Galilee Basin/Abbott Point coal projects in courts in Queensland

Articles Written by Paul Jardine (Consultant), Aimee Mundt

Projects in the Galilee coal basin in Queensland are expected to generate billions of dollars of investment in Queensland in the near future. There have been two significant recent court cases relating to mining projects in the Galilee Basin. These important decisions are briefly summarised in this article.

Waratah Coal Pty Ltd v Coordinator-General, Department of State Development, Infrastructure and Planning [2014] QSC 036

The first notable decision was that of Waratah Coal Pty Ltd v Coordinator-General, Department of State Development, Infrastructure and Planning [2014] QSC 036. Waratah Coal Pty Ltd (Waratah) proposes to develop, in conjunction with Chinese investors, the "China First Coal Project". This project involves the development of a thermal coalmine in the Galilee; a heavy haul standard gauge railway line of approximately 500 kilometres to transport coal; and an additional export terminal at Abbot Point. The Hon. Mr Clive Palmer MP is associated with this project. Waratah applied to the Coordinator-General for a proposed 'Stand Alone Jetty Project' at Abbot Point to be declared as a "significant project".

State Government policies

The State Government had considered a number of other projects involving development of the Galilee Basin and terminals at Abbott Point and had particularly considered the concerns of rural and environmental groups with the number of developments proposed. The State announced that it preferred development of multiple use terminal facilities on an incremental basis to meet demand over time.

The Coordinator-General had regard to a number of matters, including State government policy and studies about the future use of land in the Abbot Point State Development Area, and declined the application.

Waratah's arguments

Waratah appealed the decision and sought a declaration that it was not a valid exercise of statutory power. Waratah submitted, amongst other things, that:

  • The Coordinator-General erred in law by identifying ministerial statements and correspondence as 'policy frameworks' and study documents as 'policies' to which he was entitled to have regard under the State Development and Public Works Organization Act 1977 (Qld) (SDPWO Act);
  • The Coordinator-General erred in law by allowing his decision to be dictated by the announced 'policy' of the government, rather than exercising the power under the SDPWO Act in accordance with the relevant criteria;
  • The Coordinator-General should have delayed the decision until the recommendations of an independent facilitator were known;
  • The Coordinator-General acted without evidence in reaching certain factual conclusions which were material to his decision and failed to take into account a range of relevant considerations.

Supreme Court decision

Applegarth J held that it was not shown that the Coordinator-General gave only a perfunctory or cursory consideration of relevant matters and failed to give proper consideration to them in assessing the merits of the application. The Coordinator-General did not merely apply government policy. Instead, the Coordinator-General had regard to the relevant material placed before him and was entitled to conclude that declaring a project to be a significant project would implement an approval process which was inconsistent with government policy.

Accordingly Waratah was not successful at first instance.

It should also be noted that the project is able to proceed under alternative approval processes available in Queensland.

The second important case involved the $3.4 billion Alpha mine project.

Hancock Coal Pty Ltd v Kelly & Ors and Department of Environment and Heritage Protection (No. 4) [2014] QLC 12

The decision in Hancock Coal Pty Ltd v Kelly & Ors and Department of Environment and Heritage Protection (No. 4) [2014] QLC 12 was handed down by the Queensland Land Court on 8 April 2014.

Hancock Coal Pty Ltd (Hancock Coal) proposes to construct the Alpha Mine, located approximately 130km south-west of Clermont, in the Galilee Basin. This project also includes the construction of a rail line linking the Alpha mine to Abbot Point and the construction of a new coal terminal. In September 2011, the Indian multinational GVK acquired a 79% interest in the mine with Hancock Prospecting Group retaining a 21% interest.

The Court noted the significance of the Alpha project to both the Queensland and Australian economies and observed that if the mine was approved it would lead to significant investments in infrastructure and the development of other mines in the Galilee. On the other hand, the Court noted that if the Alpha mine was not developed 'the development of the Galilee may be somewhat more problematic'.

The hearing was to determine if the grant of the Mining Lease under the Mineral Resources Act 1989 (Qld) and the related Environmental Authority under the Environmental Protection Act 1994 (Qld) should each be recommended to the relevant Ministers (being steps required under relevant statutes).

Public and land owner objections

There were a number of concerns raised by objectors including potential impacts on water resources, climate change, the social cost of carbon and economic impacts including environmental, ecological and social costs.

Firstly, the objectors argued that the impact assessment of the groundwater was flawed as it was based on a model that was contradictory and unreliable. It was submitted that there was not sufficient information available to support a decision to approve the mine.

Secondly, the objectors submitted that Hancock Coal's assessment of the mine's impact on climate change ignored the global impact of burning mined coal. They argued that the burning of coal was a direct consequence of the mine and therefore a relevant consideration under the relevant legislation.

Thirdly, the objectors argued that the economic model utilised by Hancock Coal in its environmental impact assessment failed to consider the detriments of the project whilst overstating the benefits and, therefore, a decision-maker could not properly decide if the project should be approved.

Carbon impacts

After considering the evidence of expert witnesses, Member Hon. Paul Smith concluded that whilst the global impacts of carbon attributable to mining operations were difficult to precisely determine, the Alpha mine would have no 'net impact' on GHG and that Scope 1 and Scope 2 emissions, from a global perspective, were likely to be infinitesimal. One reason for these conclusions being that coal could and would be readily sourced from other countries.

It should also be noted that the decision followed the Land Court's decision in the Xstrata case regarding the limited extent to which general concerns relating to climate change may be considered in these matters.

Land court decision

In a somewhat curious and controversial decision, the Land Court held that the relevant applications for the Mining Lease and related Environmental Authority should either be rejected, or in the alternative, if approved be subject to a number of conditions. Member Hon. Paul Smith took a precautionary approach when considering the impact of the project, and stated that he was concerned about the consequential effects to the ecology should the predictive groundwater modelling relied on by Hancock Coal not be accurate. It was for this reason that Smith stated the applications should be rejected or in the alternative that approval should be subject to Hancock Coal first obtaining licences to take, use and interfere with water under the Water Act 200 (Qld) such that all concerns could be appropriately addressed.

The decision left both sides claiming victory in the press. Subject to appeal (if any) of the recommendations, it is now up to the Queensland Government to assess the non-binding decision of the Land Court and determine whether all or any of the recommendations made will be imposed on Hancock Coal.

Please let us know if we can assist with enquiries in relation to the above decisions or development of the Galilee Basin generally.

Important Disclaimer: The material contained in this article is comment of a general nature only and is not and nor is it intended to be advice on any specific professional matter. In that the effectiveness or accuracy of any professional advice depends upon the particular circumstances of each case, neither the firm nor any individual author accepts any responsibility whatsoever for any acts or omissions resulting from reliance upon the content of any articles. Before acting on the basis of any material contained in this publication, we recommend that you consult your professional adviser. Liability limited by a scheme approved under Professional Standards Legislation (Australia-wide except in Tasmania).

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