

The matter of Pembroke Olive Downs Pty Ltd v Sunland Cattle Co Pty Ltd & Ors [2020] QLC 27 concerned an application brought by Pembroke Olive Downs Pty Ltd (Miner), the proponent of five mining leases, and the objections to them made by Sunland Cattle Co Pty Ltd, Namrog Investments Pty Ltd and Balanced Property Ltd Pty (Objectors), the owners of the land the subject of the mining leases.

The Miner is the applicant for three mining leases for coal and two mining leased for related infrastructure for the development of a coking coal mine near Moranbah, Queensland. The Objectors objected to the applications. The grounds of objection related to twenty-six issues relevant to three of the statutory criteria under s.269(4) of the Mineral Resource Act 1989 (Qld) (Mineral Resources Act).

Had the provisions of the Mineral Resource Act been complied with?

Whilst the Objectors initially contended that the mining leases has not been properly made, it did not adduce any evidence of non-compliance with the relevant provisions of the Mineral Resources Act nor did it not press the matter at the hearing.

To that end, and having regard to mining lease notice and declaration of compliance, the Land Court was satisfied that that the Miner had complied with the relevant provisions of the Mineral Resources Act for the mining leases.

Is the area applied for mineralised, or are the other purposes for which the lease is sought appropriate?

On the basis of uncontested evidence of mineralisation across the mining lease areas, the Land Court was satisfied that the mining lease areas were mineralised and that the purposes proposed by the mining leases were appropriate.

Is the land and the surface area of the land applied for of an appropriate size and shape?

The size and shape of the mining lease was considered in the context of mineralisation, the associated infrastructure and rehabilitation. In particular, the Objectors took issue with the size of a ‘buffer’ area which was included in the mining lease to address impacts on amenity and livestock.

During the course of the hearing the Miner proposed revised boundaries for the mining leases, which significantly reduced the size of the buffer area and resolved the concerns of the Objectors. To that end, the Land Court was satisfied that the size and shape of the surface area of the mining leases was appropriate.

Is the term sought appropriate?

An objection was raised that the term sought (being 30 years) was inappropriate because the locality may not be ready to be exploited for potentially decades. However, on the basis of expert evidence adduced by the Miner, the court was satisfied that the term sought was appropriate. In this regard the Land Court noted that there is no prescribed limit for the term of a mining lease and that there was a statutory process for the extension of the term for a mining lease.

Does the Miner have the necessary financial and technical capabilities to carry on mining operations under the mining leases?

No objection was made about the technical capability of the Miner to carry out the mining activities contemplated by the mining leases. However, objections were raised about the financial capability of the Miner to carry out mining operations. No evidence was adduced to support those objections.

On the basis of expert evidence adduced on behalf of the Miner which addressed the economic and financial modelling for the mining activity, the Land Court concluded that the Miner had the necessary financial and technical capacity to undertake the mining activity contemplated by the mining leases.

Has the past performance of the Miner been satisfactory?

An objection was made in relation to the past performance of the Miner insofar that its experience was limited to exploration activities only and that this could therefore not be considered sufficient evidence in relation to the development of a coal mine. No evidence was adduced to support this objection.

The Miner provided evidence in the form of technical capability statements, human and technical resource commitments and deposed to never being issued with a show cause notice under the Mineral Resources Act or the Environmental Protection Act. On that basis, the Land Court was content that the past performance of the Miner was satisfactory.

Will the operations to be carried on under the authority of the proposed mining lease conform with sound land use management?

Objections were made that the proposed operations will not conform with sound land use management.

Whilst the hearing was limited to the mining leases and the objections to them, the Land Court nonetheless considered the accompanying environmental authority relevant in its assessment of whether the operations would conform to sound land use management. In this regard, the Land Court held that:

1. The detailed conditions of the environmental authority require the Miner to adopt an adaptive management approach in managing and mitigating a range of environmental impacts from its proposed mining activities;
2. The conditions of the environmental authority and the commitments adopt a sophisticated approach to managing the operations to be conducted under the mining leases, if granted; and
3. The conditions of the environmental authority evidence a commitment to sound land use management and provide a strong foundation for regulatory intervention if that is required.

Will the operations cause any adverse environmental impact and, if so, to what extent?

A number of objections were made in relation to the adverse environmental impacts of the proposed mining activities. In brief, they related to give broad issues in dispute relevant to water – namely:

1. The reduction in flow duration in the Isaac River;
2. The impact of a causeway on the flow of the Isaac River;
3. Flooding;
4. Mine water quality; and
5. Overland flow.

In ultimately finding that the environmental impacts could be appropriately managed and therefore that no conditions ought to be imposed, the Land Court held that:

1. The properties of the Objectors are well outside the zone affected by the groundwater drawdown and it is therefore reasonable to assume that there will be negligible, if any, impact on surface water downstream from the mining activities;
2. The groundwater drawdown will have some effect on the near surface groundwater. There will be an increase in the number of dry days as a result of mining, in the range of 14 to 19 days;
3. There is no evidence that there are any other users of near surface groundwater or that anyone else would be adversely affected by the mine in relation to that water resource;
4. If the design causeway complies with the guidelines there will be no material impact on the flow in the Isaac River;
5. There will be increased flood levels upstream of the mining activity and flooding of land owned by the Miner. There will also be increased velocity of water in those areas;
6. There was no expert evidence to allow the court to assess the issue of mine water quality; and
7. The mining activity will reduce the catchment area of the local overland flow path and minor creek in the north-east of the catchment from 56.9km2 to 48.3m2;

Will the public right and interest be prejudiced?

Having regard to its conclusions about impact on water, and in the absence of submissions to the contrary, the Land Court concluded that the public right and interest will not be prejudiced by the grant of the mining leases.

Has any good reason been shown for refusing the mining leases?

Objections were raised in relation to the impacts of noise, dust and lighting on cattle grazing in nearby pastures.

However, on the basis of joint reports produced by the parties’ respective experts, it was concluded that:

1. Grazing operations were unlikely to be impacted as a result of potential pollutants, including noise, dust, light or variation in water quality;
2. There are unlikely to be an unacceptable negative impact from the mining activities;
3. To the extent there are any changes to air quality, the acoustic environment, or lighting, they would have no impact on the growth and nutritional value of pastures; and
4. Proper compensation would ensure no adverse impact on the grazing operations carried out on the land the subject of the mining leases;

Taking into consideration the current and prospective uses of the land, is the proposed mining operation an appropriate land use?

Objections were made in relation to the rehabilitation of cattle grazing and biodiversity offsets, however, no evidence was adduced to support the notion that, on these grounds, the proposed use of the land was not appropriate. On that basis, and having regard to the assessment carried out by the state and federal governments, the court held that the mining activity was an appropriate use of the land.

Conclusion

In weighing the various factors that it must consider in making its recommendation, the Land Court observed that, despite “significant adverse and residual environmental impacts”, there is strong evidence of significant social and economic benefits. The Land Court therefore recommended that the mining lease be granted.

Implications

This decision serves as an important reminder to objectors to mining leases of the need to clearly define their grounds for objection and to adduce sound evidence (preferably by way of expert evidence) to support those objections. Absent evidence to substantiate objections, the Land Court must rely upon the miner’s material and the assessment reports of the relevant government authorities.

This is particularly so where objections are raised in relation to environmental issues as the Land Court remains willing to recommend the grant of mining leases on the basis of their social and economic benefits despite recognised environmental impacts.