New plan proposed for State significant coal mine extension

In December 2021, the NSW Government declared South32’s proposal to extend its Dendrobium coal mine as State Significant Infrastructure (SSI) due to the projects strategic importance as a provider of metallurgical coal to Port Kembla steelworks. This means that the Minister for Planning will now be the consent authority for the proposal and not the IPC.

Last week, the environmental impact statement (EIS) for revised expansion plans for the Dendrobium mine expansion, which is operated by South32 subsidiary Illawarra Metallurgical Coal, has been placed on public exhibition.

South32’s original Project proposal to extract 78 million tonnes of coal until 2048 was refused consent by the Independent Planning Commission (IPC) in February last year.

The revised Project proposal involves the continuation of longwall mining activities at the underground Dendrobium Mine with a new underground mining area within the existing mining lease. However, the revised Project proposes to extract approximately 31 million tonnes of additional ROM coal until the end of 2041. The overall proposed mining footprint has been reduced by approximately 60% from the previous application with associated decreases in impacts to key surface features including streams, swamps and Aboriginal heritage sites.

Reduced water impacts

According to the new EIS, the revised expansion plan would have significantly reduced impacts on water, with peak annual surface water losses reduced by 78% compared to the earlier expansion proposal. The company has also agreed to offset the water losses, which were estimated to be less than one per cent of the Avon and Cordeaux catchment yields. The revised Project also nearly halves the total length of streams that will have mining carried out underneath them and reduces the number of listed swamps that will have mining beneath them by 40%.

Carbon costing

For the original Project plan, the economic impact assessment of the Project assumed the indirect cost to NSW of the mine’s greenhouse gas (GHG) emissions would be $100,000 based on operational emissions only and an assumed carbon price of $13.52 (the average emissions reduction fund (ERF) auction price at that time).

For the revised Project plan, the new economic impact assessment included a “sensitivity analysis” based on several US estimates of the social cost of carbon that range from a starting price of $103.90 per tonne, rising to $137.70 by 2041.

According to the new economic impact assessment, the indirect costs to Australia of the mine's greenhouse gas emissions would be $945.30 million. Based on NSW's share of Australia's population, this would result in NSW incurring an indirect greenhouse gas emissions cost of about $309 million. Ultimately, the economic impact assessment concluded that the Project’s direct and indirect economic contribution would mean that it would still have a net economic benefit for NSW.

Next steps for the Dendrobium project

The revised Project plan has sought to engage with a number of the IPC findings, particularly in relation to the impact on the water catchments surrounding the mine. The next step in the assessment process is for the public to provide submissions on the new Project and for the proponent to respond to those submissions. The Department of Planning and Environment will then prepare an assessment report for the Minister of Planning to consider in determining whether or not to approve the new Project.