MAJOR PROJECT ASSESSMENT Chain Valley Extension Project (SSD 5465)

Transcription

1 MAJOR PROJECT ASSESSMENT Chain Valley Extension Project (SSD 5465) Section 89E of the Environmental Planning and Assessment Act 1979 December 2013

2 Cover Photo: The pit top facilities at the Chain Valley Colliery, with the Vales Point Power Station in the background. Crown copyright 2013 December 2013 NSW 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.

3 EXECUTIVE SUMMARY The Chain Valley Colliery is an underground coal mine located approximately 60 kilometres south of Newcastle, at the southern end of Lake Macquarie within the local government areas of Wyong and Lake Macquarie. LakeCoal Pty Limited (LakeCoal), a wholly owned subsidiary of LDO Coal Pty Limited, owns and operates Chain Valley. Chain Valley currently operates under a 2012 Ministerial approval that allows LakeCoal to extract up to 1.2 million tonnes (Mt) of run-of-mine (ROM) per year coal using underground mining methods until Coal is transported by public road to Port Waratah Coal Services (Port Waratah) at Newcastle for export and by private haul road to the nearby Vales Point Power Station. LakeCoal is now proposing to expand its underground mining area by approximately 660 hectares to the north and south of its existing operations (which are wholly beneath Lake Macquarie), to gain access to an additional 19.5 Mt of ROM coal. This would support continued mining operations until The proposed development (known as the Chain Valley Extension Project) would increase the extraction rate of coal to 1.5 Mt of ROM coal a year, and involve upgrading the surface facilities and allow trucking of coal 24 hours, 7 days a week to Vales Point. The Department received 28 submissions on the proposal: 13 from public authorities, 1 from a special interest group and 14 submissions from local residents. None of the government authorities objected to the proposal, and all public submissions including the special interest group supported the project. The key concerns raised in submissions related to continued transport of coal on public roads, the impacts of subsidence on the bed of Lake Macquarie and associated biodiversity impacts. The proposal is State Significant Development under Section 89C of the Environmental Planning & Assessment Act 1979 (EP&A Act). The Department has carried out a detailed assessment of the merits of the proposed development in accordance with the requirements of Section 79C of the EP&A Act. Sensitive natural features in the mining extension area include the foreshore of Lake Macquarie and seagrass beds in the Lake. To protect these natural features, LakeCoal proposes to use subsidence control zones to avoid or limit subsidence impacts. This approach has previously been used successfully at both Chain Valley and the nearby Myuna Colliery. A proposed marina development within the extension area has concept approval. To protect built features, conditions of consent have been recommended setting performance measures which ensure that serviceability is maintained wherever practicable, and that any loss of serviceability or damage is fully compensated or repaired. The Department is satisfied that the application of subsidence control zones and the recommended conditions of approval would avoid any subsidence impacts on the lake foreshore or seagrass beds and provide an adequate and appropriate level of protection for other natural features and the built environment. The proposal would not increase the rate at or hours over which coal is transported along public roads to Port Waratah. However, it would increase the duration over which coal trucks would use public roads by up to 14 years. The traffic assessment indicates that there is sufficient capacity in the existing road network to cater for continued transport of coal along public roads until The Department recognises that road transportation of coal is a sensitive issue for the general public. Wherever feasible and reasonable, the expects coal to be transported by rail. However, it is important to note that at this time it is not economically feasible for LakeCoal to construct the relevant rail connections to the rail network or rail loading infrastructure. The Department accepts that coal transport by public road is the only currently economically viable method to deliver coal to Port Waratah, but has recommended a range of measures to minimise traffic safety and capacity impacts, including annual audits to assess the safety and performance of coal trucks on the local road network. The development is not expected to have any additional amenity impacts on surrounding residences, when compared to the mine s current operations, which have been taking place for the past 50 years. 1

4 However, the Department has recommended conditions requiring LakeCoal to monitor air and noise emissions to control impacts, particularly for neighbouring residents and to pursue long-term noise reduction goals, where reasonable and feasible to do so. The Department has assessed the potential impacts of the proposed development on other values, including Aboriginal heritage, surface water, groundwater, aquatic ecology, and visual amenity. The Department is satisfied that any impacts relating to these matters would not be significant. The proposed development would result in a range of ongoing social and economic benefits including: continued employment of 120 employees for another 14 years; additional capital investment of $105 million; and provision of a total of $64 million of royalties to the. Overall, the Department is satisfied that the proposed development would not result in any significant additional environmental impacts when compared to the mine s current operations, and that any residual impacts can be managed, mitigated or offset through appropriate conditions of consent. To this end, the Department has reviewed the current project approval for the Chain Valley Colliery, and has strengthened and updated the conditions to be consistent with other recently approved underground coal mining operations in NSW. The Department is satisfied that the proposed development is in the public interest, and should be approved subject to the recommended conditions of consent. 2

5 1. BACKGROUND 1.1 Introduction The Chain Valley Colliery (Chain Valley) is an underground coal mine located approximately 60 kilometres (km) south of Newcastle, in the local government areas (LGAs) of Wyong and Lake Macquarie (see Figures 1 and 2). LakeCoal Pty Limited (LakeCoal), a wholly owned subsidiary of LDO Coal Pty Limited, owns and operates Chain Valley. Figure 1: Location of the Chain Valley Colliery 3

6 1.2 Existing Operations Chain Valley has operated since Until 2011, the mine employed bord and pillar and pillar extraction methods (both partial and full pillar extraction). Mining has taken place within three coal seams in the Newcastle Coal Measures (the Wallarah, Great Northern and Fassifern Seams). In 2011, miniwall mining was introduced. Miniwall mining is more efficient than bord and pillar mining and pillar extraction, since it recovers a greater proportion of the coal resource while using fewer workers. The term miniwall is used to distinguish the narrower width and shorter length of the extraction panels used at Chain Valley when compared to conventional longwall mining. Panel width at Chain Valley is up to 97 metres (m), compared to longwall panel widths commonly between m. LakeCoal considers that the miniwall mining method is preferable due to geotechnical, safety and subsidence management considerations as a consequence of the mining activities being below Lake Macquarie. On 23 January 2012, LakeCoal was granted project approval (MP 10_0161) for Chain Valley under Part 3A of the Environmental Planning & Assessment Act 1979 (EP&A Act) by the Minister for Planning and Infrastructure. The extent of the currently approved underground mining footprint and associated pit top facilities are shown in Figure 2. The original project approval was modified in August The modified approval allows LakeCoal to: extract up to 1.2 million tonnes per annum (Mtpa) of run-of-mine (ROM) coal from beneath Lake Macquarie until the end of 2016, by using the following underground mining methods: o bord and pillar; o partial and full pillar extraction; and o miniwall extraction; crush and stockpile ROM coal at the Chain Valley pit top facilities; and transport coal on public roads to Port Waratah Coal Services (Port Waratah) and other domestic customers and by private haul road to Vales Point Power Station (Vales Point) between 5:30 am to 5:30 pm Monday to Friday (excluding public holidays). LakeCoal has since identified adverse geological features within its approved secondary extraction area, which has reduced its available coal reserve from 5.25 million tonnes (Mt) to 3.1 Mt. LakeCoal estimates that mains development in its approved mining area would be completed by early January 2013, and that by late 2014, all coal reserves within its approved mining area will be exhausted. 1.3 Location and Setting Chain Valley is located at the southern end of Lake Macquarie, approximately 6 km east of the M1 Pacific Motorway (formerly the Sydney to Newcastle Freeway) and about 5 km northeast of Wyee (see Figure 1). The existing and proposed underground mining areas would be wholly beneath the bed of Lake Macquarie. The pit top is located adjacent to Vales Point in the suburb of Mannering Park. The ventilation shaft and fans are located at Summerland Point, located northeast of the pit top facilities across Chain Valley Bay (see Figure 2). Nearby surrounding residential areas include the suburbs of Kingfisher Shores and Chain Valley Bay to the southeast, Mannering Park to the northwest and Summerland Point and Gwandalan to the northeast. The closest privately owned residences to the pit top are located at Kingfisher Shores, approximately 350 m southeast of the pit top (see Figure 2). Nearby areas of native vegetation include the Lake Macquarie State Conservation Area (SCA). LakeCoal also owns a large vegetated block of land at Summerland Point, adjacent to the SCA, on which its fans and ventilation shafts are located (see Figure 2). Additional fragmented areas of vegetation surround the mine s pit top facilities, except to the northwest. Aquatic vegetation includes the seagrass beds that line the foreshore of Lake Macquarie (see Figure 2). A number of other underground coal mines are located north and west of Chain Valley - Myuna Colliery, Mannering Colliery and Mandalong Mine. All three of these mines are owned by subsidiaries of Centennial Coal. Myuna Colliery was granted project approval in January 2012 allowing continued operations until Mandalong Mine operates under two development consents, granted in 1998 and 2004, which together allow mining operations until around Mannering Colliery is on care and maintenance. LakeCoal s current mining leases border mining leases of these three other mines. LakeCoal proposes to sublease portions of these mining leases in order to carry out the proposed development (discussed in Section 2.1 below). 4

7 Chain Valley Extension Project Nearby significant infrastructure includes the Vales Point Power Station, located immediately northwest of the pit top facilities, and the power station s associated power lines and easement, which traverse the pit top site. The Mannering Park Sewage Treatment Facility is located about 500 m south of the pit top site. The Mannering Colliery pit top facilities are located a further 500 m to the south. Figure 2: Existing and Proposed Underground Mining Footprint 5

8 2. PROPOSED DEVELOPMENT 2.1 Chain Valley Extension Project LakeCoal is now proposing to expand the existing underground mine and upgrade the existing pit top facilities. The proposed development (known as the Chain Valley Extension Project) involves (see Figures 3 and 4): extending the currently approved extraction area beneath Lake Macquarie from approximately 230 ha to 890 ha to allow continued miniwall underground mining within the Fassifern Seam to extract up to 19.5 Mt of ROM coal; subleasing areas of mining lease from the Myuna, Mannering and Mandalong mines; increasing the maximum rate of ROM coal extraction and sale from 1.2 Mtpa to 1.5 Mtpa; increasing the approved hours of haulage to Vales Point from 5:30 am to 5:30 pm weekdays to 24 hours a day, 7 days a week; continued transport of coal via public roads to Port Waratah from 5:30 am to 5:30 pm weekdays; upgrading and replacing existing aged infrastructure at the pit top facilities including upgrading the sediment dam wall and spillway; extending the life of the mine from 2016 to 2027; increasing use of potable water from 105 to 120 megalitres per year (ML/year); and rehabilitating the site. The key components of the proposed extension are summarised in Table 1 (see below), and fully described in LakeCoal s Environmental Impact Statement (EIS) (see Appendix E). Table 1: Comparison of Existing/Proposed Operations at Chain Valley Colliery Aspect Existing Proposed Rate of Up to 1.2 Mtpa Up to 1.5 Mtpa Production Mine Life To end the end of 2016 To the end of 2027 Coal Reserves 4.4 Mt of ROM coal in the Fassifern Seam 19.5 Mt of ROM coal in the Fassifern Seam Hours of Operation Mining operations 24 hours a day, 7 days a week Mining operations 24 hours a day, 7 days a week Mining Methods Mining Area Operational Workforce Coal Transport General Infrastructure Coal transport by truck: 5.30 am and 5.30 pm weekdays Bord and pillar (partial and full pillar extraction) Miniwall extraction (panel width up to 97 m) Up to 9 miniwall panels, wholly beneath Lake Macquarie, covering 230 hectares (ha) Continued employment of 120 existing staff, as well as associated truck drivers Up to 270 laden trucks per day to transport coal to Port Waratah along public roads Use of existing surface facilities including: personnel-and-materials drifts, ROM coal conveyor drift; upcast and downcast ventilation shafts; coal handling facilities for breaking, crushing, sizing and storing product coal; administration and workshop facilities; water management infrastructure; and installation and operation of upgraded ventilation fans. Coal transport by truck: 24 hours a day, 7 days a week on private road to Vales Point; and 5:30 am to 5:30 pm weekdays on public roads No change Up to 45 miniwall panels, wholly beneath Lake Macquarie, covering 890 ha Continued employment of 120 existing staff and 40 fulltime equivalent contractors No change Continued use of infrastructure at the existing pit top until completion of mining Upgrading a range of infrastructure, including: replacing crushers and screens, surface conveyors and drift conveyors and secondary electric haulage system; installing additional lighting near coal stockpiles, buildings and roads; upgrading/replacing existing water storage tanks and pump; replacing air compressors; upgrading the final sediment dam wall 6

9 and installing a formed spillway; using mobile secondary coal screening plant (up to 3 days a month); and upgrading or replacing the bathhouse facility. Rehabilitation Following completion of underground mining, pit top facilities would be decommissioned, rehabilitated and revegetated No change Capital Investment Value Any surface subsidence impacts would be progressively repaired, rehabilitated and/or restored to meet applicable completion criteria $ 25 million $105 million The proposed expanded underground mining area is known as Area 1. Some sections of the proposed mining area are outside of Chain Valley s current project approval area and are subject to other existing mining leases, held by subsidiaries of Centennial Coal (see Figure 5). These areas of land are also subject to other development approvals, as follows: project approval 06_0311 Mannering Colliery (Area 1A); project approval 10_0080 Myuna Colliery (Area 1B) ;and development consent DA 97/800 Mandalong Mine (Areas 1B and 1C). None of Centennial Coal s planning approvals would be surrendered or consolidated. Therefore, any development consent granted for this proposal would overlap in part with the planning approvals held by Centennial Coal. 3. STATUTORY CONTEXT 3.1 State Significant Development The proposed development is State Significant Development for the purposes of Section 89C of the EP&A Act since it is development for the purposes of coal mining, as specified in Clause 5 of Schedule 1 to State Environmental Planning Policy (State and Regional Development) Consequently, the Minister for Planning and Infrastructure is the consent authority for the development. However, under the Minister s delegation dated 27 February 2013, the Executive Director, Development Assessment Systems and Approvals may determine the development application because none of the relevant Councils objected to the proposed development, a political donations disclosure statement has not been made, and there were less than 25 public submissions in the nature of objections. 3.2 Overlapping Planning Approvals As noted above, some sections of LakeCoal s proposed mining area are outside of Chain Valley s current project approval area and are subject to other existing mining leases and development consents, held by Centennial Coal (see Figure 5). Subject to grant of development consent, LakeCoal s right to extract coal reserves from within mining leases held by Centennial Coal would be regulated by a registered sublease between LakeCoal and Centennial Coal under Section 163 of the Mining Act Centennial supports LakeCoal s development application and has already reached agreement with LakeCoal to mine within these areas. The Minister has the legal power to grant overlapping planning approvals. However, as a matter of policy, the granting of overlapping planning approvals should be limited to circumstances where it does not cause ambiguities about the application of the relevant planning approvals. The Department is satisfied that the two coal companies have come to an agreement which would allow LakeCoal to mine within Centennial s mining leases, using a different mining layout and methods than are currently permitted under Centennial s development consents. The Department accepts that the grant of an overlapping consent to LakeCoal is appropriate in the circumstances. 7

10 Figure 3: Chain Valley Extension Project Layout 8

11 Chain Valley Extension Project Figure 4: Existing and Proposed Pit top Facilities 9

12 Figure 5: Proposed Mining Areas, Showing Areas Subject to Neighbouring Mining Leases 10

13 3.3 Permissibility The proposed development is located in the Lake Macquarie and Wyong LGAs. Permissibility of the various components of the development under the Lake Macquarie Local Environmental Plan 2004 (Lake Macquarie LEP) and the Wyong Local Environmental Plan 1991 (Wyong LEP) is summarised in Table 2. Under the Lake Macquarie and Wyong LEPs, the proposed development is permissible within consent in all relevant zones. Table 2: Permissibility of Project Components Zone Project Component Permissible Lake Macquarie LEP Zone 11 Lakes and Waterways Zone Underground Mining Yes Wyong LEP No. 5(a) (Special Uses Power Stations) Pit top and Ventilation Shaft Yes No. 7(g) (Wetlands Management Zone). Sedimentation Dams Discharge Area Yes However, both Councils have submitted new draft LEPs to the Department for finalisation. While neither LEP is yet in force, the permissibility of the project would vary significantly under the new zonings, as summarised in Table 3. Table 3: Proposed Permissibility of Project Components Zone Project Component Permissible Lake Macquarie LEP W1 (Natural Waterway). Underground Mining No Wyong LEP SP1 (Special Activities) Pit top and Sedimentation Dams No E1 (National Parks and Nature Reserves) Ventilation Shaft and Fans No E2 (Environmental Conservation) Sedimentation Dams Discharge Area Yes Notwithstanding these proposed zonings, the State Environmental Planning Policy (Mining, Petroleum and Extractive Industries) 2007 (the Mining SEPP) also has application to the site, as it does to all land in NSW. Clause 7 of the Mining SEPP sets out the types of mining activities that are permissible with consent despite any provision to the contrary in an LEP. Under Clause 7(1)(a) of the Mining SEPP, development for the purposes of underground mining may be carried out on any land with development consent. The entire development (including both the existing and proposed surface facilities) is proposed to be carried out for the purposes of underground mining. Consequently, all components of the proposed development would remain permissible with consent under the proposed LEPs. 3.4 Environmental Planning Instruments LakeCoal has undertaken a review of the relevant provisions of the various environmental planning instruments (EPIs) that apply to the proposed development (see Attachment 3 of the EIS), including: Lake Macquarie LEP and Wyong LEP; SEPP (State and Regional Development) 2011; SEPP No.33 Hazardous and Offensive Development; SEPP (Infrastructure) 2007; SEPP No.44 Koala Habitat Protection; SEPP 71 Coastal Projection; and SEPP (Mining, Petroleum and Extractive Industries) The Department has considered LakeCoal s review and undertaken its own assessment of these matters (see Section 5 and Appendix B). Based on this assessment, the Department considers that the proposed development can be undertaken in a manner that is generally consistent with the aims, objectives and provisions of these instruments, subject to the implementation of a range of mitigation, monitoring and management measures that have been incorporated in the recommended conditions of consent (see Appendix A). 11

14 3.5 Landowner s Consent The development application includes a small portion of land within the Lake Macquarie SCA which is reserved under the National Parks and Wildlife Act 1974 (NPW Act) to a depth of 40 m. The remainder of the land beneath the 40 m depth restriction is Crown land. The area of the development application that overlaps with the SCA is completely underground and relates to historic workings with current use restricted to passive activities such as ventilation, water management, and gas monitoring. No active development or works (ie coal extraction) are proposed within this area. Due to the depth of the historic workings (approximately 150 m in the Wallarah Seam and 190 m in the Great Northern Seam), the development application has effect only below the land reserved as the SCA. LakeCoal has clarified that its development application does not include the land within the SCA (ie the land to a depth of 40 m). Consequently, landowner s consent under Clause 49 of the Environmental Planning & Assessment Regulation 2000 is not required from the Minister for the Environment before the development application can be determined. 3.6 Integrated Approvals Under Section 89J(1) of the EP&A Act, a number of approvals are not required to be separately obtained for the proposal. These include: various approvals and permits under the Fisheries Management Act 1994, Coastal Protection Act 1979, National Parks and Wildlife Act 1974 and the Heritage Act 1997; a bush fire safety authority under the Rural Fires Act 1997; an authorisation under the Native Vegetation Act 2003 for the clearing of native vegetation; and certain water approvals under the Water Management Act Under Section 89K of the EP&A Act, a number of further approvals are required, but must be substantially consistent with any development consent granted for the proposal. These include: variations to the existing mining lease under the Mining Act 1992; variations to the existing environment protection licence under the Protection of the Environment Operations Act 1997; a permit under Section 144 of the Fisheries Management Act 1994; an approval under Section 15 of the Mine Subsidence Compensation Act 1961; and an approval for road intersection construction under Section 138 of the Roads Act Other Approvals LakeCoal currently holds an existing groundwater licence 20BL173107, under the Water Act 1912, which is valid until 11 March LakeCoal has advised that the development proposal has not been declared to be a controlled action under the Commonwealth Environment Protection and Biodiversity Conservation Act 1999, and therefore does not require approval from the Commonwealth Minister for the Environment. 4. CONSULTATION Under Section 89F of the EP&A Act, the Director-General is required to publicly exhibit the development application and accompanying Environmental Impact Statement (EIS) for the Chain Valley Extension Project for at least 30 days. The Department: publicly exhibited the EIS from 7 June 2013 to 8 July 2013; advertised the exhibition of the EIS in the Newcastle Herald and the Lakes Mail newspapers; notified relevant State government authorities and Councils; notified relevant road authorities, in accordance with the Mining SEPP; and notified relevant nearby infrastructure asset owners and road authorities, in accordance with the Infrastructure SEPP. In undertaking these processes, the Department has satisfied the notification requirements of Section 89F of the EP&A Act, the Mining SEPP, and the Infrastructure SEPP. 12

15 The Department received a total of 28 submissions during the exhibition period: 13 from public authorities, including Wyong, Lake Macquarie and Newcastle Councils; 1 from a special interest group; and 14 submissions from local residents. None of the government authorities objected to the proposal, but raised concerns about the potential transport and environmental impacts, and recommended a number of conditions to be imposed should the proposal be approved. The key concerns raised in agency submissions related to: traffic and transport impacts, including the effect of continued coal truck movements on the local and State road networks and ongoing maintenance of public roads over the extended project life; potential subsidence impacts on the lakebed and foreshore of Lake Macquarie (including abiotic functions, seagrass beds, lakebed ecology and wave processes); terrestrial biodiversity impacts associated with the proposed clearing of vegetation and the adequacy of the proposed mitigation measures; concerns regarding the predicted increase in dust and particulate emissions (PM 10 ) and the need for best practice air quality impact control and management; assessment and management of groundwater resources; management of mine water discharges; issues regarding consultation with registered Aboriginal stakeholders and potential impacts on Aboriginal cultural heritage; and site rehabilitation and final land use planning. All 14 public submissions supported the project citing reasons of continued employment and supply of local coal for electricity generation. The special interest group, the Construction Forestry Mining and Energy Union (CFMEU), supported the proposal. A full copy of these submissions is provided in Appendix C. LakeCoal provided a detailed response to the issues raised in submissions (see Appendix D), which has been considered in the Department s assessment of the development in Section 5 below. 5. ASSESSMENT In assessing the merits of the proposed development, the Department is required to consider the: provisions of all relevant EPIs; issues raised in submissions; likely impacts of the development; suitability of the site; public interest; objects of the EP&A Act, including Ecologically Sustainable Development (ESD). To address these matters, the Department has considered a range of documentation, including the: EIS for the proposed development; existing conditions of approval for Chain Valley Colliery; submissions made on the proposed development, and LakeCoal s response to these submissions; additional information provided by LakeCoal during the assessment process; and relevant EPIs, policies and guidelines. The Department s assessment is summarised below. 13

16 5.1 Subsidence Effects and Impacts The EIS includes a detailed subsidence impact assessment (SIA) undertaken by Ditton Geological Services. The SIA predicted subsidence effects, subsidence impacts and environmental consequences for the proposed extension; compared these effects, impacts and consequences with those already approved for the original project; and also compared them with subsidence data from the nearby Mannering Colliery to validate the performance of the subsidence prediction methodology. Mine Plan The Chain Valley Colliery Extension project would include (see Figure 3): re-orientation of miniwall panels 4 9, which were approved under the existing approval, within the Fassifern Seam, beneath the lakebed of Lake Macquarie; and development of an additional 36 miniwall panels within the Fassifern Seam beneath the lakebed of Lake Macquarie, including beneath Chain Valley Bay. The proposed panel dimensions, depths of cover and vertical distances to the overlying mine workings are shown in Table 4. It should be noted that the proposed mining in Chain Valley Bay (ie miniwall panels 41 45), underlies historic workings in both the Great Northern and Wallarah Seams. Table 4: Miniwall Extraction Panel Dimensions Panel Panel width (m) Depth of cover (m) Distance to Great Northern Seam (m) Distance to Wallarah Seam (m) MW MW Subsidence Effects The SIA states that subsidence effects (ie the deformation of the ground mass due to mining) would vary across the mining area. Various factors act to control overall subsidence and the resulting impacts, including the cover depths, interburden thickness between the proposed workings and previous workings, and specific geological conditions. Conventional subsidence predictions for the extension project, compared with those made for the original project, are shown in Table 5, while Figure 6 shows the worst-case predicted maximum vertical subsidence. Table 5 shows that the average maximum predicted subsidence parameters for miniwalls 1 40 are generally consistent with those under the existing approved project. Figure 6 shows clearly that vertical subsidence is quite limited over the majority of the mining area. Slightly higher levels are predicted in the northeastern part of the mining area, over miniwalls 22 29, where the depth of cover is lower. By far the greatest subsidence is predicted above miniwalls 41 45, proposed to be located in Chain Valley Bay, where subsidence would be significantly exacerbated by overlying workings in the Great Northern and Wallarah Seams (see Figures 3 and 6). Table 5: Predicted Maximum Subsidence Parameters Subsidence Approved Project Parameter Subsidence Single Seam Extraction of up to 9 Miniwalls Maximum Subsidence (millimetres (mm)) Average Subsidence (mm) Maximum Tilts (mm/m) Average Tilt (mm/m) Maximum Tensile Strain (mm/m) Average Tensile Strain (mm/m) Maximum Compressive Strain (mm/m) Average Compressive Strain (mm/m) Proposed Project Subsidence Single Seam Extraction (ie MW 1 40) Proposed Project Subsidence beneath Existing Workings (ie MW 41 45)

17 Figure 6: Predicted Worst-Case Vertical Subsidence Contours Note: This figure does not include correct miniwall panel numbers or include the proposed Seagrass Protection Barrier (SPB). The proposed mine plan in Figure 3 is accurate, excluding areas within the SPB and miniwall panel numbers which accurately reflect proposed mine sequencing. 15

18 The worst-case maximum vertical subsidence prediction of 620 mm in the single seam mining areas and 886 mm beneath existing workings are increases of 202 to 468 mm over predicted subsidence for the approved project. This increased vertical subsidence is considered to be low for miniwalls 1 40 and moderate for miniwalls Underground coal mines using longwall layouts generally produce vertical subsidence of between 1.3 and 4.5 m (ie 1300 to 4500 mm). Due to paramount considerations for the safety of mine workers, DRE ensures that all coal mines beneath coastal lakes operate with a high factor of safety (FoS) to prevent potential connective cracking between the mine workings and the overlying lake, in order to avoid water in-rush. This also acts to avoid the potential environmental consequences of connective cracking on the lakebed itself. Based on the proposed in-seam mining height and applicable guidelines, the SIA has sought to apply a minimum 40 m thick constrained zone (solid rock strata unit, above the continuous fracturing and caved zones) above the proposed miniwalls. LakeCoal is required to undertake bathymetric surveys of the bed of Lake Macquarie. The May 2013 survey indicated that a maximum of 200 mm vertical subsidence has occurred over miniwalls 2 and 3, compared to a predicted maximum of 418 mm. This supports the SIA s position that it has applied a conservative approach to model predicted maximum subsidence. The predicted increases in vertical subsidence are considered to be conservative. Maximum strains are predicted to increase from 4 mm/m to 6 mm/m and maximum tilts from 6 mm/m to 17 mm/m. Average strains are predicted to be 3 mm/m and average tilts 8 mm/m, which are comparable to the existing predicted levels. The only area where these averages are predicted to be exceeded is the northeastern mining area, where the depth of cover is shallower. The SIA calculated that the predicted maximum tensile strains of 2 6 mm/m would result in maximum crack widths between mm at the bedrock surface beneath the lake sediments (the rockhead ). It is likely that any cracks in the rockhead would be filled naturally by the overlying, thick, unconsolidated lakebed sediments (6.1 m to 31 m in thickness above the rockhead) with no impact on the lakebed itself. The SIA also stated that strains on the lakebed would be more uniformly distributed due to its generally flat and gently sloping nature and are therefore more likely to be absorbed by the plastic nature of its sediments. Previous experience at nearby mines also indicates that surface cracking is likely to be minor or absent. Accordingly, the SIA considers that no monitoring or remediation for the potential minor cracking would be required. The Department considers that the predicted subsidence values are generally low and that the resulting impacts on the lakebed itself are also very likely to be low. They do not represent an increase to the practical risk of cracking of the rock strata between the mine workings and the lakebed, or to instabilities in the lakebed s sediments, (ie erosion resulting from increased tilts). DRE also raised no concerns regarding the level of subsidence impacts on the lakebed. The Department considers that the predicted subsidence effects are conservative, and that they would have minor impacts on the lakebed itself, which would naturally in fill over time. Subsidence Control Zones Mining operations in the vicinity of Lake Macquarie s shoreline have been closely controlled by DRE over the past 30 years to strictly limit vertical subsidence within the High Water Mark Subsidence Barrier (HWMSB) to a maximum of 20 mm (see Figure 7). These guidelines are a regulatory response to past mining-induced damage to the foreshore and to adjacent waterfront homes, particularly at Chain Valley Bay in 1986 and shortly thereafter. It should be noted that this foreshore damage resulted from mining at the since-closed Newvale Colliery, not by mining at Chain Valley. In accordance with these requirements, LakeCoal would continue to protect the foreshore and adjacent seagrass beds from subsidence (as it does under its existing project approval) by ensuring that the miniwalls are set out at a suitable lateral distance from these features. The angle at which this distance is set from the natural feature down to the sides or ends of an extracted miniwall panel is known as the angle of draw (AoD) (see Figure 7). DRE has established that the AoD to protect the lake foreshore is a minimum of 35 o from the high water mark (RL 2.44m AHD). To further protect seagrass beds, LakeCoal also applies an AoD of 26.5 o from the lakeward extent of the seagrass bed down to the edges of a proposed miniwall panel (see Figure 7). No secondary extraction would generally occur in these two subsidence control zones, therefore surface subsidence would be limited to 20 mm beneath the seagrass beds and foreshore. 16

19 Figure 7: Schematic of High Water Mark Subsidence Barrier and the Seagrass Protection Barrier (SPB) 17

20 Proposed Multi-Seam Mining in Miniwalls Proposed miniwalls are located below previous mine workings in both the Great Northern and Wallarah Seams (located 30 and 70 m above the target Fassifern Seam respectively) with overall rock cover depth in this area above the Fassifern Seam ranging from 200 to 230 m (refer Figures 7 and 8). Undertaking secondary extraction beneath previous workings has potential to re-activate the existing workings causing them to subside further. Of particular concern is the potential for unexpected or unplanned subsidence impacts due to pillar collapse. The SIA included an assessment of potential multi-seam mining effects, with predicted maximum effects as shown in Table 5 above. Figure 8: Geological Cross Section of Chain Valley Bay, showing Depth of Cover to Coal Seams and Presence of Claystone Floor Conditions The SIA states, in respect of stability of the pillars in the existing workings in the Great Northern and Wallarah Seams under multi-seam loading conditions, that the squat nature and strain hardening properties of the pillars in each seam will allow the assumption of pseudo-elastic behaviour to be applied confidently. Accordingly, the SIA predicted that the remaining pillars in the existing workings would not fail, but rather compress further under load. The SIA states that the factor of safety (FoS) for the existing pillars would range from 1.64 to 5.01 in the Wallarah Seam and from 1.39 to 4.51 in the Great Northern Seam (where a FoS of 2.11 represents the possibility of failure of 1 in 10 6 ). Fracturing heights are predicted to reach up to 89 m above the Fassifern Seam, and therefore would interact with the Great Northern Seam workings, given an interburden thickness of only m. The SIA acknowledges that a moderate stress interaction may occur between the new fractures and existing pillars. The SIA estimates that the potential for resulting pillar instability is approximately 36%, with worst-case additional subsidence of <300 mm for mine workings with pillar heights of 2.5 m. The SIA considers that this does not represent a significant risk to the lakebed. However, DRE raised strong concerns regarding miniwalls and the potential for resulting subsidence beyond the conventional AoD to affect the low-lying parts of Lake Macquarie s foreshore. DRE stated that the SIA was deficient in respect of: 18

21 Chain Valley Extension Project Figure 9: Existing and Proposed Workings, with workings in the Great Northern Seam (blue) and the Wallarah Seam (yellow). 19

22 an assessment of potential multi-seam effects due to the proposed mining is included; however the influence of soft roof/floor conditions has not been adequately considered; and inadequate consideration of the potential for delay and/or on-going subsidence, and subsidence outside the angle of draw, despite the availability of monitoring data demonstrating this behaviour. Consequently, LakeCoal engaged Ditton to undertake an additional study taking these matters into consideration (the revised SIA). The revised SIA stated that the soft claystone floor conditions that caused previous unplanned subsidence impacts in Chain Valley Bay are located beneath the Great Northern Seam (see Figure 8). Both DRE and the Department note that additional soft claystones exist in a number of horizons in the local stratigraphic sequence, in addition to the principal soft claystone forming the floor of the Great Northern Seam (ie the Awaba Tuff). DRE indicates that the Wallarah Seam workings also have a reasonably soft claystone floor. The revised SIA stated that extraction of miniwalls would cause additional abutment load and pillar stress on remnant pillars in the Great Northern Seam for a lateral distance up to 100 m from the extracted miniwall panels. This additional pillar loading (calculated as 7 megapascals, MPa) is not predicted to exceed the strength of the claystone floor (calculated as 13 MPa). Given that the proposed miniwalls are set back a minimum distance of 197 m from the foreshore, the revised SIA reiterated the SIA s earlier position that it was very unlikely that extraction of miniwalls would cause unplanned subsidence of the Chain Valley Bay foreshore. The revised SIA also reviewed the available subsidence data associated with previous unplanned subsidence events along the foreshore, and found there was no plausible correlation to secondary extraction activities undertaken in the Fassifern Seam at that time, which were over 350 m away. Ditton argued that localised softening of the claystone floor beneath the foreshore itself was the cause of this unplanned subsidence, which has slowly increased on a continuous basis since mining in the Great Northern Seam took place between 1997 and The revised SIA considered that potential for further movement beyond its lateral 100 m prediction would only be possible if a large-scale claystone floor failure developed in the Great Northern workings as a result of fracture interactions. This would cause a pillar floor punching failure run in the Great Northern workings, from above the proposed Fassifern workings to the foreshore, most likely in Areas 1, 2 and 3 (shown as red oval circles in Figure 9). It also predicted that any such potential pillar run would be likely to be slow moving, if it occurs, as it will take time for the moisture-sensitive claystone to compress under the applied abutment loading. The revised SIA determined through empirical data and established formulae that a 3 m thick softened claystone unit would have a load-bearing capacity of 13.3 MPa. On this basis, Ditton calculated that the estimated FoS against a floor failure pillar run is 1.9. Given this relatively high FoS, Ditton concluded that it is unlikely that this scenario would develop, provided that the revised SIA s assumptions of claystone strength and stiffness are correct. Ditton recommended that the moisturesensitive claystone thickness and its properties are further investigated to improve the revised SIA s assessment of load-bearing capacity and resulting subsidence predictions. Both the Department and DRE have carefully reviewed the revised SIA. Both agencies agree that a form of secondary extraction could potentially be developed within Chain Valley Bay. Options include the currently proposed miniwall panel layout, shortened miniwall panels, fewer miniwall panels, reduction in panel widths, increased chain pillar widths, and no miniwalls but pillar extraction under a variety of configurations. Such refinements would reduce the level of subsidence. It remains critical to better understand the extent and physical properties of the moisture-sensitive claystone floors beneath the Great Northern and Wallarah Seams before any secondary extraction in the Fassifern Seam. This would ensure that the revised SIA s assumptions and calculations are confirmed prior to any secondary extraction. Both agencies agree that the current level of data regarding pillar and floor interactions under multi-seam loading conditions is insufficient to conclude confidently that the existing workings beneath the foreshore would remain long-term stable. As for all underground mines in NSW, Chain Valley is required to produce an Extraction Plan to the satisfaction of the Director-General to control subsidence and to manage related impacts. An Extraction Plan must be completed prior to commencing any secondary extraction. These plans 20

23 provide details of the measures proposed to protect the foreshore and seagrasses, undertake subsidence monitoring, specific built features, seagrass and benthic species management plans, consultation with relevant stakeholders, and specific trigger action response plans. Given LakeCoal s proposed timing for extraction of miniwalls 41 45, which would occur in about Year 10 of the project, there is more than sufficient time for LakeCoal to undertake further investigations of the moisture-sensitive claystone floor conditions and to consider any appropriate further refinement of the current miniwall panel design in this area. Consequently, DRE has recommended that, prior to any approval of an Extraction Plan for miniwalls 41 45, LakeCoal should be required to submit a detailed feasibility investigation to identify the extent of soft claystone floor conditions and confirm pillar stability in the overlying workings. This would ensure that the Extraction Plan is informed by the findings of this investigation and enable it to confirm or revise the subsidence predictions and panel design. The Department agrees with DRE and has recommended that this investigation is completed prior to the submission of any Extraction Plan for secondary extraction in Chain Valley Bay. Proposed conditions would require that the investigation must be undertaken in consultation with DRE, and: assess the stability of remnant coal pillars and the extent of the soft claystone floor conditions in the Great Northern and Wallarah Seams above and adjacent to proposed miniwalls 41 45; includes revised multi-seam subsidence predictions for the second workings areas; gives particular consideration to the risks of irregular subsidence and for pillar run leading to subsidence outside of the predicted AoD; and recommends final design of the second workings panels and any necessary adaptive management measures. Conclusion To ensure that unforeseen impacts do not result in significant environmental consequences, the Department has recommended conditions of approval that include: strict subsidence performance measures which act to protect all natural and built features in the underground mining area and allow the identification and repair/remediation of any subsidence impacts; requirements to produce an Extraction Plan to control subsidence and to manage related impacts, to be completed prior to commencing any secondary extraction; and the provision of offsets if unforeseen impacts occur which cannot be successfully remediated. Because miniwalls would be extracted beneath previous workings in the Great Northern and Wallarah Seams, there is some residual risk of reactivation of subsidence in the overlying workings causing pillar failure, and potential pillar run or long-term subsidence outside of the predicted AoD. The Department proposes that this risk is managed through requiring, prior to the lodgement of the relevant Extraction Plan, by a detailed investigation of the overlying workings. 5.2 Environmental Consequences of Subsidence Benthic Invertebrates Benthic invertebrates are macro invertebrate species (primarily worms and bivalve molluscs) that live on and within the lakebed sediments and provide important ecological functions within the Lake s ecosystem. The EIS states that, for many fish species, the benthic communities found in the study area are a significant food source. The Department notes that the entire floor of Lake Macquarie is defined as Key Fish Habitat by the Department of Primary Industries Fisheries. Consequently, a reduction in species composition and abundance of benthic invertebrate species in the extension area may impact on the food chain and fish stocks in the lake. The EIS stated that subsidence may affect benthic organisms by increasing the depth of the lakebed and, consequently, decreasing the light penetration of the water column and affecting light dependent biota (ie algae) on which benthic organisms feed. As required by its existing approval, LakeCoal has developed and implemented a Benthic Communities Management Plan (BCMP), which includes: surveys of the lakebed depth; 21

24 a program of ongoing seasonal monitoring of benthic species in both control and impact sites to establish baseline data on species number and community composition; and development of a model to predict likely impact of increased water depth and subsidence impacts, including but not limited to light reduction and sediment disturbance, on benthic species number and benthic communities composition, incorporating the survey data collected. The existing approval also contains performance measures that require that subsidence impacts do not exceed minor environmental consequences for benthic communities. Monitoring data so far indicates that there has been no exceedance of the minor environmental consequences performance measure for benthic communities. If impacts to benthic community abundance or distribution should occur above a minor level, then this impact must be either remediated or offset. The specialist marine ecology assessment (MEA) includes a review of the previous benthic studies undertaken for the existing project as well as more recent benthic surveys undertaken as part of the BCMP. The surveys have been conducted across many sites within the proposed extension area, with water depth ranging from m. The MEA included a comprehensive statistical analysis on the survey results and determined that the number of individual species or species composition is not linked to the water depth within the areas surveyed. As the results from the surveys and monitoring do not strongly link community assemblage to depth profiles, the MEA considers it unlikely that the predicted depth increases from subsidence (ie 0.62 m to 0.89 m) would result in significant changes to the existing benthic communities. Further, maximum subsidence would occur towards the end of the mine s life which would allow refinement of the panel design if changes to benthic communities were identified in future monitoring. The Department has recommended conditions of approval to update the BCMP and component predictive model to include the new mining areas and refine the predictive model to include the more recent survey data. The Department is satisfied that the predicted impacts to benthic communities is very low and that the recommended condition to continue to implement a BCMP provides an effective mechanism to identify any adverse trends in the data and, if needed, implement corrective action. Seagrasses Nearly all mapped seagrasses lie within the proposed Seagrass Protection Barrier (SPB), defined by an AoD of 26.5 o from the lakeward extent of the seagrass bed down to the edges of a proposed miniwall panel (see Figures 2 and 7). No secondary extraction would generally occur in these two subsidence control zones, therefore surface subsidence would be limited to 20 mm beneath all seagrass beds, with one minor exception. The exception relates to a very small seagrass bed (50 m 2 ) within Chain Valley Bay northeast of miniwall 43 45, which is predicted to be subsided by up to 26 mm. LakeCoal has monitored the seagrass beds in this area since 2008 and has identified that the extent and composition of the beds varies naturally over time. The extent of seagrass beds has changed, reflecting water depth variations of mm, without any influence from mining. The proposed slight exceedance of the 26.5⁰ AoD is considered unlikely to result in greater than negligible impacts to seagrass at this location. Wave Action and Saltmarsh Erosion The EIS identified that changes to the depth of the lake have the potential to cause minimal changes to wave behaviour on the foreshore. The waters of the lake are almost enclosed from the sea and waves are primarily generated by surface winds rather than sea swell. This means that the fetch of the wind determines wave energy. As part of its RTS, LakeCoal engaged the University of NSW Water Research Laboratory (WRL) to undertake an assessment of the potential impact of subsidence on tidal action and wave behaviour on foreshore salt marshes. The WRL report confirmed that wind is the primary mechanism for wave formation on the lake and determined that predicted subsidence in Chain Valley Bay would not affect the wave climate sufficiently to have adverse shoreline impacts or alter the tidal prism within the lake. OEH reviewed the report and considered that it satisfactorily addressed its concerns regarding wave erosion and shoreline impacts. 22

25 Groundwater The EIS contains a comprehensive assessment of the potential impacts of the proposed development on groundwater resources, including an independent peer review of the groundwater model. LakeCoal s specialist subsidence and groundwater assessments state that there are unlikely to be any adverse effects on terrestrial alluvial aquifers, since terrestrial streams and their aquifers are located a sufficient lateral distance from the proposed workings. However, deep bedrock aquifers associated with the coal measures would be impacted, which would result in further pressure losses within the coal seam aquifers. This would lead to maximum drawdown in the coal aquifers of up to 10 m up to 700 m northwest of the proposed mine footprint. Predicted drawdown reduces to 1 m within 1.5 km and to 0.1 m within 2 km. The specialist groundwater assessment states that this relatively steep drawdown cone reflects low inherent hydraulic conductivity in the coal seams. The Department understands that the Fassifern Seam has already been largely depressurised due to extensive nearby coal mining and that its aquifer is not usable for beneficial purposes. The groundwater assessment predicted that regional groundwater pressure would normalise soon after completion of mining, as groundwater levels within the deep bedrock aquifers would recover within a few months due to recharge from lake water, rainfall infiltration and seepage from overlying aquifers. Consequently, deep aquifers are not anticipated to be significantly impacted by the project. Despite no direct hydraulic connection and no potential loss of groundwater from surface alluvial aquifers into the proposed underground workings, the proposed extension would have an indirect impact on alluvial aquifers through regional groundwater depressurisation caused by dewatering of the coal measures. The groundwater assessment determined that negligible adverse impact is anticipated on any terrestrial based groundwater dependent ecosystems. One registered bore is anticipated be impacted by up to 1 m of drawdown. LakeCoal contacted the bore s owner (Gwandalan Public School), and determined that the bore is no longer in use. Another nine registered bores are situated within the alluvial terrestrial aquifers and are within the 0.1 to 1 m drawdown zone. Although it is not anticipated that private bore yields would be significantly impacted due to subsidence, in the event of such an event, LakeCoal has committed to provide an alternative water supply until the impacted bore recovers. The Department supports these mitigation measures and has recommended conditions to ensure nearby registered bores are appropriately monitored to enable timely detection of any impacts to bore water supply from the development. The Department and NOW have carefully reviewed the subsidence and groundwater assessments. NOW raised no concerns relating the groundwater assessment but recommended more stringent trigger response criteria regarding groundwater monitoring of nearby private bores. Built Features There are no significant overlying surface features in the extension area, given that the entire mining area is within Lake Macquarie, and the foreshore areas are protected by the HWMSB. However, there is an approved concept plan for a marina development within the extension area, known as the Trinity Point Drive Mixed use Marina, Residential and Tourist Accommodation (06_0309). Development of this project has not yet commenced. If substantial commencement has not occurred by 4 September 2014, then the concept approval will lapse. However, Johnson Property Group (JPG) has lodged a modification application to vary the concept approval to extend the lapse period for another year. The indicative layout approved under the concept plan suggests the proposed marina may traverse part of miniwall 11. The subsidence effects at this location would be: maximum vertical subsidence ranges from mm, maximum tilts ranging from 5 6 mm/m; compressive strains of 3 mm/m; and tensile strains from 3 4 mm/m. It is considered that these subsidence effects are likely to result in minor to negligible impacts on a marina structure. The Department has recommended conditions that would require a Built Features Management Plan as part of the Extraction Plan. This plan must address all items of public infrastructure and other built features, and be prepared in consultation with the owners of those features (including JPG). Regardless of whether the marina is built prior to or following extraction of miniwall 11, predicted or actual subsidence impacts should be able to be accommodated either through the detailed design of the marina (eg in respect of the height of pilings) or minor mitigatory 23

26 measures (eg straightening of tilted pilings). The Built Features Management Plan would have to contain recommendations regarding appropriate design or remedial measures and would include commitments to mitigate, repair, replace or compensate all impacts on affected built features. The Department has also recommended conditions of approval requiring performance measures for all built features to ensure that serviceability is maintained and that any damage is fully repaired or compensated. Subject to these conditions, the Department considers the development s impact on built features would be minimal. Conclusion The Department is satisfied that the SIA has used conservative assumptions, and the subsidence predictions provide a sound basis to assess the potential subsidence-induced environmental consequences of the development. The Department notes that predictions in the SIA are based on maximum worst-case scenarios, and empirical data from the current mining operations at Chain Valley and at the nearby Mannering Mine. Further, the Department is confident that the proposed HWMSB and SPB provide robust mechanisms to protect sensitive natural surface features. The Department has recommended conditions of consent which require LakeCoal to: ensure it complies with strict subsidence performance measures relative to the features it aims to protect; prepare a detailed Extraction Plan which contains the detail design of the underground mining area and stringent monitoring requirements, prior to undertaking any second workings; ensure a minor impact on benthic species and negligible impact on seagrass beds; and verify subsidence impacts and, if necessary, modify the layout of future panels in order to ensure continued compliance with the conditions of approval. The Department is satisfied that the recommended conditions of approval would provide an adequate and appropriate level of protection for the natural and built environment. Subject to these conditions, the Department is confident that the environmental consequences from mine subsidence would be minor and acceptable. The Department is confident that any adverse trends in subsidence data would be identified prior to worst-case subsidence predictions being realised. If needed, revised mining layouts to reduce subsidence impacts provide a realistic and effective mitigation technique. 5.3 Traffic The EIS s Traffic Impact Assessment (TIA) was undertaken by EMM in general accordance with the Guide to Traffic Generating Developments. The development would involve continued trucking on public roads until 2027, which is 11 years longer than under the existing approval. The TIA focused on the performance of the road network along the existing 90 km coal haulage route from Chain Valley to the Carrington Terminal at Port Waratah (see Figure 1). The haulage route comprises Construction Road, Ruttleys Road, Pacific Highway, Doyalson Motorway Link, Sparks Road Interchange, M1 Pacific Motorway (formerly Sydney to Newcastle Freeway), John Renshaw Drive, New England Highway, Maitland Road, Industrial Drive and Elizabeth Street. Ruttleys Road (Wyong LGA) and Elizabeth Street (Newcastle LGA) are the only Council-owned roads along the route. Traffic Generation The development would maintain the currently approved maximum trucking rate on public roads of 270 laden trucks per day as well as the current haulage hours of 5:30 am to 5:30 pm weekdays. LakeCoal has not sought to increase the trucking limit on public roads, as the additional coal to be extracted would be sent to Vales Point by private haul road (see Table 6 below). Table 6: Product Coal Distribution Destination Currently approved supply Proposed supply % Split (1.2 Mtpa) Approximate tonnes % Split (1.5 Mtpa) Approximate tonnes Port Waratah (export) 55% 660,000 44% 660,000 Vales Point (domestic) 30% 360,000 44% 660,000 Other domestic 15% 180,000 12% 180,000 24

27 Lake Coal currently transports up to 180,000 tpa at daily rates of up to 100 truckloads, to other domestic customers such as Weathertex and Mountain Industries at Kooragang. This other domestic coal transport occurs on days when the export coal transport to Port Waratah is not occurring, so the two transport operations do not coincide. Accordingly, as this impact would be less than the primary export trucking impact, no separate assessment of this transport route was undertaken in the TIA. In addition to the coal trucks, the development would also continue to generate traffic associated with employees and deliveries to the mine, with a typical maximum of 143 persons travelling either to or from the site over three operating shifts on weekdays. This impact is considered minor and is unlikely to have an impact on the capacity and performance of the road network. Existing Management and Road Safety The interaction of coal trucks with other road users and resulting safety concerns has been an important issue for the local community and relevant road authorities for many years. Submissions from the Roads and Maritime Services (RMS) and both Wyong and Newcastle Councils raised road safety concerns related to ongoing road haulage of coal. RMS also emphasised the NSW Government s policy to move coal haulage off the public road network, where reasonable and feasible to do so. The existing project approval requires LakeCoal to implement a Road Transport Protocol, with components including a Traffic Management Plan and heavy vehicle drivers Code of Conduct to encourage good driving behaviour, to manage and monitor the impacts of coal haulage on the public road network. The approval also requires LakeCoal to commission 6-monthly independent coal haulage traffic audits that must be prepared in consultation with Wyong City Council and the RMS. Three road safety audits have been undertaken to date and all reported that the route is in good condition with some minor repair works required such as line marking and vegetation clearing. The audits reported that driver behaviour by LakeCoal s contracted truck drivers has been generally good. The independent audit reports have been an important tool to address and improve the performance of Chain Valley s trucks on public roads and to address community concerns. As a result of audit recommendations, site departure procedures have been modified to ensure that company signage is visible on the rear of trucks and that all loads are securely covered. This has reduced coal falling onto public roads. The existing approval also requires LakeCoal to upgrade the intersection of Construction Road and Ruttleys Road. The Department understands that the plans for these works have been submitted to Wyong Council for approval. The Department has reviewed the mine s 2012 Annual Review, and noted that 15 complaints were received in relation to driver behaviour for the reporting year. The Department understands that LakeCoal responds to each community complaint comprehensively and that the number of complaints received so far this year is 7, which is a reduction for the same period last year. Each complaint has been thoroughly investigated, with the truck driver being interviewed by mine management to determine fault, and how best to effectively manage and avoid a repeat of the cause of the complaint. This robust feedback mechanism has been effective in encouraging compliance with the Code of Conduct by truck drivers. The Department has recommended that LakeCoal is required to review and update the Road Transport Protocol to ensure that the findings from the safety audits and Annual Review are incorporated and addressed. The requirement for independent road audits (albeit on a 12-monthly cycle) has also been continued in the recommended conditions, along with a condition that requires LakeCoal to implement any audit recommendations within 6 months of the audit being undertaken, to the satisfaction of the road authority and the Director-General. With the implementation of these conditions, the Department believes that the risks to other road users would be low and acceptable. Capacity of the Road Network The TIA calculated that the development would make a minor to moderate contribution to the overall volume of heavy vehicles on the majority of public roads along the haulage route. However, the majority of roads along the route are arterial State roads, which have spare capacity to accommodate Chain Valley s haulage traffic. 25

28 The Department notes that RMS raised no concerns regarding the capacity of the State roads and that the TIA calculated impact at the maximum proposed trucking rate, which has never eventuated under the existing approval. Additionally, while the TIA calculated Chain Valley trucks as additional to existing heavy vehicle traffic, in reality it is a continued impact. The Department considers that, given the spare capacity of these State arterial roads, Chain Valley s impact on the capacity and usability of these roads would be minimal. However, the TIA states that the development may have an impact on overall traffic flow characteristics on the section of Ruttleys Road (a local road) between Construction Road and the Pacific Highway near Doyalson. The TIA contained traffic survey data from 2012 for Ruttleys Road, which identified that the Annual Average Daily Traffic (AADT) volume for all vehicles is 8,507, with 7.7% of these being heavy vehicles (ie 653 heavy vehicle movements per day). This survey included current Chain Valley haulage trucks (160 movements). Accordingly the average daily number of nonproject heavy vehicle movements measured on this section of Ruttleys Road is 473. The maximum proposed haulage rate would significantly increase the average number of heavy vehicle movements on Ruttleys Road, from 473 per day to 1013 (ie 540 colliery related truck movements, or 110%). However, the overall impact of the development to the total number of vehicles using the road is minor (ie a 6.5% increase). The Department considers that the proposed development is the continuation of an already approved, but rarely realised, maximum trucking rate. The 2012 AADT survey indicated that Chain Valley was at that time hauling coal at around 30% of its approved maximum rate. Chain Valley has also been using this section of road for coal haulage purposes for over 50 years. Consequently, the Department considers it likely that most road users would be familiar with coal haulage in this area and that, on the rare occasions when trucking is at its maximum, road users experience of overall traffic flows and safety would not be significantly impacted. To ensure that Ruttleys Road is appropriately maintained and so minimise the impact of coal haulage on other road users, LakeCoal is currently required to pay a proportional road maintenance levy. The Department is also aware that Ruttleys Road is proposed to be upgraded, with $2 million in works now allocated by the Government for road shoulder widening, resurfacing, installation of wire safety barriers, line markings and guide posts. These works would likely greatly improve the experience of road users along Ruttleys Road, further minimising the impact of coal haulage. To manage the impact of heavy vehicles on Ruttleys Road, LakeCoal s existing approval requires it to: limit haulage to 5:30 am to 5:30 pm weekdays; implement a Road Transport Protocol, which contains a Traffic Management Plan, a heavy vehicle drivers Code of Conduct, measures to enforce the code, and procedures for handling and responding to community complaints; commission 6-monthly independent traffic audits; and implement findings of these audits within 6 months. The Department agrees with the findings in the TIA, and considers that the existing management regime, current funding arrangement with Council and the proposed upgrade works would adequately minimise any impacts on the capacity of the road network posed by the development. Performance of the Road Network The TIA analysed the impact of the proposed continued trucking rate for both current (2012) and future conditions (2027) during peak-hour periods, at the maximum proposed hourly trucking rate of 32 laden trucks per hour. However the observed average trucking rate under the existing approval is 15 laden trucks per hour. Consequently the TIA can be considered conservative. The TIA considered the performance of four key intersections along the haulage route. These intersections were chosen due to the proportion of coal haulage vehicles using theses intersections and the experience of the truck drivers who use the route. The four intersections were: Ruttleys Road / Construction Road; Pacific Highway / Ruttleys Road; M1 Motorway / Sparks Road Interchange East Side un-signalised; and 26

29 Industrial Drive / Elizabeth Street. The TIA s modelling determined that the Industrial Drive / Elizabeth Street and Ruttleys Road / Construction Road intersections would not experience a reduction in level of service (LoS) due to the development. However, the other two intersections would experience a reduced LoS, which is discussed further below. Ruttleys Road & Construction Road This is a T-intersection controlled by a stop sign on Construction Road which provides access to the public road network for Chain Valley and Vales Point. This intersection currently operates at a good level of service (LoS B) for both the morning and afternoon peak hours. However, the TIA predicted that the performance of this intersection would worsen by the year 2027 (without project-related traffic) to LoS C for the morning peak hour and LoS D for the afternoon peak hour, due to a natural increase in traffic associated with the growth of nearby residential and industrial areas. With the addition of project-related traffic, the LoS would remain at C in the morning peak hour however would worsen to LoS E for the afternoon peak hour. For the 2027 afternoon peak hour, delay per vehicle is 51.2 seconds without project-related traffic. This would increase to 53.6 seconds at the average proposed haulage rate (15 vehicles) and to 57.8 seconds at the maximum proposed haulage rate (32 laden trucks per hour). Consequently, on a typical weekday in 2027, the development would increase afternoon peak hour delay per vehicle by 2.4 seconds, while on the few days of that year likely to be subject to the maximum haulage rate, this delay could extend to 6.4 seconds. Accordingly, the delays would be minor. Further, since the traffic turning into Ruttleys Road from Construction Road is predominantly related to either the mine or Vales Point, the Department considers the impact of the development on this intersection to be acceptable. M1 Motorway and Sparks Road Interchange (East Side - unsignalised with stop sign) This intersection is currently performing at LoS F, with a delay per vehicle of to seconds for the morning and afternoon peak hour periods, respectively. The delay is predicted to significantly increase without project-related traffic to 1,813 seconds per vehicle (spv) for the morning peak and spv for the afternoon peak in the year With the addition of project-related traffic the delay increases further to 4,252 spv for the morning peak and 1,891 spv for the afternoon peak under the maximum haulage scenario (ie 32 laden trucks). The TIA states that, as this intersection is currently above capacity and is performing below the RMS s minimum standards, it requires an upgrade by the relevant road authority. The Department wrote to RMS to request information regarding proposed future upgrades to this intersection. RMS stated that no upgrade to this intersection is planned in the short term, however in the medium to long term a signalised upgrade similar to the arrangement on the eastern side of the intersection is proposed. LakeCoal s RTS responded to concerns raised by the Department regarding the proposal s impact on this congested intersection. LakeCoal reported that, while the TIA s model calculates that the intersection has LoS F, LakeCoal s truck drivers do not generally experience such significant delays at this intersection. The Department considers that the continued traffic generated by the proposed development can be accommodated while maintaining the performance of the majority of the road network to an acceptable level. Nonetheless, the Department considers that the amount of project-related traffic should be minimised during peak hour periods to reduce the delay experienced by road users, until appropriate RMS upgrades are completed and has recommended conditions accordingly. The Department considers that, subject to the continued implementation of the Road Transport Protocol and the recommended conditions of approval, that the development s traffic impacts would be minimised and ensure an acceptable level of impact to the road network. Alternatives to Road Transport LakeCoal s current approval requires it to submit a study to the Department by the end of December 2012 which assesses reasonable and feasible options to reduce or eliminate coal haulage on public roads, and to update this study every two years. This requirement reflects clause 16 of the Mining SEPP and recognises the Government s policy to move coal haulage from public roads onto alternatives such as rail, wherever possible. 27

30 From this study and from further analysis in the EIS, LakeCoal has identified the two most feasible options as: Option 1: construction of a haul road to Vales Point s rail loop coal unloading facility; or Option 2: construction of a part conveyor, part haul road system to Vales Point s rail loop coal unloading facility. Both Options 1 and 2 would generally follow the same alignment from Chain Valley to Vales Point rail loop. Both options would use existing rail infrastructure at the Vales Point rail loop and require installation of relevant infrastructure to enable coal to be loaded onto trains for transport to Port Waratah. Other rail loops in the area were considered, however the proximity of Vales Point made it the most feasible. LakeCoal engaged Arkhill Engineers to undertake a prefeasibility report and budget estimate of the potential capital costs of both options (see Table 7). The EIS included a preliminary economic assessment using two methods, the net present value (NPV) and cost benefit analysis to calculate if the allocation of capital to construct and operate either option would be economically viable. Both methods considered the capital costs, operational costs and savings, and used appropriate sensitivity and uncertainty analysis. Table 7: Estimated Capital Costs for Alternative Coal Transport and Rail Loading Infrastructure Options Option 1 Haul road and rail loading facilities Cost ($m) Option 2 Conveyor, haul road and rail loading facilities Cost ($m) Arkhill Engineers pre feasibility budget estimate ±20% 27.4 Arkhill Engineers pre feasibility budget estimate ±20% 40.4 Additional capital costs Additional capital costs Total 30.6 Total Note: Additional costs include tunnel required under Ruttleys Road, environmental impact assessment process, and relocation of existing buried and aerial services. This assessment determined that, over the life of the project, neither option would be economically viable, except Option 1 under a -20% sensitivity analysis scenario (ie capital costs discounted by 20%), which is considered very unlikely to occur. The Department accepts the conclusions of the economic assessment. While it acknowledges that coal haulage on public roads is not the preferred option from an amenity, safety and environmental perspective; it is satisfied in this case that there are no other currently feasible alternatives if the development is to proceed on a financially viable basis. However, the Department also acknowledges that the economic assessment is of a preliminary nature and also considers that further analysis is required to ascertain with greater certainty the quantification of capital and operating costs as well as environmental and social costs. In response to these concerns, LakeCoal has committed to provide the Department with a detailed feasibility report of rail transport options as part of its next biennial coal transport options report. The Department supports this commitment and has recommended a condition of approval requiring LakeCoal to undertake an economic assessment of the potential alternative rail options with one year of approval. The economic assessment would include a detailed analysis of infrastructure construction and operating costs and quantified social and environmental impacts associated with road and rail transport and require to be updated every 3 years. If a further expansion of the mine s rate of production is sought at a later date, then the economic assessment would provide strong guidance regarding future coal transport options. Road Maintenance The only two roads under Council control are Ruttleys Road (Wyong Council) and Elizabeth Street (Newcastle Council). As part of its existing approval, LakeCoal has negotiated a road contribution levy with Wyong Council. The Department supports this process and has recommended conditions of approval which reflect the current understanding between the two parties. Newcastle Council has not requested a road contribution levy. Given the level of impact to Elizabeth Street, the Department agrees that no levy is justified. 28

31 Conclusion The Department acknowledges that transporting coal on public roads inherently increases risks of traffic incidents and accidents. However, in the absence of feasible and viable alternatives to road haulage of coal, the Department believes that LakeCoal is doing everything that is reasonable and feasible to minimise the risk to road users and local residents. Overall, the Department considers that the continued traffic generated by the proposed development can be managed in a manner that would not significantly impact on the capacity, performance and safety of the road network or the amenity of local residents. Nonetheless, ongoing performance of the development regarding traffic must be carefully managed and monitored. The measures recommended by the Department to achieve this outcome are for LakeCoal to: restrict public road transport of coal to a maximum of 32 laden trucks/hour and 270/day; restrict public road transport of coal to an average of 16 laden trucks/hour during the peak hour periods; restrict export coal haulage to 5:30 am 5:30 pm weekdays; prohibit any coal haulage on weekends and public holidays; continue paying the agreed annual road maintenance contributions to Wyong Council to ensure adequate maintenance of Ruttleys Road; review and update the Road Transport Protocol for the mine; undertake 12-monthly independent traffic audits and implement recommendations resulting from these audits; and undertake an economic assessment of alternative transport options within one year of approval, to be updated every three years. Subject to these conditions the Department considers that traffic generated by the development would be appropriately managed and any remaining impacts would be minimal and acceptable. 5.4 Noise The EIS contains a detailed noise impact assessment (NIA), undertaken by EMM in accordance with the NSW Industrial Noise Policy (INP) and other relevant guidelines. In response to enquiries from the Department relating to noise modelling, EMM provided an updated NIA in late October. The Department s assessment of the development s noise impacts are based on the revised NIA. The operational noise emissions from the proposed operation differ to the existing operation in two main areas, namely the: increasing haulage hours to Vales Point along private roads, from 5:30 am to 5:30 pm weekdays to 24 hours a day 7 days a week; and operation of two new constructed ventilation fans at Summerland Point, which were constructed in 2012 under the existing project approval but have not been assessed when operating. Existing Noise Environment The acoustic environment surrounding Chain Valley is heavily influenced by industrial sources. The primary contribution is the Vales Point Power Station, which is situated 200 m northwest of Chain Valley s pit-top (see cover photo). Mannering Colliery is located approximately 1 km to the southwest (see Figure 10). These three facilities were opened in the 1960s to generate electricity for NSW, using low cost nearby coal as a fuel source. Accordingly, the noise environment surrounding Chain Valley has been dominated by industrial noise sources for over 50 years. Chain Valley s ventilation fan site is located near Summerland Point on the opposite side of Lake Macquarie from the pit-top facilities (see Figure 10). The nearest receiver to the ventilation fans is receiver R22, located 250 m to the northwest. Existing Noise Management Regime The existing approval requires LakeCoal to adhere to stringent noise criteria and implement a comprehensive best-practice noise management system. To meet its conditions, LakeCoal has: implemented an approved Noise Management Plan, which includes measures to undertake both real-time and attending noise monitoring to achieve compliance with the noise criteria; 29

32 Chain Valley Extension Project undertaken regular noise audits to determine compliance with conditions of approval and identify the main contributions to noise emissions, to better enable on-site attenuation options to be considered and implemented; and set long-term noise goals, recognising the historically high levels of industrial noise in the area for the nearby suburbs of Chain Valley Bay, Kingfisher Shores and Mannering Park, with the noise audits used as a mechanism to identify additional on-site mitigation measures. The existing noise management regime is considered to be effective, with no exceedances of the noise criteria detected and no complaints from the community received since project approval. Figure 10: Noise Receiver Locations. 30

33 Operational Noise The Department closely reviewed the NIA s predicted noise levels and considers them conservative, as all modelled scenarios assumed all plant and equipment were operating simultaneously and at full power which, in practice, is unlikely to occur. The NIA determined that noise-enhancing weather conditions are a feature of the site, and incorporated this into the noise modelling, including: prevailing winds: eight wind scenarios from 45 to 360 (±22.5 ) with a representative seasonal wind speed modelled for each direction; and temperature inversion: stability class F (winter night-period only). The NIA then compared the modelled noise emissions against the criteria in the existing project approval. For the majority of receivers during most weather conditions, the predicted noise emissions would be below the existing noise criteria. For receivers R6, R8, R11, R12 and R19, noise emissions are predicted to reduce by between 1 2 db(a). For receiver R19, emissions would reduce by up to 5 db(a) for the night shoulder period (5 am 7 am). However, some exceedances of the existing criteria are predicted to occur at receiver R22 (see Figure 10), when the new ventilation fans are operating at maximum capacity towards the end of the project life. Table 8 compares the noise levels experienced at R22 for the old fan, new fans under normal capacity, one new fan at maximum capacity and both new fans at maximum capacity. Table 8: Comparison of Predicted Noise Levels at R22 for the Old and New Ventilation Fans Predicted Noise Levels at R22 db(a) L eq15minute Criteria at R22 db(a) L eq15minute Calm Inversion (winter night period) Old fan - without colliery noise New fans - both fans at 88%, without colliery noise New fans - one fan at 100%, without colliery noise New fans - both fans at 100%, without colliery noise New fans - both fans at 100%, with colliery noise (5 tonal excluded) <40 <40-46 Enhancing o - <40 <40-46 Wind The Department understands that LakeCoal has applied noise amelioration measures to the new ventilation fans, in an effort to reduce its SPL, including: upgrading the motor housing to incorporate an acoustic enclosure kit; installing inlet silencers on the inlet side of the main impeller housing; installing outlet silencers for each of the vertical stacks from the outlet of both fans; and modifying the fan casing thickness from the standard 8 mm design to a thicker 12 mm option. The NIA determined that the worst case sound power level (SPL) for the two new fans is 105 db(a), which is 4 db(a) quieter than the single fan that was replaced. The NIA also determined that new fans do not have an associated tonal penalty due to their design, which is equivalent to a further 5 db(a) reduction on noise emissions experienced at the receiver. The NIA shows that when the two new fans are operating normally (ie at 88% duty), then noise levels at R22 are 17 db(a) lower than the decommissioned fan. When one fan is down for maintenance and the other fan is operating at 100% duty, noise levels are 7 db(a) lower than the decommissioned fan. Taking into consideration a 5 db(a) modifying factor for tonality, the reduction is 12 db(a) for one fan at 100% duty and 22 db(a) for two fans operating at 88% duty. The NIA states that these reductions demonstrate that the replacement of the decommissioned fan has resulted in a significant noise reduction at receiver R22 of between 57% to 80% in perceived loudness. The Department agrees and considers that the noise at R22 and the surrounding area has been significantly reduced and the local noise amenity greatly improved. 31

34 However, in years time towards the end of Chain Valley s life, the capacity of the two new ventilation fans is anticipated to increase to up to 100% duty, which is predicted to cause exceedances of 2-3 db(a) of the noise criteria for all periods of the day. This impact would be 3 db(a) lower than the old fan or 8 db(a) if tonality is considered. If noise from the pit top operations is included in the noise modelling, then exceedances at R22 in Years are predicted to be up to 5 db(a) under calm conditions and up to 6 db(a) during adverse weather conditions. Typically, for mining-related developments, the Department would recommend that owners of residences predicted to experience noise levels of 3 to 5 db(a) above the project specific noise levels (PSNLs) are entitled to receive noise treatment at their property (eg double glazing, air conditioning and/or acoustic insulation). Where noise emissions are >5 db(a) above the PSNLs, owners are generally able to request voluntary acquisition of their properties by the developer. However, in this case, the Department understands that the development consent for the residence at R22 was granted in 1994, while the old fan was still in usage. Consequently noise levels have reduced significantly following the installation of the new fans, by between 4 db(a) at maximum operation and 17 db(a) at standard operation or between 9 db(a) and 22 db(a) if tonality is included. The Department has not recommended that R22 is offered voluntary acquisition rights or noise mitigation at the residence, given the: mine is an existing operation that has been in operation long before the development of the residence at R22; mine has undertaken reasonable and feasible efforts to mitigate the noise at source ( ie the ventilation fans); significant improvement in the noise levels experienced at the property, compared to when the decommissioned fan was operating; 6 db(a) exceedance of the night-time intrusive criteria would only occur occasionally in winter months during the final 2 years of the project life, and sleep disturbance and maximum amenity criteria would not be exceeded at R22. The modelling for this assessment has used the actual measured SPL for the ventilation fans and has demonstrated that the project would not be able to achieve the PSNLs at R22 under normal or adverse weather conditions. If the noise limits in the approval were kept at the PSNL, the project would regularly be out of compliance, especially towards the later years of the project life. Consequently, the Department has set the project s noise limits for R22 at the levels predicted in the assessment (ie 46 db(a)), which LakeCoal believes it can achieve. However, the Department has also recommended conditions of approval that has set long-term noise goals for R22 which are equivalent to the PSNLs. The site s noise management plan includes an audit program which identifies the main sources of noise emissions and aims to reduce them in order to achieve the long-term noise goals. LakeCoal has committed to ameliorate noise at these sources where reasonable and feasible to do so. For receivers R6, R8, R11-12, R19, which are predicted to experience reduced noise emissions, the Department has recommended conditions which re-set the project s noise limits at the reduced levels. Sleep Disturbance and Cumulative Criteria The NIA also considered sleep disturbance noise impacts as well as cumulative noise impacts on local residents from Chain Valley, Vales Point and Mannering Colliery. The assessment indicates that the proposed development would comply with all relevant sleep disturbance and cumulative criteria at all times, and hence the Department is satisfied that all impacts are acceptable. The Department notes that while LakeCoal has sought to haul coal by truck to Vales Point on a 24/7 basis, it has stated that it would most likely only haul coal up to 10 pm and would only haul trucks outside this period in exceptional circumstances. The Department has recommended conditions of approval limiting trucking haulage to Vales Point during the night-time period from spring to autumn to half the levels modelled and has prohibited the transportation of coal to Vales Point during the nighttime period in the winter months (when inversions occur) to avoid the noise from coal truck gate bangs potentially disturbing the residents sleep. The Department considers that this transport limitation would only have a very minor impact on LakeCoal s ability to supply Vales Point, since it would still be permitted generous transport hours compared to the existing approval. 32

35 Road Traffic Noise There is no change to the trucking levels on public roads and the NIA confirmed that the development would comply with the relevant road traffic noise criteria. Construction Noise Construction noise associated with the upgrades and modifications to surface infrastructure (see Figure 5) is not anticipated to impact on local receivers. The NIA considers that the emissions from construction plant items will be lower than operating plant. Therefore, any noise associated with construction is expected to satisfy the operational criteria. Given the duration and scale of the construction activities, the Department agrees that construction noise is likely to comply with operational noise criteria. Conclusion In summary, the Department considers that the proposed extension represents a continuation of the existing development, and the Department acknowledges that there would be some minor and moderate exceedances of relevant noise assessment criteria at receiver R22. However, the overall the amenity of residents (including R22) has improved significantly since the construction of the new ventilation fans in The Department is generally satisfied that LakeCoal is implementing or planning all reasonable and feasible measures to minimise noise, and that the existing noise management regime and long-term noise goals would ensure LakeCoal continues to improve the overall noise management at the mine. Nonetheless, to manage and monitor residual noise impacts of the development, and ensure that the relevant noise criteria are adhered to, the Department has recommended conditions for LakeCoal to: comply with strict noise limits to protect the amenity of local residents; update the project s Noise Management Plan to incorporate the noise mitigation measures proposed in the EIS; and reduce night-time road haulage to Vales Point during seasons where adverse conditions apply. 5.5 Surface Water Management The EIS contains a comprehensive assessment of the potential impacts of the proposed development on surface water resources. No rivers, creeks, streams or alluvial aquifers are proposed to be undermined or are within areas that would be affected by subsidence (ie within the AoD). These surface water features are not hydraulically connected to the underground workings and are not predicted to be directly impacted by mining. Like most underground mines in the Newcastle Coalfield and in particular those beneath the lake, the mine has excess water which must be pumped from the underground workings and continually discharged from the surface facilities site. The EIS has calculated that the amount of groundwater pumped from the underground workings into the surface water management system would incrementally increase as the mine expands, from a current average of 7.6 ML/day to an average 10.5 ML/day (during the later years of the mine s life). Accordingly, the proposal would increase the volume of mine water discharged into the environment as well as increasing the duration of discharge by 14 years. To allow for this groundwater extraction, LakeCoal has obtained a groundwater extraction licence for mine dewatering and industrial use, valid until 11 March 2018 and with a volumetric limit of 4,443 ML in any 12 month period. This would account for the amount of groundwater predicted to be extracted. The site has an existing water management system which separates dirty and clean water catchments. The system is supported by existing conditions of approval and an approved water management plan (WMP) which contains stringent water quality criteria and monitoring requirements to ensure criteria are met. Dirty water from the surface facilities (including water from the oil / water separator and treated septic and bathhouse waste water) and groundwater from the underground workings is directed to the same water management structures and treated and discharged together. Swindles Creek Water is discharged from the most downstream pollution control pond at the surface facilities site into nearby Swindles Creek, before flowing approximately 100 m downstream and entering Lake 33

36 Macquarie (see Figure 5). LakeCoal s Licensed Discharge Point 1 (LDP 1) is located on Swindles Creek and is regulated by environmental protection licence (EPL) 1770 granted by the Environment Protection Authority (EPA). In its natural state, Swindles Creek would have been freshwater stream, however it has become degraded and saline due to continual discharges of saline minewater from Chain Valley Colliery since the 1960s, as well as discharge further upstream from Mannering Colliery. It is a highly modified stream and appears to have been filled at some locations, most likely due to construction of a 330 kilovolt (kv) transmission powerline easement from Vales Point. The existing water management system has performed adequately to date, with the relevant water quality criteria met for most contaminants except some metals (Ni, Cu and Al). However, it has not yet been established whether the metal exceedances are indicative of Chain Valley Colliery s discharges, upstream sources and/or background conditions. This would be determined through continued monitoring and establishment of site specific trigger values. The EPL limits have generally been met, with total suspended solid limits only being exceeded during large rainfall events. To ensure that the increased volume of mine discharge water is appropriately managed, LakeCoal proposes to upgrade and reconstruct the final sediment dam wall with impermeable material. LakeCoal also proposes to upgrade the discharge spillway to a more appropriate standard, and incorporate a new discharge monitoring point at the new spillway. This would ensure all discharge water is accounted for and appropriately monitored prior to entering Swindles Creek. The Department supports these measures as they would improve the management of discharge of treated water and would ensure accurate water quality monitoring. Additionally, the upgrade would address the poor current construction of the dam wall and reduce the uncontrolled inundation of treated saline mine water into the land adjacent to the pollution control ponds. Site Water Balance The site water balance calculated that, at a constant pumping rate from underground of 10.5 ML/day, discharge from the surface facilities site has the potential to exceed the ML/day volumetric discharge limit at LDP 1 if a 17 mm (or greater) rainfall event over a 24 hour duration occurred. Such events are modelled as occurring approximately 4% of the time (equivalent to 15 days per year). The previous site water balance only included annualised (ie averaged) runoff volumes and did not take short term, high intensity rainfall spikes into consideration. As a consequence, LakeCoal has sought an amendment to EPL 1770 to allow a volume exceedance of the EPL solely as a result of rainfall at the premises exceeding 10 mm during the 24 hours prior to commencement of the discharge. LakeCoal argues that an exemption for rainfall exceeding a level of 10 mm would ensure compliance and provide a buffer against the inherent uncertainties associated with modelling. LakeCoal considers that this EPL amendment is not an increased impact, but instead reflects a more accurate understanding of the rainfall that is collected and discharged from the site. The EPA and the Department have carefully considered this matter and do not support this proposal. LakeCoal has not fully taken into consideration all reasonable and practical measures that could be taken to prevent, control, abate or mitigate the discharge of mine water from the site, as required under Section 45 of the Protection of the Environment Operations Act Additionally, daily discharge rates of 10.5 ML/y are not anticipated to be reached until the later years of the mine life, when the underground workings have expanded significantly. This provides plenty of time for the mine to consider other reasonable and feasible measures. Such reasonable and feasible measures might include: storing groundwater within underground workings (which LakeCoal is proposing to do, once properly investigated); managing water levels in the sediment control ponds through proactive dewatering to ensure enough capacity remains for a storm event; and expanding the capacity of on-site dams to accommodate storm events. Consequently, the Department has recommended conditions of approval requiring LakeCoal to undertake a detailed review of the water management system at the surface facilities site to determine whether the capacity and retention times are sufficient to ensure that water discharged from the site 34

37 meets relevant water quality criteria and EPL limits; and to propose any necessary upgrades to ensure discharges meet these criteria. Subject to the implementation of this review, the Department is confident that LakeCoal can manage dirty water volumes to meet the volumetric limit in its EPL. Potable Water Use The amount of potable water used by Chain Valley has been predicted to increase from 132 ML/year up to 165 ML/year. Government policy encourages minimisation of potable water use for industrial purposes, where feasible and reasonable to do so. The existing approval reflects this and requires LakeCoal to identify and assess practical measures to re-use mine water and reduce potable water use. However, the Department notes there is little opportunity to re-use treated mine water as it is very saline. Accordingly, it cannot be used within the bathhouse facilities or within the underground for dust suppression purposes. The existing WMP has identified measures that would reduce potable water use by up to 7%. Measures include using mine water for dust suppression on stockpiles and haul roads, as well as installing rainwater tanks to supply the bathhouse facilities. The Department supports these measures and has recommended conditions of approval requiring LakeCoal to submit and implement a revised WMP containing further measures to minimise potable water use and to reuse and recycle water. Sewage LakeCoal treats all effluent on-site, with the bathhouse waste water treated through three septic tanks, and effluent from the office buildings disposed of by aerated irrigation on nearby garden areas. LakeCoal is currently seeking advice from Wyong Shire Council on the feasibility of connecting into a Council sewage pipeline located to the rear of the site. This connection would enable these waste water streams to be removed from the pollution control ponds on site, reducing the volume of dirty water that needs to be managed on-site. This method of disposal is preferred by the Department, given Chain Valley s proximity to Lake Macquarie and that its effluent waste streams contain high level of nutrients, surfactants and faecal coliforms, which the pollution control ponds are not specifically designed to treat. In the interim (or should it not be feasible to connect to the town sewage system) the Department has recommended a condition of approval requiring LakeCoal to manage on-site sewage in accordance with the Environmental Guidelines: Use of Effluent by Irrigation and the National Guidelines for Sewerage Systems - Effluent Management and to the satisfaction of Council and EPA. This would ensure all on-site effluent is appropriately managed. Conclusion The Department is satisfied that LakeCoal has adequately assessed the development s potential impacts on surface water resources. Following its assessment, the Department is satisfied that the proposed dam wall and spillway upgrade would improve accountability and management of surface water discharges. The Department also considers that conditions requiring an audit of the capacity of the water management system would help identify further improvements for water management at the surface facilities site. Additionally, the Department has recommended conditions requiring LakeCoal to: update its Water Management Plan, in consultation with relevant authorities, to ensure the: o surface water and groundwater assessment criteria and trigger levels are finalised; o surface water and groundwater monitoring is updated and expanded (if required); o o site water balance is updated; and surface water management at the site is audited to ensure that the water storages within the dirty water management system are sufficient to ensure that water discharged from the site meets all relevant EPL and site-specific water quality impact criteria. The Department is confident that, subject to recommended conditions, surface water resources in the region would be well managed and surface water quality and availability would be protected. 5.6 Socio-Economic Considerations The Chain Valley Extension Project has a capital investment value of $105 million, and would result in a range of significant economic benefits that must be considered in weighing its overall merits. Gillespie Economics (Gillespie) has undertaken an economic and social impact assessment of the 35

38 proposal in accordance with relevant guidelines. This assessment indicates that the project would have a net benefit to Australia in the range of $217 to $258 M, including around $64 M in revenue to the in royalties and $35 M in Commonwealth taxes. Gillespie estimates that the project would lead to the following average annual economic activity in the regional economy (ie Wyong and Lake Macquarie LGAs) throughout its life: $201 M in annual direct and indirect output; $101 M in annual direct and indirect value added; $40 M in annual direct and indirect household income; and 418 direct and indirect jobs. For the NSW economy, the corresponding predictions are: $259 M in annual direct and indirect output; $131 M in annual direct and indirect value added; $62 M in annual direct and indirect household income; and 635 direct and indirect jobs. Gillespie s economic analysis considered both environmental and social impacts. The assessment found that environmental and amenity impacts would be minor, with no properties requiring acquisition due to air or noise impacts and no major road upgrades required due to proposed haulage. Under its existing project approval, LakeCoal is required to pay $0.035 for each tonne of product coal dispatched to ensure that nearby communities receive a direct benefit from the continuation of the project, through provision of community projects for Summerland Point, Gwandalan, Chain Valley Bay and Mannering Park. The Department has recommended that the same requirement is included in the proposed new consent for the mine. The Department accepts that the development would undoubtedly result in a range of substantial economic benefits to the local region, the State and to Australia. These are significant benefits, which need to be given significant weight in assessing the development s overall merits. 5.7 Other Environmental Impacts Other potential environmental impacts associated with the project are assessed in Table 9. Table 9: Environmental Assessment of Other Issues Issue Assessment Conclusion/Recommended Conditions Greenhouse Gases Project Scope 1, 2 and 3 greenhouse gas (GHG) emissions have been estimated in accordance with the emission factors in the National Greenhouse Accounts Factors. Average annual Scope 1 (ie direct) GHG emissions were estimated to be 0.59 Mt of carbon dioxide equivalent (Mt CO 2 -e) which represents approximately 0.1% of Australia s annual commitment under the Kyoto Protocol and a very small portion of global greenhouse emissions. Total GHG emissions over the life of the project would be 66 Mt CO 2 -e (8.8 Mt Scope 1, 0.26 Mt Scope 2 and 54 Mt Scope 3). Chain Valley is known to be a gassy mine. Fugitive methane emissions (which are counted as Scope 1 emissions) are released when coal is mined, predominantly from the Fassifern Seam. The methane is emitted through the mine s ventilation system and is known as ventilation air methane (VAM), which is difficult to use for power generation or flaring purposes as the methane is highly diluted. Additionally, there is limited ability for methane pre-drainage to The Department acknowledges the threats posed by global warning and climate change. Nevertheless, the Department considers that the direct contribution of the project to national and global GHG emissions is very small and is significantly outweighed by the positive aspects of the project, including its contribution to employment and the NSW economy. The Department also considers that refusing the project would be unlikely to have any measurable impact on global GHG emissions as the gap in the market would be filled by coal sourced from other suppliers, both foreign and domestic. In the context of national and global emissions the impacts of the development are not significant. Nonetheless, the Department has recommended a condition that requires LakeCoal to demonstrate that it is minimising the greenhouse emissions generated by the proposed 36

39 Issue Assessment Conclusion/Recommended Conditions extract concentrated methane as the majority of mining would occur beneath Lake Macquarie. A range of GHG minimisation and reduction measures are proposed by LakeCoal, including energy efficiency measures, regular maintenance of equipment, and sealing of extraction panels to reduce methane leakage from the goaf. Annual GHG emissions may exceed the Commonwealth s Carbon Pricing Mechanism threshold of 25,000 t CO 2 -e. Hence LakeCoal may be required to pay the carbon tax. development. Biodiversity The upgrade of the final sediment dam wall Both OEH and the Department and discharge spillway would remove approximately 0.37 ha of a degraded form of Swamp Oak Floodplain Forest endangered ecological community (EEC). No threatened fauna species were recorded within the area to be cleared. The EIS s ecological assessment states that the EEC appears to be in transition and is generally in poor health, as is evident from the presence of dead eucalypts, weed species, dominance of sedges and rushes, and the low density and poor health of consider that LakeCoal s commitment to update its existing Biodiversity Management Plan (BMP) to include a Biodiversity Enhancement Strategy for on-site EECs would adequately compensate for the minor amount of clearing of degraded EEC. The dam upgrade works would also provide a beneficial impact by reducing the amount of saline inundation of nearby EEC vegetation allowing it to return to a more natural state over time. Swamp Oaks. Consequently, the Department has The ecological assessment considers that the present community is likely a result of salinity from uncontrolled dam discharges recommended conditions of approval establishing objectives for the Biodiversity Enhancement Strategy. over the past decades, resulting in a The Department has also transition from Swamp Sclerophyll Forest EEC to Swamp Oak Floodplain Forest EEC. The upgraded dam wall and spillway would reduce the inundation of saline water onto land adjacent to the pollution control ponds, which would help return this vegetation recommended conditions for the existing BMP to be updated to include detailed restoration and enhancement measures to ensure that the Biodiversity Enhancement Strategy objectives are met. community to a more natural state over Subject to these conditions, the time, resulting in an improved ecological outcome. LakeCoal has proposed a Biodiversity Enhancement Strategy including restoration measures such as weed removal, Department considers the impacts on biodiversity to be suitably mitigated, and that the project is likely to result in beneficial biodiversity outcomes in the long term. restoration of hydrological function (a key threatening process for swamp communities) and regeneration with native species for at least a 3 ha area (in total) of Swamp Sclerophyll Forest and Swamp Oak Floodplain Forest EECs. Air Quality The dust emissions from the proposed development were modelled and assessed by PAE Holmes. The assessment predicted that dust emissions from the surface facilities site would be well below the relevant projectspecific and cumulative air quality criteria at all residential receivers. A range of mitigation measures would be implemented by LakeCoal to minimise dust generated by the development, including enclosure of the coal crushers and screens, watering of haul roads, a wheel wash and covering of coal trucks on public roads. The existing air quality monitoring network has performed satisfactorily to date, with no The Department is satisfied that the dust generated by the proposed development would comfortably comply with relevant criteria, and would not significantly affect the amenity of local residents. The Department is also satisfied with the proposed mitigation, management and monitoring measures, and has incorporated these measures in the recommended conditions of consent, including updating the existing Air Quality Management Plan. 37

40 Issue Assessment Conclusion/Recommended Conditions exceedances of criteria detected. Visual Additional lighting would be installed around the car park, stockpiles and other areas of the site for safety reasons. The visibility of pit top facilities is limited by a relatively remote location and surrounding vegetation. The minor increase in nighttime lighting is not anticipated to increase visual impacts to any residences. All lighting would be installed to minimise off-site lighting impacts and in accordance with existing approval conditions and relevant the Australian Standard. Aboriginal Heritage Acid Sulphate Soils The EIS reported that no items of Aboriginal or non- Aboriginal heritage significance were identified within the site boundary through extensive literature reviews and database searches. The sediment dam upgrade is the only part of the development that would disturb land (approximately 0.37 ha). The potential for unexpected Aboriginal heritage finds in this area during construction is considered to be minimal due to the long history of disturbance including construction of sediment dams and the transmission line. Further, the hydrological regime in this area is associated with flooding and prolonged inundation. It is unlikely to have been used for habitation. The upgrade to the sediment dam wall and spillway would require construction works in an area that is identified as a high risk for potential acid sulphate soils (ASS). LakeCoal has committed to updating its erosion and sediment control plan to include a specific ASS management component, to ensure any encountered ASS are suitably managed. Rehabilitation LakeCoal has an approved rehabilitation management plan (RMP) that is consistent with the rehabilitation objectives set by the existing project approval. LakeCoal proposes to update the RMP to include details of the upgrade to the sediment dam wall and spillway and to take into consideration the extended project life. Bushfire Hazard The surface facilities and ventilation fan sites are located near bushfire prone areas. The development includes upgrading of water storage tanks and pumps to ensure that water is available in the unlikely event of loss of water pressure from the water mains during a bushfire emergency. In the event of a bushfire, the surface facilities site would be equipped with firefighting equipment, and staff would be trained in relevant emergency procedures. The Department is satisfied that the minor increase in night-time lighting would have a minimal visual impact on surrounding land uses and local residents, due to the isolation of the pit top facilities and the proposed installation methods. Nonetheless, the Department has recommended that LakeCoal be required to implement all reasonable and feasible measures to minimise the visual and off-site lighting impacts. The Department is satisfied that the development has a very low potential to adversely impact either Aboriginal or European heritage. Nonetheless, the Department has recommended conditions which require that LakeCoal update its Heritage Management Plan in consultation with local registered Aboriginal stakeholders, which includes methods and measures for pre-clearance surveys. The Department is confident that this would address any residual uncertainty regarding the unlikely discovery of Aboriginal heritage items. The Department supports LakeCoal s commitment and has recommended conditions requiring the preparation and implementation of a Surface Facilities Management Plan (a component of the Water Management Plan) in consultation with OEH and Council. The plan would include measures to manage ASS, if encountered. The Department is satisfied that any encountered ASS would be appropriately managed. The Department has recommended conditions of consent including updated rehabilitation objectives and the requirement to update and implement a new RMP. The updated RMP and final land use strategies would be consistent with the relevant guidelines and rehabilitation objectives. The Department is satisfied that the proposed development does not pose a significant additional bushfire hazard. It has recommended conditions to ensure that the development is suitably equipped to respond to any fires near the surface facilities sites and to assist the Rural Fire Service and emergency services as much as possible if there is a fire in the surrounding area. 38

41 6. RECOMMENDED CONDITIONS The Department has prepared recommended conditions of consent for the proposed development (see Appendix A). These conditions are required to: prevent, minimise, and/or offset adverse impacts of the development; ensure standards and performance measures for acceptable environmental performance; ensure regular monitoring and reporting; and provide for the ongoing environmental management of the development. The recommended conditions strengthen the existing Approval framework for the Chain Valley Colliery, and reflect current best practice for the regulation of underground coal mines in NSW. 7. CONCLUSION The Department has thoroughly assessed the proposed development in accordance with Section 79C and the objects of the EP&A Act, including: the environmental, social and economic impacts of the proposed development; relevant environmental planning instruments; submissions on the proposed development; the suitability of the site; and the public interest. The proposed development would not significantly increase the environmental impacts of the existing mine. In particular, the Department notes that the proposed underground mining would occur in areas entirely beneath Lake Macquarie and generally set away from sensitive features such as the lake foreshore and critical habitat such as seagrass beds. The Department is confident that any impacts to the lakebed would be minor. Subsidence control zones to protect the lake foreshore and seagrass beds have been previously successfully applied to underground mining at both Chain Valley and other nearby mining operations. The proposed development would extend the environmental impacts of the existing mine for an additional 14 years, particularly impacts regarding continued coal haulage on public roads. Minor expanded environmental impacts include night-time deliveries of coal to Vales Point Power Station and increased mine water discharge. However, the Department believes that these impacts would not be significant and can be minimised, managed and offset through appropriate conditions of consent. All 14 public submissions received from the local community supported the development. Further, all affected State agencies and Councils do not oppose the project. Agency concerns have been suitably addressed either in the RTS or the Department s recommended conditions of consent. The proposed development would result in a range of significant beneficial social and economic impacts, including continuation of 120 jobs for another 14 years, $105 M of additional capital investment and $64 M in contributions to the State through mineral royalties. The Department is satisfied that the proposed development represents a logical expansion of existing mining operations at the Chain Valley Colliery, that the site proposed for the development is suitable, and that the benefits of the proposed extension significantly outweigh any potential costs. Consequently, the Department believes that the Chain Valley Extension Project is consistent with the objects of the EP&A Act, is in the public interest and should be approved subject to conditions. 39

42 Enviro n me ntal Assessmenf Reporf 8. REGOMMENDATION It is RECOMMENDED that the Executive Director, Development Assessment Systems and Approvals, as delegate of the Minister for Planning and lnfrastructure:. cons ders the findings and recommendations of this report;. approves the development application, subject to conditions; and. s gns the attached instrument of consent (Appendix A). M t/^. Mining P Pb -t3 It.t 2. r? Mrtfuz3ttz/t3 David Kitto Director M ining Projects Chris Wilson Executive Director Development Assessment Systems and Approvals Department of Planning and lnfrastructure 40