Legislative Council Thursday 28 September 2017

Ms FORREST (Murchison) - Mr President, I support this bill.  I notice a proposed amendment has been put forward by the member for Hobart, which we will get to later.

The Acting Leader's second reading speech was very comprehensive and certainly covered all the key aspects of the bill.  It is, in many respects, modernising what is quite old legislation.  It is important that occurs on a regular basis - probably slightly more regularly than it has, one could argue.

The other matter is that the Tasmanian Minerals and Energy Council - TMEC - has been very actively involved in the consultation process around this bill.  You could argue that perhaps the environmental groups were not engaged to that degree.  They still have the capacity to have their voices heard, and they have.

This legislation is about the mining industry and it is right that the key stakeholders, particularly the Minerals and Energy Council, have been actively involved in this.

I support the move to reduce unnecessary duplication in any aspect of approvals, whether it be for mining or any other approval.  Even those of us who have had to go through the planning system to build a house know how difficult it can be.  It is costly and time is money.  Duplication adds time as well as cost.

Requiring all the environmental approval process to be with the Environment Protection Authority - EPA - is a sensible and appropriate move.  In many respects it is a bit like what we did yesterday with the finfish bill, putting it where it should be.  As I understand it, it does not dilute the requirements at all under the Environmental Management and Pollution Control Act 1994, and neither should it.  We know that mining has quite a destructive impact on our environment.  We recognise that by requiring mining companies to pay a bond to make sure the site is remediated and to pay royalties for the privilege of extracting these minerals from the land we all own.  We, the people of Tasmania, own these minerals.  Mining companies spend a lot of money finding the minerals and getting them out.  They pay for that privilege of getting them out because they make money out of it - a lot of money, at times.

At the moment it is a bit tough out there.  Mineral prices have not been good.  Some of the major miners in Tasmania have had some tough times of late, particularly with where the price of iron ore has been sitting.  Most minerals have had a significant downturn in their prices.  It has not been easy and some of these companies have just been hanging on in many respects.

It has delayed the start-up of some of these mines.  Looking at the Mount Lyell copper mine, we understand the tragic circumstances that saw that mine put into care and maintenance.  One challenge for that mine to start up is to ensure that the price is high enough to make it sustainable to get in and mine again, aside from all the other matters the company has had to address with safety.

You cannot expect a mine to continue to operate if it is not going to make money.  It costs millions of dollars to get to the point where you can start digging the minerals out of the ground.  I do not know how much an average drill hole is now; it is hundreds of thousands of dollars.  It is not $10 000 to drill a hole and see what is there.  I know the geologists are good and I am amazed at how clever they are.  There is a great landscape and they drill a hole and, more often than not, they hit a deposit. 

Mrs Hiscutt - He'll get a big head. 

Ms FORREST - You do not find them in the Core Library.  The Core Library contains core samples and gives you an indication of where things are.  A few years ago I went to a celebration at MMG in Rosebery.  They had just drilled the deepest drill hole in Tasmania - 2.5 kilometres.  The drillers had to try to hit a deposit they thought was there.  They had to aim in the other direction because as the hole was drilled, it curled back underneath itself.  They hit the deposit.  How clever are the drillers and geologists? 

The industry has to spend a lot of money before they have a viable resource to mine.  That is done under exploration licences and tenement leases.  Mr Wayne Bold, the CEO of the Tasmanian Minerals and Energy Council, says they will seek other amendments later.  The current amendments will clarify and streamline processes without diluting environmental protections.

Environmental groups raised concerns about the need to set appropriate remediation bonds.  In the past bonds were sometimes not set at all.  Look at the terrible legacy of the Mount Lyell operations from over 100 years ago.  Those operations caused enormous harm to our environment and the legacy will continue for many years.  We need to be sure that does not happen again.

There is a lot of acid drainage from the previous workings of the Grange Resources mine at Savage River.  Grange has done a lot of work with governments past and current to remediate the site as it goes on with its operations.  It is not just acid drainage and the damage that can cause to our natural environment Grange is concerned with.  The attention it gives to protecting the Tasmanian devil population on site is extraordinary.  Devils often come on site in Savage River.  The massive mining trucks have cameras front and back and if they come across a devil, they have to stop.  The devil has right of way and will be relocated off the site. 

Mrs HISCUTT - I have been told that the workers are also trained in flora, so they have to know the plants.

Ms FORREST - Yes, that is right.  They take it very seriously.  They have done a huge amount of work at that mine site.  To be honest, it is a big, ugly hole in the ground that will require major rehabilitation when it ceases life.  In recent years there have been a number of times when it looked like it was going to end, but exploration has allowed access to a viable resource.

It is important to remember that mining companies take their environmental responsibilities seriously, and they should.  The remediation bonds are there to ensure they cannot just walk away and leave a site unremediated.

At the briefing yesterday, we were challenged by the environmentalists about the adequacy and the process of setting these bonds.  The claim was made that the bonds are never increased and if you go through this process, you will find the bonds will be set without the full environmental assessment being done. 

As I understand it, a licence to operate a mine will not, and cannot, under the legislation, be granted until the full environmental impact assessment has been done through the EPA, and the planning approval has been done and the licence is issued, and the other requirements there.  Whether you put one before the other, if they both have to be achieved before you can start digging a hole in the ground or even scratching the surface, other than a drill hole, I cannot see what the problem is with that.

We were advised that if they found, through the EPA assessment, that more environmental harm was likely and the bond set with the initial mining plan was deemed inadequate because of what the EPA had found, it would, could and should be increased.

I will listen to other arguments on this.  This might be a matter that will be mooted later.

That is perhaps the contentious issue, if there is a contentious issue in the bill.  I asked a question in the briefing yesterday about whether mining bonds are increased.  We were told by the representatives of environmental groups that they are not and that it simply does not happen.  We were assured it has happened and there are regular reviews.  Under this new framework, it could happen after the EPA has done its work, if it is apparent the bond is inadequate.

I will read into Hansard a follow-up email we received.  It is signed by Peter McGlone, Jenny Weber and Scott Jordan and it challenges some of the things we were told.  It is always hard when you hear one party, hear another party, and the other party does not get a right of reply.  I would like the Acting Leader to address some these comments in her reply.  The letter is written to the Acting Leader but it was provided to all of us -

Thank you for the opportunity to brief members of the Legislative Council regarding the Mineral Resources Development Amendment Bill 2017 and our organisations proposed amendment. 

We wish to provide the following brief responses to statements made by the representatives of Mineral Resources Tasmania.  We would be available at any time today to appear before members again to discuss these or other points.

MRT stated that the security deposits for mining operations are determined after viewing the completed mining plan.  However, the mining plan only outlines the mining operation and contains no information about environmental values or the likely impacts.  These issues are covered in the Environmental Impact Statements provided under LUPA.

MRT stated that the mining plan was not considered in the LUPA processes.

I am not sure that was true.  I did not think they said that, but I am reading what has been provided and the Acting Leader can respond -

This is an error.  Mining plans are submitted as part of the supporting documentation for Environmental Impact Statements and are referred to in the primary documents and then submitted as appendices.

The details of the mining plan, such as size and location of pit and portals, tailings dams, roads and waste dumps, form a critical part of the LUPA consideration on environmental impacts.

When I read that, I thought they are actually admitting it is assessed -

MRT contradicted us by stating that security deposits are regularly changed, outlining circumstances which might trigger a reassessment of a security deposit, including changes to how the mine was operated or an expansion of the mine. 

Our point was that security deposits are not increased simply in response to an awareness that the level of security was inadequate to address environmental issues known at the time of approval.

Additionally, an expansion of a mine does necessitate a new LUPA approval, which should then inform the level of increased security deposit required.  MRT also referred to reviews at 3-5 intervals -

I think they mean yearly - it is not included in the email - 

on some projects.  We would note that neither the Scotia mine nor the Nelson Bay River mine lasted this long, and that the proposed Riley Creek and Livingstone mines were only ever 2 year projects, therefore unlikely to be reviewed. 

MRT put the argument that mining companies need a mining lease prior to other approvals, to be able to raise funds to establish a mine, and that requiring a LUPA approval prior to a lease was 'unusual' and would in some way disrupt their ability to raise funds to establish their mine.

In our experience, proponents seek capital at varying stages, and most capital raising, whether by share floats or commercial financing, will contain a series of 'subject to' clauses requiring approvals, securing of off-take agreements and other evidence of progression prior to releasing the funds.  We hope this information is helpful in your deliberations.

The mining plans should contain information about where the mine is, how it is going to be mined, how they will deal with tailings and waste rocks, whether it is going to be underground or open cut, where the portals will be and other matters related to that.

It should be the principal document, and the lease should be linked to it.  You need the mine plan to inform the LUPAA process, including the EPA assessment.

It seems like the chicken or egg question.  I wanted to raise that matter because there does not appear to be problems with the other aspects of the bill.  It clarifies and tidies up some of the historical issues and reduces unnecessary duplication.

A lot of abandoned mines in our state have not had adequate funding to remediate them.  When we approve new mines we must set adequate bonds to ensure those mine sites can be remediated.  Some mining companies remediate as they go.  If they are doing that, it is a valid argument that those bonds could be reduced as the requirement to remediate becomes less.

There needs to be flexibility.  Our mining industry makes an important contribution to our state, particularly when the prices are good.  Royalties are made up of two components, one of which is based on profitability, which varies with mineral prices.

Mining must also respect the environment.  We cannot and should not have no controls.  Mining contributes to the state's economy and creates a lot of employment.  Hopefully more employment will be created on the west coast if Mount Lyell and some other projects get going.

I support the bill and will be interested to hear what other members say about the concerns of the environmental groups.  I do not think it will allow mines to operate without an adequate bond in place.  The assessment will continue as it should and not be diluted or diminished in any way.