Background
Illawarra Coal Holdings Pty Ltd (IC) is an Australian company which carries out approved underground coal mining operations and operates associated surface facilities and infrastructure at the Dendrobium Coal Mine, at Kembla Heights, west of Wollongong.
In October 2018, after receiving a complaint, NRAR began investigating alleged unauthorised take of surface water at the mine.
NRAR’s investigation confirmed that the underground mining operations caused the incidental take of surface water. The Water Management Act 2000 requires miners to hold a water access licence for any water taken through mining activities.
Although IC held and continues to hold a number of groundwater access licences for its underground operations at the Dendrobium mine, it did not hold any water access licence for its incidental surface water take.
The mine is in an area where the surface water bodies above it are part of Sydney’s drinking water catchment. Until March 2023 almost all of the drinking catchment water was allocated to surface water access licences held by Water NSW and licences in this area were not available to other water users, such as IC. Important changes to the licensing framework now mean that the mine can obtain a licence and water allocations to account for surface water taken. IC applied for a licence in March 2023.
Prior to NRAR’s investigation, the company sought a solution to account for incidental surface water taken at the Dendrobium Coal Mine. Because surface water taken into the mine’s workings mixes with groundwater, the mine bought more groundwater entitlements to account for incidental surface water take. Unfortunately, this mechanism did not bring the mine into compliance with the requirements of the Water Management Act.
The alleged breach
IC did not hold a water licence for surface water take at the Dendrobium Coal Mine for the 2018-2019, 2019-2020, 2020-2021, 2021-2022 and 2022-2023 water years.
This meant that the mine did not directly account for surface water take across those water years, despite holding groundwater access licences. The mine operator was therefore allegedly in breach of section 60A(2) of the Water Management Act 2000, which prohibits the taking of water without a licence. Under section 60I of the same Act, a mine is required to hold an access licence where water is taken during the course of mining.
The undertaking
NRAR entered into an enforceable undertaking (EU) with IC on 30 June 2023. The company acknowledged the alleged contravention and undertakes to carry out the commitments and preventative measures set out in the EU.
Under the terms of the EU, IC will:
- Acknowledge the alleged breaches occurred during the 2018-2019, 2019-2020, 2020-2021, 2021-2022 and 2022-2023 water years.
- Provide a bank guarantee for a monetary contribution of $2,878,138 for a community project that will improve the health of waterways and/or restore wetlands. The community project proposal must be put forward to NRAR to consider by 30 September 2023.
- Start delivering the community project within 3 months of NRAR accepting the community project proposal.
- Consult with local Aboriginal communities and groups connected to the area where the community project will be undertaken.
- Commit to improved surface water management by investing in and using an array of new and emerging technology and report the results back to NRAR annually.
- Commit to regular reporting to NRAR about consultation, community project progress, and other aspects of the agreement.
- Pay NRAR $70,000 to cover investigation, legal and EU monitoring costs, with the option to increase this sum once the community project proposal is received.
- Place an agreed media notice in certain agreed publications detailing the undertakings in the EU.
- Report to NRAR on compliance with all undertakings at agreed intervals.