Mandalong Southern Extension Project Production Increase ...

Mandalong Southern Extension Project Production Increase Modification

(SSD 5144 MOD 3)

Environmental Assessment Report Section 96(1A) of the Environmental Planning and Assessment Act 1979

1. BACKGROUND Centennial Mandalong Pty Limited (Centennial) owns and operates the Mandalong Coal Mine, located near Morisset, approximately 35 kilometres southwest of Newcastle, in the Central Coast and Lake Macquarie local government areas (see Figure 1).

Figure 1: Location of the Mandalong Coal Mine

Mandalong Southern Extension Project – Modification 3 Secretary’s Environmental Assessment Report

NSW Government Department of Planning and Environment 2

The Mandalong Mine was originally approved under development consent DA 97/800 granted in 1998. Centennial acquired the mine in 2002, and commenced longwall mining in 2005. In October 2015, consent was granted for the Mandalong Southern Extension Project (MSEP) under SSD 5144. The MSEP involves the continuation of existing mining operations, as well as the development of an additional 40 longwall panels in the Southern Extension Area, with an overall extraction rate of up to 6 million tonnes per annum (Mtpa) of run-of-mine (ROM) coal over a 25 year period. 2. PROPOSED MODIFICATION On 9 September 2016, Centennial lodged a modification application under section 96(1A) of the EP&A Act. This modification involves: increasing the annual production limit from 6.0 to 6.5 Mtpa of ROM coal; and minor administrative changes to existing conditions. The key aspects of the proposed modification are outlined in Table 1. While an increase in the annual production rate would reduce the operational lifespan of the mine, no change to the current approval period is sought. Table 1: Key aspects of the existing and proposed development

Aspect Existing Operation Proposed Modification

Site Access Access to the Mandalong Mine Access Site (MMAS) is via Kerry Anderson Drive off Mandalong Road adjacent to the M1 Pacific Motorway.

Once constructed, access to the Mandalong South Surface Site (MSSS) will be via the approved MSSS Access Road.

No change.

Underground Mine Access

Access to the underground mine is via mine portals situated at the pit top and via existing headings and roadways.

No change.

Development Mandalong Mine has an approved underground mining area under SSD-5144.

No change.

Longwall Mining and Production

Mandalong Mine is approved to produce up to 6.0 Mtpa of ROM coal.

Mandalong Mine has an approved underground mining area under SSD-5144.

Increase production to 6.5 Mtpa of ROM coal.

Mine Life Under Development Consent SSD-5144, mining operations are permitted to 31 December 2040.

No change

Underground Mine Ventilation

Two operating ventilation fans at the MMAS and Cooranbong Entry Site (CES), and one approved but yet to be constructed (MSSS).

No change

Hours of Operation

The mine currently operates 24 hours per day, 7 days per week. No change

Employment Mandalong Mine currently has provision to employ up to 420 full-time equivalent employees as well as an additional 50 contractors during longwall relocations.

No change

Supporting Surface Infrastructure

Supporting surface infrastructure designed to control and manage water, ventilation, materials delivery, equipment maintenance etc. is situated at the MMAS and (following construction) at the MSSS.

No change

Coal Preparation and Handling

No coal preparation or handling is undertaken by Mandalong Mine. All ROM coal is delivered to Centennial’s Northern Coal Logistics site for processing and dispatch.

No change

Waste Coal Management

As coal is not processed at Mandalong Mine, coarse and fine reject material is not generated at the site.

No change



Surface Water Management

Current water management occurs in accordance with the Mandalong Mine Site Water Management Plan.

No change

Land Preparation

Land preparation required to establish the access road and construction area for the MSSS.

No change

Rehabilitation Given that Mandalong Mine is an underground coal operation, rehabilitation is currently limited to small areas following exploration or construction or when surface infrastructure is decommissioned.

No change

In addition to the proposed production increase, Centennial is also seeking some minor changes to the existing conditions of SSD 5144. These involve: altering conditions 16 and 17 of Schedule 3 to remove matters relating to Centennial’s Northern Coal

Logistics (NCL) Project (SSD 5145); changing the submission date for the Land Management Strategy under condition 18 of Schedule 3; renumbering sub-paragraphs in condition 30 of Schedule 3; and replacing the Development Application Area plan in Appendix 2 of the consent (see Figure 2) with

the amended plan shown in Figure 3. 3. STATUTORY CONTEXT 3.1 Section 96(1A) The modification application proposes to modify the consent granted under SSD 5144 in accordance with section 96(1A) of the EP&A Act. Section 96(1A)(a) stipulates that a consent cannot be modified unless the consent authority is satisfied that the proposed modification is of minimal environmental impact. Following a detailed assessment of the proposal, the Department is satisfied that the modification is of minimal environmental impact. By operation of section 96(1A)(b), a consent cannot be modified unless the consent authority is satisfied that the modified proposal is substantially the same development as the development for which consent was originally granted. The modification application involves a relatively minor production increase and some administrative changes to existing conditions. On this basis, the Department is satisfied that the proposed modification is within the scope of section 96(1A), and may be determined accordingly. 3.2 Approval Authority The Minister for Planning is the approval authority for the application. However, the Director, Resource Assessments may determine the application under the Minister’s delegation of 16 February 2015, as there were no public objections, Central Coast and Lake Macquarie City Councils did not object to the proposal, and no political donations have been reported by Centennial. 3.3 Environmental Planning Instruments A number of environmental planning instruments apply to the modification, including: State Environmental Planning Policy (SEPP) (Mining, Petroleum Production and Extractive

Industries) 2007; SEPP (Infrastructure) 2007; SEPP (State and Regional Development) 2011; SEPP No 33 – Hazardous and Offensive Development; Lake Macquarie Local Environmental Plan 2004; Lake Macquarie Local Environmental Plan 2014; and Wyong Local Environmental Plan 2013. The Department has assessed the proposed modification against the relevant provisions of these instruments. Based on this assessment, the Department is satisfied that the proposed modification can be carried out in a manner that is consistent with the aims, objectives and provisions of these instruments. 4. CONSULTATION After accepting the Statement of Environmental Effects (SEE) for the proposed modification, the Department:

publicly exhibited the SEE from 6 to 24 October 2016 on the Department’s website and at: - the Department’s Information Centre;



- Central Coast Council’s Administration Centre; - Lake Macquarie City Council’s Administration Centre; and - the Nature Conservation Council’s office.

advertised the exhibition of the SEE in the Lakes Mail and the Central Coast Express Advocate; and

notified relevant State Government authorities and Councils. The Department is satisfied that the notification process met the requirements of the EP&A Act and the Environmental Planning and Assessment Regulation 2000.

Figure 2: Current Development Application Area



Figure 3: Proposed Development Application Area

4.1 Agency Submissions The Department received a total of 9 submissions from government agencies. The Department of Primary Industries (DPI) did not raise any objections to the proposed modification. However, DPI advised that Centennial should develop its Water Management Plan and Rehabilitation Plan in consultation with DPI Water. The Water Management Plan should also be updated to address remediation measures and water licensing requirements for tensile and compressive cracks which may develop in the surface zone. This issue is addressed in Section 5.1 of this report.

The Division of Resources & Energy (DRE) within the NSW Department of Industry expressed its support for the proposed modification.

The Environment Protection Authority (EPA) raised no objections and advised that the modification would not require any variation to the site’s Environment Protection Licence (EPL). The Heritage Council of NSW raised no concerns, on the basis that the proposed modification is unlikely to have any additional impacts beyond those previously assessed.

The Hunter New England Local Health District did not raise any objections on the basis that the proposed modification would have minimal health impacts.

The Office of Environment and Heritage (OEH) advised that it has no objections to the proposed modification and did not recommend any further changes to existing conditions.

Roads and Maritime Services advised that it has no objections to the proposed modification as it would have no significant impact on the State Road Network.

Subsidence Advisory NSW advised that it has no objections to the proposed modification.

Lake Macquarie City Council raised concerns regarding potential increases in greenhouse gas emissions as a result of the proposed modification. Centennial addressed these concerns in its Response to Submissions (RTS), and the issue is discussed in Section 5.2 of this report.



Central Coast Council did not make a submission.

4.2 Public Submissions The Department did not receive any public submissions. 5. ASSESSMENT

The Department has assessed the merits of the proposed modification in accordance with the relevant objects and requirements of the EP&A Act. In assessing these merits, the Department has considered the: Environmental Impact Statement (EIS) for the original development application; conditions of consent for the development as originally approved; modification application and associated Statement of Environmental Effects (SEE); and relevant environmental planning instruments, policies and guidelines.

The Department considers that the key impacts of the modification relate to water resources, air quality and greenhouse gas emissions.

5.1 Water Resources The SEE included a Groundwater and Water Balance Modelling Report (GWBMR), which was based on a recalibration of the original hydrogeological model developed for the MSEP and applied in the original EIS. The revised model incorporates up-to-date groundwater inflow data collected since development of the original model.

5.1.1 Groundwater The groundwater resources in the vicinity of the Mandalong Mine are typically low yielding, and predominantly within Quaternary alluvium, weathered and/or fractured sandstone and coal seams. Based on a production rate of 6.5 Mtpa, the GWBMR indicates that total groundwater inflows into the Cooranbong, Mandalong and Mandalong South underground workings would peak at approximately 2.1 megalitres (ML) per day in 2030. This is less than previous predictions in the MSEP EIS, based on a maximum production rate of 6.0 Mpta. This disparity can be explained by the recalibrated model, which is more reflective of actual site conditions, and the conservatism of the original modelling.

As groundwater inflows resulting from the proposed modification are predicted to be less than those presented in the MSEP EIS, no additional impacts on aquifers are anticipated. The GWBMR concludes that underground workings at Mandalong South would not cause a drop in the water table greater than 0.1 metre within the alluvial groundwater or the outcropping Triassic sandstone.

There is, however, potential for tensile and compressive cracks to develop within the surface zone, which could result in increased hydraulic conductivity and porosity. In its submission, DPI recommended that this issue be addressed in an updated Water Management Plan. However, the Department notes that these risks were previously identified in the MSEP EIS, and there are existing performance criteria with respect to compressive cracking under the current consent. The Department is therefore satisfied that the groundwater impacts of the proposed modification would be minimal, and could be suitably managed under existing conditions of consent.

5.1.2 Surface Water Mine-water collected from underground workings at Mandalong is pumped to the surface at the CES and discharged at that site’s Licenced Discharge Point (LDP) 001. The CES forms part of Centennial’s NCL Project, which is the subject of a separate development consent (SSD 5145). The GWBMR estimates that the annual discharge from the MSEP to LDP001 for end of mining conditions would be 1163 ML. This is less than the annual discharge predicted in the MSEP EIS. Again, this disparity can be explained by a reduction in predicted groundwater inflows under the recalibrated model. On this basis, the Department is satisfied that surface water impacts associated with the proposed production increase would be minimal. Centennial is also seeking to alter conditions 16 and 17 of Schedule 3, which relate to the downstream impacts of mine-water discharges. Condition 16 of Schedule 3 specifies performance measures for the maintenance of aquatic and riparian ecosystems in affected sections of LT, Stony and Lords Creeks, as well as unnamed watercourses which receive discharges from the Hawkmount Quarry and the CES, and both Muddy Creek and Muddy Lake. Condition 17(d)(ii) of Schedule 3 requires Centennial to include, as part of its Surface Water Management Plan, detailed performance criteria to ensure downstream watercourse channel stability, ‘particularly for the Fassifern Archery Club section



of LT Creek’. Centennial contends that these requirements relate to the NCL Project, and not to the MSEP. The above requirements were imposed by the Planning Assessment Commission (the Commission) in response to public submissions regarding the impact of mine-water discharges on Muddy Lake. In its determination report, the Commission acknowledged that the MSEP did not include the transfer of mine-water to LDP001, and that this fell within the boundaries of the NCL Project. However, the Commission was of the view that the downstream impacts of mine-water discharges stemming from MSEP should still be considered in its assessment of SSD 5144. The Commission’s concerns led to a strengthening of conditions under the NCL consent. These conditions were then duplicated in the MSEP consent, in order to provide a link between the two consents and Centennial’s EPL. However, it appears that some of these requirements were duplicated in error, as they relate solely to discharges from the Newstan and Awaba Collieries, as well as the Hawkmount Quarry. These sites form part of the NCL Project only, and bear no relationship to the MSEP. The Department is therefore satisfied that condition 16 should be amended to remove references to LT, Stony and Lords Creeks, as well as discharges from Hawkmount Quarry. Similarly, the Department is satisfied that the reference to the ‘Fassifern Archery Club section of LT Creek’ in condition 17 should be removed, as this relates to the Newstan Colliery, and has no relevance to the MSEP. However, the Department considers that the general requirement to address downstream watercourse channel stability should be retained. Centennial is also seeking to remove references to the downstream impacts of the CES, which is clearly contrary to the intentions of the Commission. While it is conscious of Centennial’s preference to maintain a clear division between the MSEP and NCL Projects, the Department is also mindful that the management of the downstream impacts was a key consideration for the Commission in its determination. Centennial has not provided compelling justification to alter the conditions, as set by the Commission. Therefore, the Department considers that references in condition 16 to the CES’s downstream impacts on unnamed watercourses, Muddy Creek and Muddy Lake should be retained. 5.2 Air Quality Air quality impacts associated with the MSEP stem mainly from existing or proposed ventilation fans located at the MMAS, MSSS and CES. The SEE includes an Air Quality Impact Assessment (AQIA) which identifies 29 receivers surrounding the MMAS and MSSS (see Figure 4), and a further 9 receivers in proximity to the CES (see Figure 5). The AQIA modelled emissions for three separate operating scenarios, based on a production rate of 6.5 Mtpa.

Scenario 2a assessed the impacts of gas flares at the MMAS, in conjunction with the operation of existing ventilation fans at the MMAS and MSSS. Scenario 2b involved the operation of gas engines at MMAS in conjunction with ventilation fans at both MMAS and MSSS. Finally, Scenario 5a considered the combined impacts of coal handling from Mandalong Mine, the dispatch of coal to Newstan Colliery by road, and the operation of the ventilation fan at the CES.

The proposed modification was then assessed against the air quality criteria in the existing consent (see Table 2 below) which are consistent with the EPA’s standard criteria as specified in the Approved Methods for the Modelling and Assessment of Air Pollutants in NSW.

Table 2: Air quality criteria

Pollutant Averaging

Period Criterion

Particulate matter < 10 µm (PM10) Annual 30 µg/m3

Particulate matter < 10 µm (PM10) 24 hour 50 µg/m3

Total suspended particulates (TSP) Annual 90 µg/m3

Deposited Dust Annual Max increase of 2 g/m2/month (incremental) Max total of 4 g/m2/month (cumulative)



Figure 4: Receivers Surrounding the MMAS and MSSS



Figure 5: Receivers Surrounding the Cooranbong Entry Site Under each of the three modelled scenarios, predicted concentrations of PM10, TSP and deposited dust remained well within the specified criteria at all identified receivers. On this basis, the Department is satisfied that the air quality impacts of the proposal are acceptable, and that the modified project would be able to operate in compliance with all relevant air quality criteria.

Note: Ventilation fans shown in ‘orange’ circle.



5.3 Greenhouse Gas Emissions The MSEP EIS included a Greenhouse Gas Assessment (GGA). This assessment estimated the greenhouse gas emissions over the life of the mine using a three scope analysis, consisting of Scope 1 (emissions that occur as a direct result of the development) and Scope 2 and 3 (emissions that occur as an indirect consequence of the development). Emissions generated by the MSEP, both directly and indirectly, would represent approximately 0.24% of Australia’s total annual greenhouse gas production.

The SEE included a revised three scope analysis which estimated annual greenhouse gas emissions based on a production rate of 6.5 Mtpa (see Table 3).

Table 3: Annual greenhouse gas emissions

Scope Emission Source Maximum Annual

Emissions (t CO2-e) at 6 Mtpa

Maximum AnnualEmissions (t CO2-e)

at 6.5 Mtpa

Percentage Change in Annual Emissions

Scope 1 Ventilation air emissions 1,274,035 1,385,486 10.6% increase

Pre-drainage gas 429,837 429,837 0%

Diesel combustion 2,640 2,870 8.7% increase

Scope 1 Sub-total 1,706,512 1,818,193 6.5% increase

Scope 2 Electricity consumption 107,152 116,471 8.7% increase

Scope 1 and 2 Sub-total 1,813,664 1,934,664 6.7% increase

Scope 3 Product coal combustion

14,325,660 15,571,370 8.7% increase

Total 16,139,324 17,506,034 8.5% increase

This assessment concluded that the proposed modification would increase total annual greenhouse gas emissions by up to 8.5 percent. However, as the modification would also shorten the lifespan of the mine, these impacts would occur over a shorter timeframe, and total emissions over the life of the mine would remain unchanged.

In its submission, Lake Macquarie City Council raised concerns regarding the 8.5 percent annual increase, and its associated cumulative impacts. Council also noted that Centennial received grant funding to trial a Ventilation Air Methane Regenerative After Burner (VAM RAB) at the site, and recommended that in the event this technology proves to be effective, Centennial should be required to implement it on an ongoing basis.

In its RTS, Centennial advised that it has obtained development consent for the construction and operation of a demonstration-scale VAM RAB, as part of a trial project aimed at the capture and abatement of ventilation air methane at the site. This trial is ongoing, and it remains unclear whether VAM RAB technology will be viable over the long-term. Centennial contends that it would be premature to impose any condition which requires permanent implementation of this technology. Existing conditions require Centennial to prepare an Air Quality and Greenhouse Gas Management Plan and to implement best practice management in an effort to reduce emissions.

The proposed modification would result in a relatively minor increase in greenhouse gas emissions over a shorter period, and with no overall increase in emissions over the life of the mine. The Department considers that the greenhouse gas impacts of the proposal are acceptable, and would be suitably mitigated under existing conditions of consent.

5.4 Other impacts The proposed modification also involves some further administrative changes to the existing consent. The Department is satisfied that these changes would have no discernible environmental impact.

Firstly, Centennial proposes to change the submission date for its Land Management Strategy (see condition 18 of Schedule 3) from 3 December 2016 to 30 December 2016. Secondly, Centennial is seeking to correct a duplication in the numbering of sub-paragraphs in condition 30 of Schedule 3. The Department is satisfied that these are drafting errors and should be corrected as proposed.

Finally, Centennial is seeking to replace the Development Application Area (DAA) plan in Appendix 2 of the consent. Centennial submits that the current plan (see Figure 2) is incorrect, as it does not align



with the Schedule of Land in Appendix 1. The amended plan, which is presented in Figure 3, expands the DAA, and is consistent with both the Schedule of Land and the DAA depicted in the MSEP EIS. The Department is therefore satisfied that the existing DAA plan in Appendix 2 should be replaced with the revised plan in Figure 3.

Other issues associated with the modification relate to noise and vibration and socio-economics. Table 4 summarises the Department’s assessment of these impacts.

Table 4: Other impacts

Issue Impact and Consideration Recommendation

Noise and Blasting

Existing conditions allow the mine to operate 24 hours per day, 7 days per week.

The consent imposes a number of conditions with respect to noise and blasting impacts, including operational noise criteria for all affected receivers, and time restrictions on blasting. Centennial is also required to implement best management practice to minimise construction, operational and road noise impacts.

There are no changes to the existing noise and blasting conditions proposed as part of the modification.

The Department considers the proposed modification would not increase the noise and blasting impacts of the operation.

Noise and blasting impacts would continue to be managed under existing conditions, including the site’s Noise Management Plan.

Socio-economic The SEE includes assessments of the proposal’s potential social and economic impacts, prepared by Centennial and AIGIS Group respectively.

The SEE concludes that the proposed modification would not materially change the likelihood or magnitude of localised biophysical and amenity impacts associated with the project. As such, Centennial contends that that the social impacts of the modification would be negligible.

The Cost-Benefit Analysis conducted by AIGIS Group indicates that the proposal would lead to a marginal improvement in the economic outcomes of the project. These benefits would result from the earlier realisation of returns as the mining program is accelerated.

It is estimated that the proposed modification would increase the economic and related social benefits of the project by approximately $20 million, based on Net Present Value (NPV).

The proposed modification is expected to yield an addition $24 million NPV in royalty revenues.

No changes to current employment numbers are proposed.

The Department considers that the proposed modification would increase the economic benefits of the project.

Furthermore, the Department is satisfied that these benefits could be achieved without substantially increasing environmental impacts or the demand on local services and infrastructure.

6. RECOMMENDED CONDITIONS The Department has drafted a recommended Notice of Modification (see Appendix C) and a consolidated version of the consent as it is proposed to be modified (see Appendix D). The Department considers that the environmental impacts of the project can be appropriately managed through the proposed amended conditions of consent.

Centennial has reviewed the recommended conditions and provided feedback. The Department has considered the company’s comments in finalising the recommended Notice of Modification. 7. CONCLUSION The Department has assessed the modification application, SEE and submissions in accordance with the relevant requirements of the EP&A Act. The Department has carefully considered the likely impacts of the proposal on the environment and nearby residents. The Department is satisfied that the proposed modification is of minimal environmental impact. Moreover, the Department is satisfied that these impacts can be appropriately managed by existing, modified and/or updated conditions of consent.


APPENDIX A: STATEMENT OF ENVIRONMENTAL EFFECTS

See: http://majorprojects.planning.nsw.gov.au/index.pl?action=view_job&job_id=7948


APPENDIX B: SUBMISSIONS

See: http://majorprojects.planning.nsw.gov.au/index.pl?action=view_job&job_id=7948


APPENDIX C: NOTICE OF MODIFICATION


APPENDIX D: CONSOLIDATED CONSENT

Mandalong Southern Extension Project Production Increase ...

Documents

Transcript of Mandalong Southern Extension Project Production Increase ...