The shift to extraction plans

WILL changes to the subsidence management approval process by the New South Wales government save time and money? By Patrick Holland, partner, McCullough Robertson Lawyers
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Patrick Holland.

Staff Reporter

Recent approvals from the NSW planning minister for underground mines contain conditions aimed at streamlining the subsidence management planning approvals process. This was due to the significant interest in mine-induced subsidence impacts, along with industry requests for a more coordinated and efficient approvals process.

The new process will be coordinated by the NSW Department of Planning and it likely will involve input from other government agencies and stakeholders.

With environmental impact assessment reports for underground projects containing significant subsidence impact analysis, the government should move quickly to a point where an approval for a project from the planning minister is final and certain, and most importantly, gives mining companies certainty when mining operations can commence.

Apart from the relatively recent interest in the impacts of coal exploration drilling and coal seam methane gas exploration, no other single issue has attracted more significant interest in NSW than the subsidence impacts of longwall mining.

A key outcome of the approval for BHP Billiton’s Dendrobium Coal Project in the NSW Southern Coalfields by the minister for urban affairs and planning in 2001 was the subsequent unilateral amendment by the then mineral resources minister of all authorities for underground mining in NSW to include conditions requiring comprehensive subsidence management plans (SMP) to be approved by the minister before longwall mining could commence.

At the time approval was granted one of the key impacts identified for the project was the impact of subsidence on Sydney’s drinking water catchment.

Arguably the catalyst for broad stakeholder interest in subsidence management in the NSW Southern Coal Fields in the late 1990s was the impact of mining on the beds of creeks and rivers in the Nepean catchment, as well as residences and infrastructure in the Appin-Camden areas south of Sydney.

The SMP approval process replaced the “tried and true” s138 Coal Mines Regulation Act 1982 (repealed) approvals process which was administered solely by the NSW Department of Mineral Resources.

The s138 process required operators to obtain approval from the minister if they were using methods other than bord and pillar systems. Notwithstanding this, the process was administered solely by the Department of Mineral Resources with highly qualified and experienced technical experts who were familiar with subsidence issues and longwall mining operations.

Preparation of SMPs involved a significant amount of detailed technical assessments and stakeholder consultation. Generally the plans were not controversial, which is most likely because of the highly technical nature of the subject, and most importantly because of the significant amount of site-specific information.

For example, the SMP produced in 2008 by Xstrata Coal for its Beltana operations in the Hunter Valley contained individual property management plans for private landholdings and structures that were likely to be affected by subsidence impacts.

This approach received significant support from state and federal agencies. Xstrata first began doing this in 2004 with the first SMP for its operations at Bulga in the Hunter Valley.

In June 2009, the then NSW planning minister announced the approval of the Metropolitan Coal Project near Helensburgh. This approval attracted significant interest from the media, government agencies, NGOs and the media.

The approval process was, arguably, one of the most rigorous for any underground coal mining project in NSW. Following receipt of the project application in July 2008, the minister referred it to the Planning and Assessment Commission to assess the application, to hold public hearings and report back to the minister.

The approval process was subject to further rigour, as confirmed by this statement in the NSW Department of Planning Director General’s Assessment Report for the Project:

“In recognition of concerns raised in public and agency submissions and by the PAC during the assessment process, the department required HCPL to prepare a Preferred Project Report (PPR) for the project. A draft of the PPR was submitted to the department and was provided to the PAC during its review. The PAC prepared its report in the light of this draft of the PPR. An expanded and final version of the PPR was provided to the department on 21 May 2009 ...”

Bear in mind the fact the project application was submitted in July 2008 and ultimately approved by the minister in June 2009.

On receipt of the approval from the minister, most in the industry in NSW would know that for mining to commence a SMP would subsequently have to be prepared and submitted to the Department of Mineral Resources. So, after almost 12 months of detailed assessment, work would have to commence on the SMP approval process.

The Metropolitan Project Approval changed this (to some extent) with the inclusion of a number of conditions relating to subsidence management, including modelling and predictions. The most significant condition was one that required Metropolitan to prepare an extraction plan for second workings.

Most importantly, this had to be prepared by “independent experts” who were approved by the Director General of the DOP. The plan subsequently had to be approved by the Director General of the DOP before any second workings could commence.

This effectively brought an end to the SMP process in NSW and also the DMR (now Department of Industry and Investment) having sole responsibility for approving subsidence management plans.

Another area which DOP sought to assume more direct responsibility was mine rehabilitation, coincidentally another area which DMR previously had principal administrative responsibility for.

This new approach was recently confirmed with the planning minister’s approval of Ulan Coal Mines’ Ulan West Project on November 15, 2010, with the inclusion of a condition that is identical in substance to the Metropolitan Extraction Plan Condition.

It should be noted that mine owners and operators who receive approvals with a similar condition in the future should immediately make an application to the Department of Industry and Investment to suspend or remove the “standard subsidence management” conditions from their respective authorities.

The move to extraction plans is a positive initiative, but there is a legitimate concern that the DOP does not have the necessary in-house technical expertise to consider the merits of the extraction plan and other plans which had previously been the responsibility of DMR/DII.

In this regard it is understood that DOP has no internal capability to review the technical merits of the extraction plan and it would follow that, although not required in the Part 3A approval, DMR/DII would have to be directly involved in determining whether the extraction plan should be approved.

Based on the extraction plan conditions for Metropolitan and Ulan, one option that is open to mine owners and operators in anticipation of having a similar condition in a project approval is to prepare a draft extraction plan for inclusion in the project environmental assessment report.

Depending on how advanced the mine planning is, such an approach should be relatively straightforward and would simply build on what is usually the most significant technical report in the environmental assessment report for an underground mine project application.

Such an approach is likely to reduce the gap between project approval and the commencement of second workings.

Mining companies preparing a project application for underground mining in NSW are strongly urged to adopt such a process, which will save significant time and money.

McCullough Robertson is able to advise on the appropriate steps owners and operators should take, giving far more certainty than is currently the case, particularly where the agency responsible for approving the extraction plan has no in-house expertise to determine the merits of the extraction plan.

For more information, contact Patrick Holland on (02) 9270 8610, or email

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