Citigold Corporation Limited v Chief Executive, Department of Environment and Heritage Protection (No. 5)
[2016] QLC 62
•31 October 2016
LAND COURT OF QUEENSLAND
CITATION: Citigold Corporation Limited v Chief Executive, Department of Environment and Heritage Protection (No. 5) [2016] QLC 62* PARTIES: Citigold Corporation Limited
(appellant)
v Chief Executive, Department of Environment and Heritage Protection
(respondent)
FILE NO/s: EPA055-15 DIVISION: General Division PROCEEDING: Appeal against determination of financial assurance for an Environmental Authority DELIVERED ON: 31 October 2016 DELIVERED AT: Brisbane HEARD ON: 7-16 December 2015; 3-6, 18, 19 February 2016; 10, 11 March 2016; 12-16 September 2016; 24 and 27 October 2016 HEARD AT: Brisbane MEMBER: PA Smith ORDER/S: 1. The Appeal is allowed and the decision of the respondent is set aside.
2. The Financial Assurance is determined in the sum of Five Million, Three Hundred and Sixty-Eight Thousand, Eight Hundred and One Dollars ($5,368,801).
3. The form of the Financial Assurance is a Bank Guarantee from an approved financial institution.
CATCHWORDS: APPEAL – GENERAL PRINCIPLES – appeal de novo of administrative decision
COURTS – JURISDICTION AND POWERS – where Court standing in place of administrative decision-maker
ENERGY AND RESOURCES – MINERALS – COURT EXERCISING JURISDICTION IN MINING MATTERS – calculation of Financial Assurance payable
ENVIRONMENT – rehabilitation – determination of Financial Assurance payable by Mining Company in light of Plan of Operations
EVIDENCE – GENERAL PRINCIPLES – expert evidence – where conflict in expert evidence – where evidence of the nature of expert evidence given by witness not called as an expert – where witness had expert credentials
MONEY – Financial Assurance – determination of – factors to be considered
MONEY – Financial Assurance – form of payment
MONEY – Financial Assurance – whether contingency payable
Acts Interpretation Act 1901, s 14A
Environmental Protection Act 1994, s 287, s 288, s 289, s 292, s 295, s 521, s 524, s 527, s 528, s 530, s 548
Environmental Protection Regulation 2008, s 17B
Financial Assurance under the Environmental Protection Act 1994 – GuidelineMineral Resources Act 1989
Alliance to Save Hinchinbrook Inc v Cook (2006) QSC 84
Citigold Corporation Limited v Chief Executive, Department of Environment and Heritage Protection (No. 3) [2016] QLC 21
Cuthbert v Moreton Bay Regional Council (2015) QPEC 36
Cuthbert v Moreton Bay Regional Council (2015) QPEC 63
Garbler v Redland Shire Council (2001) QPEC 028
Gladstone Ports Corporation v Queensland Heritage Council (2012) QPEC 9
Oakley v The Chief Executive Administering The Coastal Protection & Management Act 1995 (2014) QPEC 58
Origin Energy Electricity Ltd v Queensland Competition Authority (2014) 1 Qd R 216
Minister for Immigration and Citizenship v Khadgi (2010) 190 FCR 248
R v Hunt; Ex Parte Sean Investments Pty Ltd (1979) 180 CLR 322Sanpine v Koompahtoo Local Aboriginal Land Council (2005) NSWSC 365
Trevisan v FCT (1991) 101 ALR 26
APPEARANCES: Ms McIntyre of counsel for the appellant
Mr Dillon of counsel for the respondent
SOLICITORS: Holding Redlich for the appellant
Litigation Unit, Department of Environment and Heritage Protection for the respondent
*Pursuant to r 21 of the Land Court Rules 2000, this is a corrected decision issued on 4 November 2016, and replaces the original decision issued on 31 October 2016.
Contents
Opening
Overview
Summary of Citigold’s Position
Summary of Respondent’s Position
Chronology
The Hearing
Urgency
The Relevant Legislation
Onus of Proof
Analysis of Witnesses
Ms Reupena
Mr Lynch
Mr Towsey
Ms MinnesmaThe Expert Evidence
Mr Thompson
Mr Anderson
Areas of Agreement of the Experts
JER 2 Report Agreement Areas
Matters of Agreement during Concurrent Evidence
Submissions Regarding the Expert EvidenceKey Issue – Inclusion or Exclusion of Infrastructure
Blackjack USL
Precautionary Principle
Citigold’s Submissions
Respondent’s Submissions
Assessment of applicability of Precautionary PrincipleCalculating the Financial Assurance Payable by Citigold
TSF High Risk or Low Risk
WRD High Risk or Low RiskContingency
Financial Assurance Calculations Using Exhibit 68Determination
ORDERS:
Appendix A – Glossary …………………………………………………………………….. 107
Opening
[1]Throughout this decision, various technical terms will be referred to. These terms all feature in the evidence and/or the submissions of the parties. To save duplication and confusion, this decision will follow a glossary. The terms or abbreviations used in the glossary will be used in the body of this decision, generally without further explanation, as that term is already defined in the glossary. For instance, reference to TSF in this decision is a reference to the Tailings Storage Facility which is defined in the glossary and referred to in Exhibit 54.
[2]The glossary is set out in Attachment A to this decision. The glossary is formally incorporated into this decision and forms part of the reasons.
Overview
[3]This Appeal concerns the amount of financial assurance to be paid by the appellant Citigold Corporation Limited (ACN 060 397 177) (Citigold) in satisfaction of a condition of its environmental authority.
[4]Citigold:
(a)owns and operates the Charters Towers Gold Project, an open cut and underground gold mining operation at Charters Towers, Queensland (the Project);
(b)is the holder of Environmental Authority (EA) (MIM800084602) and (MIN102516311) (together known as EPML00556713) [Exhibit 6 (Doc. CAT-05)] in respect of the Mining Leases[1] for the Project; and
[1]The ML’s covered by the EA as described in the Plan of Operations are: Central ML’s 1347, 1385, 1398, 1472, 1488, 1491, 1499, 1545, 10005, 10093, 10193, 10196, 10208, 10281 and 10283; Black Jack ML’s 1387, 1407, 1408, 1409, 1424, 1428, 1429, 1430, 1431, 1432, 1433, 1548, 1585, 1735, 10032, 10042, 10282, 10284, and 10285; Imperial ML’s 1348, 1490, 1521 and 10222. [Exhibit 6 (Doc. CAT-05)].
(c)as a condition of its EA, is required to provide a financial assurance in the amount and form required by the administering authority prior to the commencement of activities under its EA.
[5]The appellant prepared a plan of operations for the period October 2014 to October 2016 and gave the plan of operations to the respondent on or about 31 October or early November 2014.[2]
[2] At [31]; Exhibit 9, at [18].
[6]The appellant’s 2014-2016 plan of operations calculated and stated a proposed financial assurance amount of $587,000.[3]
[3] At [2] and Exhibit CAT-5, p 229ff; Exhibit 9, at [26]-[27].
[7]The respondent was required to decide the amount and form of the financial assurance following receipt of the plan of operations: s 295 of the EP Act.
[8]On 27 November 2014 the respondent determined that a financial assurance in the amount of $12,509,000 was required.[4]
[4] Exhibit 9, at [29].
[9]Citigold filed an Appeal on 23 February 2015[5] against the Respondent’s administrative review decision to confirm the amount of financial assurance required to be paid by Citigold under the Original Decision. An Amended Notice of Appeal was filed on 19 May 2015.[6]
[5] Exhibit 1, p 1.
[6] Exhibit 2.
[10]This matter was been referred to the Land Court pursuant to s 524 of the Environmental Protection Act 1994 (the EP Act).
[11]The Appeal has proceeded by way of hearing de novo.[7]
[7] See below for further submissions regarding this point.
[12]The Court, in making its decision, has the same power as the administering authority[8] and it may:
[8] Section 528 of the EP Act.
(a)confirm the decision;
(b)set aside the decision and substitute another decision; or
(c)set aside the decision and return the matter to the administering authority who made the decision, with directions the Court considers appropriate.[9]
[9] Section 530 of the EP Act.
[13]In deciding the Appeal, the Court is not bound by the Original Decision or Review Decision and must:
(a)assess the proposed amount of financial assurance contained in Citigold’s Plan of Operations;[10] and
[10] Exhibit 6.
(b)decide the amount and form of financial assurance in accordance with s 295 of the EP Act.
[14]In this respect, the Court:
(a)must have regard to:
(i)any relevant regulatory requirements; and
(ii)any criteria stated in a guideline made by the chief executive and prescribed under a regulation.[11]
[11] Section 295(3) of the EP Act.
(b)can not require financial assurance of an amount more than the amount that, in it’s opinion, represents the total of likely costs and expenses that may be incurred taking action to rehabilitate or restore and protect the environment because of environmental harm that may be caused by the activity.[12]
[12] Section 295(4) of the EP Act.
[15]A map which clearly indicates the location of the various mining leases which make up the Citigold project was prepared by an expert witness, Mr Anderson. It is Figure 1 of Exhibit 11 and is as follows:
Summary of Citigold’s Position
[16]Citigold has summarised its submissions as follows:[13]
[13] Citigold’s submissions, paras [11]-[14].
“11. For the reasons outlined in these submissions, Citigold submits that:
(a)in making a decision about financial assurance, the Court can be satisfied that the:
(i)PoO complies with the requirements of section 288 of the EP Act;
(ii)rehabilitation program contained in the PoO complies with the conditions of the EA;
(iii)Citigold can, and has, entered into agreements with the underlying landowners regarding the retention of infrastructure on the tenements subject of the EA;
(iv)the rehabilitation program contained in the PoO is appropriate given the:
(A) nature
(B) staging and areas of proposed rehabilitation works;
(C) the proposed rehabilitation techniques; and
(D) the rehabilitation land form criteria in the EA.
(v)the FA is appropriate in light of the proposed rehabilitation program contained in the PoO;
(vi)alternatively, the rehabilitation program proposed by the expert for Citigold and outlined below is appropriate given the:
(A) nature
(B) staging and areas of proposed rehabilitation works;
(C) the proposed rehabilitation techniques; and
(D) the rehabilitation land form criteria in the EA.
and, the FA should be assessed in accordance this.
(vii)in the alternative to the FA stated in the PoO, the amount of financial assurance proposed by Mr Thompson in the joint report and identified as WPT1 is appropriate to satisfy the legislative purpose of providing for financial assurance; and
(viii)Alternatively, in the event that the Court does not accept the landowner agreement and infrastructure statement, that certain infrastructure has a residual beneficial use which does not interfere with the conditions of the EA and accordingly should remain in situ, with financial assurance reduced proportionately.
(b) in making a decision about financial assurance, the Court can not:
(i) impose its own rehabilitation program;
(ii)have regard to the principles regarding an environmental management decision; and
(iii) have regard to the precautionary principle.
MATTERS FOR THE COURT TO DECIDE
12.The substantive issue for the Court to determine is the amount and form of financial assurance to be paid by Citigold in compliance with its EA. In this respect, consideration of the following is also required:
(a)which version of the Guideline: Financial assurance under the Environmental Protection Act 1994 [Exhibits 26 and 69] applies, and how it is to be followed;
(b) whether the calculator must be followed and if so, to what extent;
(c)whether or not there are any other ‘relevant regulatory requirements’ (s295(3)(a) EP Act);
(d)whether or not a rehabilitation plan can be imposed on an environmental authority holder;
(e) what rehabilitation assumptions can be relied on when calculating FA:
(f)whether or not the infrastructure agreements satisfy the requirements of the Environmental Authority and/or the Guideline;
(g)whether or not the rehabilitation program included in Citigold’s PoO is appropriate considering the:
(i) nature,
(ii) staging and areas of proposed rehabilitation works,
(iii) the proposed rehabilitation techniques and
(h)the rehabilitation landform criteria in its Environmental Authority.; and
(i)whether or not the proposed FA corresponds with the rehabilitation program.
13.In answering the question of whether the rehabilitation program is adequate and appropriate, the Court ought consider inter alia:
(a)Whether the material contained in the Tailings Storage Facility and the waste rock stock piles ought be classified as ‘high risk’ or ‘low risk’ material; and
(b)Whether, in the absence of the Infrastructure Agreements, improved rural outcomes are consistent with the conditions of the environmental authority and certain infrastructure should be retained for such purpose.
14.Citigold’s position is inter alia that:
(a)absent the infrastructure agreements, some built infrastructure if left at the relevant sites will add value to subsequent rural land use and should be retained in situ;
(b)post mining, the Tailings Storage Facility (TSF) structure needs to be converted so that it is no longer a referrable high risk dam structure and that it sheds water and is strongly vegetated;
(c)assessments of material taken at site, pursuant to National Environmental Protection (Assessment of Site Contamination) Measures (NEPM) 2013, show that the TSF material to be covered represent neither a significant Health Limit risk nor a more general Environmental Limit risk that would necessitate even a preliminary stage (Tier 1) investigation for contaminated land;
(d)the Citigold approach to rehabilitation does consider engineering issues to the extent necessary to satisfy the EA;
(e)sufficient testing and reporting of waste rock has been undertaken to determine background geology;
(f) the TSF material is not ‘high risk’; and
(g)the waste rock material is not ‘high risk’ and that there is no evidence of acid drainage effects at the base of the waste rock dumps nor on plant growth.” (footnotes omitted)
Summary of Respondent’s Position
[17]The respondent has summarised its position as follows:[14]
[14] Respondent’s submissions, para [3].
“(1)The appeal is by way of rehearing, in the nature of a hearing de novo.
(2)The statutory intention is that the Appellant bears the legal or practical onus of persuading the Court that its financial assurance calculations should be imposed, in circumstances where:
(a)The EP Act places responsibility upon the applicant to provide a rehabilitation program and costings for that program, in the form of financial assurance calculations.
(b)It is the decision of the Respondent and not the Appellant which determines the amount and form of the financial assurance required for a plan of operations.
(c)Once made, the Respondent’s decision is operative and binds the Appellant unless and until it is substituted or set aside following an internal review or appeal. The orthodox legal convention that a party seeking to set aside a decision must prove its case applies.
(3) Alternatively, neither party bears the legal or practical onus.
(4) The legislative regime is as follows:
(a)Section 295 provides that the Court “must have regard to” the prescribed guideline and any regulatory requirements.
(b)The statutory intention is not that the guideline is strictly binding upon the Court. It is a matter which must be taken into consideration. However, in all the circumstances, it should be given significant weight.
(c)In circumstances where the hearing is a hearing de novo, version 3 of the guideline is the version to which the Court must have regard.
(d)Alternatively and in any event, section 295 does not prevent the Court from having regard to all relevant matters in making its decision, including version 2 and version 3 of the guideline.
(e)Other matters which the Court may have regard to as being relevant to the calculation of financial assurances include the regulatory requirements concerning environmental management decisions contained in the Environmental Protection Regulation 2008 (“the EP Regulation”), and the “precautionary principle”. However, the Court’s decision need not turn on consideration of either of those matters.
(5)In determining whether costs and expenses are “likely” to occur, the word “likely” should be interpreted as meaning a “real chance or possibility”, rather than “more probable or not”.
(6) The key issues in the appeal are:
(a)First, what infrastructure should be included or excluded from the calculations?
(b)Second, what rehabilitation requirements or assumptions should be relied upon to calculate the costs?
(7) In terms of the first issue:
(a)The waste rock dumps and tailing storage facility (“TSF”) are not infrastructure. They are not properly the subject of landowner agreements or statements. They should be included in the financial assurance calculations.
(b)The infrastructure on unallocated State land is not properly the subject of landowner agreements or statements. The infrastructure should be included in the financial assurance calculations.
(c)Neither the Respondent nor the Court are precluded from scrutinizing the landowner statements and agreements, and determining whether it is appropriate to give effect to them.
(d)In all of the circumstances, it is not appropriate that the infrastructure which is the subject of the landowner agreements and statements be excluded from the financial assurance calculations.
(e)Further, and alternatively, the landowner agreements and statements are inconsistent with the conditions of the Appellant’s environmental authority, including and in particular condition F1-1.
(8) In terms of the second issue:
(a)In light of Mr Towsey’s qualifications and expertise, his interests in Citigold and his duties to the company, and the opinions of Mr Thompson and Mr Anderson, the Court should give Mr Towsey’s evidence about his own rehabilitation designs and assumptions, and the resulting financial calculations, no or alternatively very little weight.
(b)The Appellant has not established that Mr Thompson has sufficient qualifications and expertise to give expert evidence concerning mining or metalliferous mining rehabilitation generally, or alternatively that he is qualified to give expert evidence about the risks and rehabilitation requirements concerning the waste rock dumps and TSF.
(c)If the Court determines that Mr Thompson is capable of giving expert evidence, it should be given little or no weight, and the evidence of Mr Anderson should be preferred.
(d)The Court should rely upon the rehabilitation requirements and assumptions adopted by Mr Anderson, and the financial assurance calculations he has prepared.
(e)The financial assurance should be calculated on the basis that rehabilitation of the TSF involves high risk material. Alternatively, the calculation should be made on the basis that the rehabilitation involves low risk material.
(f)The financial assurance should be calculated on the basis that rehabilitation of the waste rock dumps involves high risk material.
Alternatively, the calculation should be made on the basis that the rehabilitation involves low risk material.
(g)A contingency amount should be included in the financial assurance calculation.”
Chronology
[18]The parties have further assisted the Court by providing an agreed chronology as follows:
CHRONOLOGY
Date Event Source December
1996
The Tailings Storage Facility is constructed at the
Blackjack site
Exhibit 29 July 2003 Citigold prepares an Environment Management Overview Strategy for the Charters Towers Gold Project (Central) Blackjack Project and Warrior (Imperial) Project sites Exhibit 40
02.12.03 Citigold is granted an amended environmental authority for its mining activities at Charters Towers Exhibit 51
24.10.05 Citigold is granted an amended environmental authority for a non-code compliant level 1 mining project for its mining activities at Charters Towers Exhibit 47 at [9]
06.08.10 The Department issues Citigold with a notice to conduct or commission an environmental evaluation. Exhibit 31 page 8.
2011 Cheryl Low prepares an environmental report for Citigold in response to the Department’s notice to conduct or commission an environmental evaluation Exhibit 23
11.11.11 The Department issues Citigold with a notice to conduct or commission a further environmental evaluation Exhibit 31
2012 The Department commences an operational review which includes a review of the Department’s financial and following assurance guideline Exhibit 10 at [11]
09.04.13 Citigold lodges a replacement plan of operations (April 2013 – April 2015) with the Department Affidavit of Samuel Hedge affirmed 13 March 2015 at [8(f)] 01.05.13 The Department decides that the amount of financial assurance required for Citigold’s mining activity is $8,591,703.68 Affidavit of Samuel
Hedge affirmed 13
March 2015 at [8(g)]
10.05.13 Citigold applies for an internal review of the Department’s decision 23.05.13 The Department considers Citigold’s application for internal review and decides to reduce the financial assurance required to $8,067,379.71 Exhibit 47 at [16]; Affidavit of Samuel Hedge affirmed 13 March 2015 at [8(h)] 31.05.13 The Department’s guideline Financial assurance under the Environmental Protection Act 1994 (V1) is rescribed under the Environmental Protection Regulation 2008 (Qld) Exhibit 10 at [19]
05.07.13 Citigold appeals to the Land Court against the
Department’s review decision, resulting in appeal EPA194-13Affidavit of Mark Lynch affirmed 9 March 2016 at [4]; Affidavit of Samuel Hedge affirmed 13 March 2015 at [8(i)]; affidavit of Anne-Maree Kate Ireland affirmed 13 Marc 2013 at [5] 07.03.14 The Department’s guideline Financial assurance under the Environmental Protection Act 1994 (V2) is prescribed under the Environmental Protection Regulation 2008 (Qld) Exhibit 10 at [22]
April 2014 The Queensland Audit Office report “Environmental Regulation of the resources and waste industries” is tabled in the Legislative Assembly Exhibit 10 at exhibit JSWR01 18.08.14 The personal representatives of the estate of James
Joseph Lynch (Estate) apply to the Department of Natural Resources and Mines to purchase the unallocated state land on Lot 72 on Crown Plan SL48027 (USL)Exhibit 5 at [9]
29.08.14 Citigold prepares an environmental evaluation in response to the notice to conduct or commission such an evaluation issued by the Department on 11 November 2011
Exhibit 31
31.10.14 The personal representatives of the estate agree to retain the infrastructure used by Citigold for its mining activities on its land after the mining project ceases
Exhibit 5 at [21]
31.10.14 Citigold agrees to retain the infrastructure used for its mining activities on land its subsidiary controls after the mining project ceases Exhibit 5 at [22];
Exhibit 55 at [9]
31.10.14
Citigold lodges a replacement plan of operations
(October 2014 – October 2016) [Exhibit 6] with the Department (received by the Department on 6 November 2014)Exhibit 47 at [21]
31.10.14 Citigold seeks the consent of the Department to discontinue Land Court Appeal EPA194-13.
Affidavit of Anne-Maree Kate Ireland affirmed 13 March 2015 at [16] 27.11.14 The Department decides that the amount of financial
assurance required for Citigold’s mining activity is
$12,509,000Exhibit 2 at [22]
1.12.14 Citigold files a Notice of Discontinuance signed by the Department in appeal EPA194-13 on a condition that costs are paid to the Department
Affidavit of Anne-Maree Kate Ireland affirmed 13 March 2015 at 17 04.12.14 The Department sends a letter stating that the replacement plan of operations has been assessed and meets the content requirements under s 288 of the Environmental Protection Act 1994 (Qld), and that EHP has not approved Citigold’s proposed rehabilitation strategy. Exhibit 47 at [25]
Exhibit 9 at [20].
10.12.14 Citigold applies for an internal review of the Department’s decision
Exhibit 2 at [24]
22.01.15 The Department considers Citigold’s application for internal review and decides to confirm the financial assurance required is $12,509,000
Exhibit 2 at [27]
23.02.15 Citigold appeals to the Land Court against the
Department’s review decisionAffidavit of Samuel Hedge affirmed 13 March 2015 at
[8(p)]
05.03.15 Citigold applies for a stay of the Department’s decision pending the outcome of the appeal
Affidavit of Matthew Martin sworn 13 March 2015 at [2]
13.03.15 The Land Court orders that the Department’s decision be stayed until 31 December 2015 on condition that Citigold pays additional financial assurance in the form of cash or bank guarantee in the sum of $507,696
27.03.15 The Department writes to Citigold requesting further information in relation to the environmental evaluation it submitted on 29 August 2014Exhibit 41
14.04.15 The Estate receives a letter from DNRM enclosing an agreement to offer a deed of grant over the USL Exhibit 5 at [10]
15.04.15 The Department provides Citigold copies of its
assessment report and financial assurance calculationsExhibit 32 at [22]
22.04.15 The Department provides Citigold with the reasons for its review decision Exhibit 32 at [22]
11.05.15 The persona representatives of the estate advise DNRM that the conditions of the agreement to offer are acceptable but an extension of time is required to complete negotiations with the relevant native title holders regarding an ILUA Exhibit 5 at [13] 12.05.15 Citigold writes to the Department in relation to its request for further information about its environmental evaluation Exhibit 43
13.05.15 DNRM confirms the personal representatives of the estate have an extension of time to negotiate and registeran ILUA with the native title holders Exhibit 5 at [15]
27.09.15 Peter Anthony Lynch registers the business name
“Queensland Gravel”Exhibit 42
18.11.15 The Charters Towers Regional Council advises the
Estate that it supports, in principle, the proposal to
expand the existing gravel business on the siteExhibit 32 at [14] – [15]
18.11.15 The Charters Towers Regional Council advises Citigold that it supports, in principle, the development of an underground mine tour experience as a post-mining land use
Exhibit 32 at [16] – [17]
25.11.15 DNRM grants the personal representatives of the estate an extension of time to negotiate and register an ILUA with the native title holders Exhibit 32 at [8]
16.12.15 The Land Court orders that the Department’s decision be stayed until 29 February 2016 28.01.16 Citigold enters into an amended infrastructure agreement with the personal representatives of the estate about the retention of infrastructure after the mining project ceases Exhibit 32 at [10]
18.02.16 The Land Court orders that the Department’s decision be stayed until 11 March 2016 04.03.16 The Department’s guideline Financial assurance under the Environmental Protection Act 1994 (V3) is prescribed under the Environmental Protection Regulation 2008 (Qld) Affidavit of Thomas Ambrose affirmed 9 March 2016 at [6] 06.03.16 Citigold enters into infrastructure agreement with
Charters Towers Gold Pty Ltd about the retention of infrastructure after the mining project ceasesExhibit 55 at [13]
10.03.16 The Land Court orders that the Department’s decision be stayed until the delivery of the decision on Citigold’s application dated 1 March 2016 The Hearing
[19]The hearing began in Brisbane on 7 December 2015 and was scheduled for a week, including two days of inspection on site in Charters Towers on 8 and 9 December 2015. The inspections were held as planned, but unfortunately the parties’ estimates of time required for the hearing were well under what was actually needed. The hearing continued in Brisbane from 10-16 December 2015, and again resumed in Brisbane on 3 February 2016 and continued on 4, 5, 6, 18 and 19 February.
[20]It appeared that evidence in the matter had concluded on 19 February and a timetable was set for written and oral submissions. However, on 4 March 2016 Financial Assurance Guideline 3[15] was gazetted. This resulted in an application by Citigold to reopen the hearing. The application was granted. The facts and circumstances surrounding the reopening, and the reason for granting the reopening, are fully set out in my decision of 10 March 2016.[16]
[15] Exhibit 69, also known as ESR/2015/1758.
[16]Citigold Corporation Limited v Chief Executive, Department of Environment and Heritage Protection (No. 3) [2016] QLC 21.
[21]Due to very heavy court commitments that I had already set down, it was not possible to resume the hearing until 12 September 2016.[17] On 16 September the parties again closed their cases and a timetable was set for the provision of written submissions, with oral submissions subsequently heard on 24 and 27 October. Unfortunately, both parties were considerably late with their written submissions, which has severely impacted on the Court’s ability to deliver a decision urgently by 31 October 2016, as stressed as being necessary by both parties (see heading Urgency below).
[17]Unfortunately, the transcript for the resumed hearing reverted back to day 1 etc. To save confusion, transcript from the resumed hearing will be referred to as TR (meaning transcript resumed) followed by day and page reference.
[22]Citigold was represented throughout the hearing by Ms KJ McIntyre of Counsel, instructed by Holding Redlich Lawyers. The respondent was represented throughout by Mr J.T. Dillon of Counsel, instructed by the Litigation Unit of the respondent.
[23]Citigold relied on affidavit and oral lay evidence of Mr M Lynch and Mr Towsey. Citigold also relied on the expert evidence of Mr Thompson.
[24]The respondent relied on the lay evidence of Ms Reupena (affidavit and evidence in chief only) and Ms Minnesma, who provided affidavit and oral evidence, and also relied on the expert evidence of Mr Anderson.
[25]To the extent that it is necessary, given the available time in light of the stated urgency, I will assess the evidence of each witness later in these reasons.
[26]In reaching my decision in this matter, I have considered and taken into account all of the evidence and submissions of the parties. Particularly in light of the stated urgency, this decision sets out the salient points, but not all the evidence and submissions that I have taken into account. Further, as advised to the parties, I have relied extensively on the written submissions of the parties in the preparation of this decision.
Urgency
[27]As the chronology shows, this is the second Plan of Operations by Citigold which has resulted in an appeal to this Court regarding the question of Financial Assurance payable. Primarily, as I understand it, because of the lodgement of the current Plan of Operations, the first Land Court appeal was discontinued on 1 December 2014.
[28]Citigold lodged its current Plan of Operations[18] on 31 October 2014. It expires on 31 October 2016. In short, Citigold is required to lodge a new Plan of Operations to take effect once the existing Plan of Operation expires. A new Plan of Operations will require Citigold to submit what it says should be the amount of Financial Assurance for the new Plan, which will then be considered by the respondent.
[18] Exhibit 6.
[29]Potentially, in a relatively short period of time, there may be yet another decision, then another review decision, by the respondent, and appeal by Citigold. If the current matter is not resolved urgently, it would appear a virtual certainty that such potentiality will occur, given the great distance between the parties on their respective views as to the proper determination of Financial Assurance, and the evidence that the project is currently in a care and maintenance phase, leading to the likelihood that a Plan of Operations at least similar to Ex 6 will soon be lodged.
[30]The concern has been expressed that the lodgement of a new Plan of Operations and any subsequent appeal may render the lengthy hearing already conducted in effect nugatory. Although I have some doubt that such circumstances would result in a decision in the current matter being of no value; worthless; inoperative; useless; or futile,[19] I agree with the parties that the interests of not only justice generally, but the parties in particular, warrant this Court going to rather extraordinary lengths to deliver this decision by 31 October 2016 to overcome any possibility of all the work and costs which have been expended in this matter ultimately proving in vain.
[19]See definition of Nugatory, New Shorter Oxford English Dictionary, Volume 2, Clarendon Press, Oxford, 1993.
[31]Further, I note in particular the provision of s 289(6) of the Environmental Protection Act 1994 (the EP Act) which states as follows:
“The original plan ceases to apply if it is replaced.”
[32]While it is clear that s 289(6) only applies to circumstances where there is already a Plan of Operations in existence and the period of that Plan has not ended,[20] s 287 makes it clear that the Environmental Authority (EA) holder must not carry out an activity under its mining lease/s without giving the respondent a Plan of Operations. It would seem that the intent of the EP Act in this respect is clear: unless the EA holder intends to cancel the mining leases at the end of the term of a Plan of Operations, an EA holder is required to submit a new Plan of Operations prior to the existing plan expiring. Although not subject to any submissions by the parties, the Citigold project even as it is currently in care and maintenance would likely fall within the definition of mining under the Mineral Resources Act 1989 (MRA) and activity as used in s 287 of the EP Act.
[20] Section 289(1) of the EP Act.
[33]My closing comment on urgency is this. Normally, a matter of this complexity and importance would not only warrant additional time for research, reflection and drafting, but time for extensive review once drafted. None of this is possible to anywhere near the extent I would like before 31 October 2016. This decision simply represents the best I could do in the very short time available working long hours day and night.
The Relevant Legislation
[34]As this is the first decision of the Land Court relating to the quantum of Financial Assurance payable, it is appropriate to set out the legislative requirements.
[35]The starting point for this appeal goes back to two core documents; Citigold’s EA and its current Plan of Operations. The importance of the Plan of Operations was shown during the cross-examination of Ms Minnesma:[21]
[21] T 9-79 lines 28-38.
“And you would agree that the EA holder has a positive obligation to comply with its plan of operations?‑‑‑Correct.
And a plan of operations is really a vehicle through which the mining company tells the department what it’s doing, when it’s going to do certain activities, how it proposes to comply with its EA – sorry, do you agree with that so far?‑‑‑Yes, I do.
Yes. Okay – how it proposes to rehabilitate after the cessation of mining?‑‑‑Correct.
And how much it thinks it will cost to rehabilitate the land in accordance with conditions of the EA?‑‑‑Correct.”
[36]Section 288 of the EP Act provides as follows:
288 Requirements for plan of operations
(1) A plan of operations must—
(a) describe the following—
(i) each relevant lease for the environmental authority;
(ii) the land to which each relevant lease applies;
(iii) the land to which the plan applies; and
(b)state the period to which the plan applies (the plan period); and
(c) include the following—
(i)a plan showing where all activities are to be carried out on the land;
(ii)an action program for complying with the conditions of the environmental authority;
(iii)are habilitation program for land disturbed or proposed to be disturbed under each relevant lease;
(iv)another matter prescribed under an environmental protection policy or a regulation; and
(d) be accompanied by a compliance statement for the plan; and
(e) be accompanied by the fee prescribed under a regulation.
(2)A rehabilitation program under subsection (1)(c)(iii) must state a proposed amount of financial assurance for the environmental authority for the plan period.
(3) A compliance statement under subsection (1)(d) must—
(a) be made by or for the environmental authority holder; and
(b)state the extent to which the plan complies with the conditions of the environmental authority; and
(c)state whether or not the amount of the financial assurance for the environmental authority has been calculated in accordance with the guideline under section 295(3)(b).
(4) The plan period can not be more than 5 years.
(5) A plan of operations may relate to 1 or more relevant leases.
[37]For the purposes of this appeal, an important consideration is s 288(2). In short, Citigold’s Plan of Operations is required to include a rehabilitation program, and the rehabilitation program must state Citigold’s proposed amount of Financial Assurance for the EA.
[38]In this regard, the Plan of Operations has this to say:[22]
[22] Exhibit 6, p 94.
“10.0 FINACIAL ASSURANCE CALCULATION
The total financial assurance of the Project is $587,000 (refer to Appendix D).
The existing financial assurance lodged with the administering authority is $492,304.”
[39]Citigold still contends that the Financial Assurance should be in the sum of $587,000.00.[23] In the alterative, Citigold says that the Financial Assurance should be as calculated by Mr Thompson in his WPT 1 as set out in Exhibit 68, including additional concessions made during the hearing.[24]
[23] Citigold’s submissions, para [544].
[24] Citigold’s submissions, para [545].
[40]To remove any doubt as to the applicability of a Financial Assurance to Citigold’s operations, the current EA provides as follows:[25]
[25] Exhibit 47 CAT-02, p 2.
“Schedule A – General
Financial Assurance
(A1-1) Provide a financial assurance in the amount and form required by the administering authority prior to the commencement of activities proposed under this environmental authority.
NOTE: The calculation of financial assurance for condition (A1-1) must be in accordance with Guideline 17 and may include a performance discount. The amount is defined as the maximum total rehabilitation cost for complete rehabilitation of all disturbed areas, which may vary on an annual basis due to progressive rehabilitation. The amount required for the financial assurance must be the highest Total Rehabilitation Cost calculated for any year of the Plan of Operations and calculated using the formula: (Financial Assurance = Highest Total Annual Rehabilitation Cost x Percentage Required)
(A1·2) The financial assurance is to remain in force until the administering authority is satisfied that no claim on the assurance is likely.
NOTE: Where progressive rehabilitation is completed and acceptable to the administering authority, progressive reductions to the amount of financial assurance will be applicable where rehabilitation has been completed in accordance with the acceptance criteria defined within this environmental authority.”
[41]Conditions A1-1 is consistent with s 292 of the EP Act, which provides as follows:
292 Requirement to give financial assurance for environmental authority
(1)The administering authority may, by condition of an environmental authority, require the holder of the environmental authority to give the administering authority financial assurance—
(a)before the relevant activity is carried out under the environmental authority; and
(b) as security for—
(i) compliance with the environmental authority; and
(ii)costs or expenses, or likely costs or expenses, mentioned in section 298.
(2)However, the administering authority may impose a condition requiring a financial assurance to be given only if it is satisfied the condition is justified having regard to—
(a)the degree of risk of environmental harm being caused, or that might reasonably be expected to be caused, by the relevant activity; and
(b)the likelihood of action being required to rehabilitate or restore and protect the environment because of environmental harm being caused by the activity; and
(c) the environmental record of the holder.
(3) The administering authority may require a financial assurance to remain in force until it is satisfied no claim is likely to be made on the assurance.
The next section of the EP Act relevant to this matter is s 295 which deals with the respondent deciding the amount and form of Financial Assurance. Section 295 provides as follows:
295 Deciding amount and form of financial assurance
(1)The administering authority must decide the amount and form of financial assurance required under a condition of an environmental authority.
(2) The decision must be made within—
(a)if an application is made under section 294(2)—10 business days after the application is received; or
(b)if the decision relates to an environmental authority for which a plan of operations is required under section 287—15 business days after the plan of operations is received; or
(c)the further period agreed between the holder of the environmental authority and the administering authority.
(3)In making the decision, the administering authority must have regard to—
(a) any relevant regulatory requirements; and
(b)any criteria stated in a guideline made by the chief executive and prescribed under a regulation.
(4)Despite subsections (1) and (3), the administering authority can not require financial assurance of an amount more than the amount that, in the authority’s opinion, represents the total of likely costs and expenses that may be incurred taking action to rehabilitate or restore and protect the environment because of environmental harm that may be caused by the activity.
(5) In this section—
costs and expenses includes monitoring and maintenance costs and expenses.
[43]Where an EA holder is dissatisfied with a decision about the amount and form of financial assurance required under its authority, it may apply for a review of the decision.[26]
[26] Sections 520 (1)(d), 521(1) and Schedule 2 of the EP Act.
[44]The review application must be:[27]
(a)made in the approved form to the Respondent within 10 business days after the day on which the environmental authority holder receives notice of the decision; and
(b)supported by enough information to enable the authority to decide the application.
[27] Section 521(2) of the EP Act.
[45]Section 521(2) of the EP Act provides that within 10-15 business days (depending on whether a submission is received within the submission period) the respondent must:
(a)review the decision it made in respect of the amount and form of financial assurance;
(b) consider any submissions properly made by a recipient of the review notice; and
(c) make a decision to:
(i) confirm or revoke the decision; or
(ii)vary the decision in a way that the administering authority considers appropriate.
[46]The respondent must give written notice of the decision to the EA holder within 10 business days after making the review decision.[28] The notice must include the reasons for the review decision and inform the EA holder of its right of appeal against the decision.[29]
[28] Sections 521(7) of the EP Act.
[29] Sections 521(9) of the EP Act.
[47]The provisions relating to review decisions which are subject to Land Court appeals are set out in Subdivision 1, Division 3, Part 3, Chapter 11 of the EP Act.
[48]A person dissatisfied with a decision listed in Part 1, Schedule 2 of the EP Act may, pursuant to s 524 of the EP Act, appeal against the decision to the Land Court.
[49]Pursuant to s 527 of the EP Act, the appeal is by way of rehearing, unaffected by the review decision. Section 528 then goes on to state that, in deciding the appeal, the Land Court has the same powers as the administering authority, that is, the respondent.
[50]It is common ground between Citigold and the respondent that, when ss 527, 528 and 530 are read together, the appeal is by way of hearing de novo.
[51]Section 530 of the EP Act provides as follows:
530 Decision for appeals
(1) In deciding the appeal, the Land Court may—
(a) confirm the decision; or
(b) set aside the decision and substitute another decision; or
(c)set aside the decision and return the matter to the administering authority who made the decision, with directions the Land Court considers appropriate.
(2)In setting aside or substituting the decision, the Land Court has the same powers as the authority unless otherwise expressly stated.
(3) However, this part does not apply to a power exercised under subsection (2).
(4)If the Land Court substitutes another decision, the substituted decision is taken for this Act, other than this subdivision, to be the authority’s decision.
[52]It follows, therefore, that the Land Court on making its decision must refer back to s 295 of the EP Act and, in particular, s 295(3). That is, the Land Court must have regard to any relevant regulatory requirements, and any criteria stated in a guideline made by the respondent and prescribed under a regulation.
[53]Regulation 17B of the Environmental Protection Regulation 2008 (EP Regulation) provides as follows:
Division 2A Amount and form of financial assurance for environmental authorities
17B Guideline prescribed—Act, ss 294 and 295
For sections 294(3)(b)(ii) and 295(3)(b) of the Act, the guideline called ‘Financial Assurance under the Environmental Protection Act 1994’ is prescribed.
Editor’s note—
The guideline may be accessed on the department’s website at < the time of lodging the appeal, the guideline applicable was known as Guideline 2[30] which was prescribed and took effect on 7 March 2014.[31] As already set out in this decision, Guideline 3[32] came into effect on 4 March 2016 and resulted in the reopening of the appeal.
[30] Exhibit 26, also known as EM 1010.
[31] Exhibit 10, para [22].
[32] Exhibit 69.
[55]Guidelines 2 and 3 set out similar ways of calculating financial assurance. Guideline 3 has this to say:[33]
[33] Ibid, pp 8-9.
“(iii) Calculating financial assurance
For small scale mining activities, the EP Regulation prescribes the amount of FA required.
Certain other mining activities (mining claims, exploration permits and mineral development licences) are authorised with standard conditions and eligibility criteria under the EP Act. The relevant publications are prescribed under the EP Regulation and outline how the FA is to be calculated. These are:
· Code of environmental compliance for exploration and mineral development projects (EM586)
· Code of environmental compliance for mining claims and prospecting permits (EM587)
For all other activities requiring a decision on the amount and form of financial assurance (regardless of whether they have submitted via a plan of operations or gone via an application process), the approved calculation method is outlined in Appendix A. In summary this method involves:
· Step 1: Calculate total (i.e. 100%) rehabilitation liability with respect to significantly disturbed land. The total rehabilitation liability must first be calculated for the EA, for all significantly disturbed land, as per Appendix A.
· Step 2: If applicable, apply a discount. In recognition of the low incidence of non-compliance, low risk of default, and good environmental performance/lower risk of environmental harm by some operators, the department has adopted a discount system so that operators may reduce the amount of FA payable, to an amount below 100% rehabilitation liability for significantly disturbed land. Access to the discount is subject to mandatory pre-requisites and the amount of discount attainable is based on a number of criteria (e.g. sound financial health, measures undertaken to reduce rehabilitation liability/risk of environmental harm etc.). These are listed in Appendix B.
· Step 3: Calculate proposed FA. The final FA can be calculated by subtracting the discount amount from the 100% rehabilitation liability amount.”
[56]It is to be noted that the Guideline quoted above refers to Appendix A, which makes reference to what has been referred to throughout the hearing as “the calculator”. Appendix A of Guideline 3 relevantly provides as follows:
“Appendix A – Approved calculation method
The following methodology applies to mining leases, other non-mining resource activities and prescribed environmentally relevant activities (e.g. landfills, quarries).
The department has developed a mining and a petroleum and gas FA calculator to help facilitate consistency in calculating FA. The calculators can be downloaded from the Queensland Government Business and Industry Portal at
EA holders who calculate their FA using the departmental FA calculator will find that the assessment of their FA application is significantly streamlined.
EA holders that do not calculate their FA using the departmental FA calculator can still achieve a streamlined assessment of their FA if they have previously had their calculator recognised by the department. Industry calculators can achieve recognition if they follow the recognition process outlined below in Part 2.
All other industry calculations will undergo a complete assessment which may include the department comparing the industry calculation of FA against the departmental calculator values.
Regardless of which type of calculator is used, all FA calculations must follow the steps outlined in Part 1 below.
Part 1: Criteria for Calculating Financial Assurance
Step 1: Calculate 100% rehabilitation liability
The total rehabilitation liability reflects the total potential costs to rehabilitate significantly disturbed land, in a way that will ensure compliance with environmental conditions of the EA. The total rehabilitation liability must:
· be calculated on a project basis (i.e. may cover several activities on one or more resource authorities)
· be calculated for all land that has been or is proposed to be significantly disturbed
· be based on the rehabilitation costs for the year in which the maximum liability is incurred within the nominated disturbance period[34]
· costs must be a site-specific independently certified, third party quote or a contracted rate to undertake the full extent of work necessary to meet all EA conditions including the following activities:
(a)decommission and remove all infrastructure and terminate all services[35]
(b)constituent tasks or activities required for rehabilitation
(c)project management costs[36] (10% of the total rehabilitation liability is recommended). [37]
(d)maintenance and monitoring.[38] It is recommended that 5% of the total rehabilitation liability be added to account for maintenance and monitoring costs. In some circumstances it may be appropriate to determine actual maintenance and monitoring costs rather than applying 5%. An example is where maintenance and monitoring costs are likely to account for more than 5% of the total rehabilitation liability for the site, for instance where rehabilitation on a site has been substantially completed, but not progressively certified,[39]
(e)if the project produces hazardous contaminants or includes notifiable activities (in relation to contaminated land), the cost of completing a site investigation report to verify that the conditions of the environmental authority have been met
[34]The disturbance period provides for a regular review in recognition of the variable nature of disturbance (e.g. due to activities expanding or being progressive rehabilitated) and the subsequent rehabilitation liability. If this period is less than 1 year, FA should be calculated based on the maximum rehabilitation liability within the nominated disturbance period.
[35]Guideline footnote 6. Note: Some costs may not need to be included for certain suitable infrastructure if the EA holder can provide a written agreement (between the EA holder and the land owner) or a statement (if the EA holder is the underlying landowner) that the infrastructure can remain onsite and can demonstrate that the retention of the infrastructure is consistent with achieving the general rehabilitation goals of a site that is safe to humans and wildlife, non-polluting, and stable. Examples of suitable infrastructure include bores, clean water dams and access roads. This does not negate the need to obtain any other authorisations as required under the EP Act or other legislation.
[36]Guideline footnote 7. This reflects the costs to government to project manage, schedule or oversee the required works.
[37]Guideline footnote 8. The EA holder may nominate an alternative amount for these components (or variable amounts across each itemised activity). If the non-recommend value is used, quotes must then be attached with the application/information supplied to the department.
[38]Guideline footnote 9. This reflects the cost to government to do ongoing monitoring and maintenance required of rehabilitation works.
[39]Progressive certification is a process outlined under s 318Z of the Environmental Protection Act 1994 and allows the holder of an environmental authority to demonstrate that they have met all rehabilitation obligations. A certified rehabilitated area does not require financial assurance.
The total rehabilitation liability does not:
· need to be calculated for disturbance authorised under an EA if FA has already been given under the same or another EA and where there is colocation of infrastructure resulting in no change to the rehabilitation activities or disturbance.
· need to include rehabilitated areas certified under section 318Z of the Environmental Protection Act 1994.
· include the costs of responding to an incident (e.g. a spill or accidental release to waters that has downstream impacts).
The total rehabilitation liability must not:
· assume that the liability can be reduced or offset by deducting the value of on-site infrastructure or other assets (including scrap metal). This does not satisfy the requirements for an acceptable form of FA (which must be unconditional; immediately payable on demand and payable without reference to another person and available until all obligations have been performed). The department does not accept this method due to risks and uncertainty associated with the department’s ability to inherit and on-sell these assets and commercial factors (i.e. depreciation and saleability) which could affect the value of the item.
Step 2: If applicable, apply the discount and then calculate proposed FA
In recognition of the low incidence of non-compliance, low risk of default, and good environmental performance/lower risk of environmental harm by some operators, the department has adopted a discount system so that operators may reduce the amount of FA payable, to an amount below 100% rehabilitation liability for significantly disturbed land. Access to the discount is subject to mandatory pre-requisites and the amount of discount attainable is based on a number of criteria (e.g. financial stability, measures undertaken to reduce rehabilitation liability/risk of environmental harm etc.). The maximum allowable discount is 30%. The criteria are listed in Appendix B.
Step 3: Calculate proposed FA
The final FA can be calculated by subtracting the discount amount from the 100% rehabilitation liability amount…”
[57]There are relevant differences between Guideline 2 and Guideline 3 as I set out in my decision in Citigold (No. 3).
[58]There is little or no remaining dispute between the parties as to the applicability of Guideline 3 and, for that matter, Guideline 2 to the Court’s determination of this matter.
[59]The respondent submits that s 295 of the EP Act permits the Court to also have regard to the respondent’s Guideline Resource Activities Rehabilitation Requirements for Mining Resource Activities[40] (Rehabilitation Guideline), the EP Regulation, and the Precautionary Principle.
[40] Exhibit 20, also known as EM 1122.
[60]Citigold does not agree that the Rehabilitation Guideline, EP Regulation and Precautionary Principle require further consideration. The respondent conceded that this Court’s decision does not turn on further consideration of the EP Regulation or the Precautionary Principle.[41]
[41] Respondent’s submissions, para [63].
[61]As regards the Rehabilitation Guideline the respondent maintains that it should be taken into account given the facts of this case.[42] Citigold strongly submits that the Rehabilitation Guideline is not relevant to this appeal.
[42] Respondent’s submissions, para [61].
[62]Citigold submits that the Rehabilitation Guideline:
(a)does not constitute a ‘relevant regulatory requirement’ for the purposes of s 295(3)(a) of the EP Act;
(b)is not a Prescribed Guideline in accordance with s 295(3)(b) of the EP Act;
(c)is only relevant to the calculation of financial assurance where the environmental authority holder is seeking a ‘discount’ under the Prescribed Guideline [Exhibit 26 or 69]; and
(d)otherwise is not a guideline to which the Court ought have regard.
[63]Citigold accepts that the respondent may make guidelines for the administering authority inter alia about:
(a)how it complies with regulatory requirements (Compliance Guideline);[43] and
(b)to inform persons about matters it considers appropriate for the administration of the EP Act (Information Guideline).[44]
[43] Section 548(1)(a) of the EP Act.
[44] Section 549(1)(d) of the EP Act.
[64]Any such guideline must be notified in the gazette [45] and the Department must follow the relevant guideline.[46] Not all such guidelines are prescribed under regulation and apply to the assessment of financial assurance. The Rehabilitation Guideline is not prescribed under the EP Regulation in respect of s 295 of the EP Act and decisions on the amount and form of financial assurance.
[45] Sections 548(4) and 549(3) of the EP Act.
[46] Section 548 (2) of the EP Act.
[65]The Rehabilitation Guideline is described as a guideline:[47]
“provides information on both progressive and final rehabilitation requirements for site specific resource projects operating in Queensland under the Environmental Protection Act 1994.”
[47] Exhibit 20, p 1.
[66]Section 1.1 states the purpose of the Rehabilitation Guideline as being:[48]
“This guideline is to assist mining companies to propose acceptable rehabilitation outcomes and strategies during the planning stages of a mine or when changes to the proposed rehabilitation outcomes and strategies become necessary during the operational stages of a mine.
The guideline also explains how the administering authority will assess whether progressive or final rehabilitation for either new or established mining projects is satisfactory…”
[48] Ibid p 3.
[67]Section 1.4 of the Rehabilitation Guideline provides as follows:[49]
“1.4 Other relevant guidelines
The following guidelines should also be consulted:
Triggers for environmental impact statements under the Environmental Protection Act 1994 for mining, petroleum and gas activities (EM1128)
Financial assurance under the Environmental Protection Act 1994 (EM1010).”
[49] Ibid p 4.
[68]To the extent that the Respondent submits that the Rehabilitation Guideline ought be considered as part of the Prescribed Guideline criteria, namely as being any relevant standards or rehabilitation requirements such as conditions of the EA,[50] it is submitted that the Rehabilitation Guideline is only relevant (and should only be consulted) where the environmental authority holder is seeking to reduce the amount of financial assurance payable by applying one of the three discounts contained in Appendix B.[51]
[50] Exhibit 26, at p 9 and Exhibit 69, at p 10.
[51] Exhibit 26, at p 26 and Exhibit 69, at p 27.
[69]In this respect, Appendix A, Part 1, Step 2 of the Prescribed Guideline outlines when a discount may be sought. In order to be eligible to claim a discount, the mandatory pre-requisites (table 1) must first be satisfied. Appendix B of the Prescribed Guideline outlines the discount system by which an EA holder can seek a discount on their FA, it provides:[52]
[52] Exhibit 69, p 28.
“2. Discount system for all other activities
A discount will apply to the gross FA liability for an EA, where the EA holder can demonstrate that it meets all mandatory pre-requisites (listed in Table 1 below) and the discount criteria (outlined in Tables 2-4 below) which are relevant to the discount they are applying for.
…
Mandatory Pre-requisites
The mandatory pre-requisites outlined in Table 1 are benchmarks that each EA must meet in order to apply for any subsequent discounts.
Discounts
There are 3 discount categories and an EA holder may choose any discount to apply for, however the maximum discount that can be awarded is 30%. The following explains the purpose of awarding discounts under each category:
1. Financial (Table 2): …
2. Progressive rehabilitation and certification (Table 3): This discount category provides a discount to EA holders that avoid impacting areas of remnant vegetation or where areas of significant disturbance are being proactively rehabilitated or revegetated.
3. Waste management (Table 4): …”
[70]Of relevance to the application of the Rehabilitation Guideline is a discount for progressive rehabilitation and certification (table 3) which is divided into four subcategories:
(a)a 10% discount for avoiding any impacts to remnant vegetation (Avoidance);
(b)a 10% discount for undertaking proactive rehabilitation work to reduce the total area of disturbance (irrespective of the final land use) (Stabilisation);
(c)a 10% discount for undertaking proactive revegetation of a wood regional ecosystem (Restoration); and
(d)a 10% discount for progressive certification (Certification).
[71]The information and criteria contained in table 3 makes it clear that the Rehabilitation Guideline would be relevant in deciding whether or not a discount for progressive rehabilitation and certification can be granted and applied to the decision on the amount of FA.
[72]Citigold has not sought a discount in accordance with Appendix B of the Prescribed Guideline. Accordingly, it would seem that the Rehabilitation Guideline is irrelevant to deciding the amount of Financial Assurance in the present proceedings.
[73]Citigold submits that the Court cannot be satisfied that the Rehabilitation Guideline is a guide to which it must have regard because:
(a)Citigold is the holder of the EA;
(b)the EA contains rehabilitation objectives and outcomes;
(c)the Rehabilitation Guideline does not apply to the preparation of the Plan of Operations;
(d)the Rehabilitation Program contained in the Plan of Operations is not a ‘progressive’[53] or ‘final’[54] rehabilitation report;
(e)the Rehabilitation Program contained in the Plan of Operations complies with the EA conditions;
(f)the Rehabilitation Guideline is not a guideline prescribed under regulation pursuant to s 295(3)(b) of the EP Act;
(g)Citigold has not sought a discount of its financial assurance in accordance with Appendix B of Guideline 2; and
(h)Citigold has not sought certification of progressive rehabilitation under s 318Z of the EP Act.
[53] Chapter 5A, Part 6 of the EP Act.
[54] Chapter 5, Part 10 of the EP Act.
[74]Citigold submits in the alternative, that if it is the case that the Rehabilitation Guideline is applicable, then it would only be relevant in circumstances where the administering authority (or, on appeal, the Court) was also required to decide whether or not the rehabilitation program proposed in the Plan of Operations by Citigold was appropriate and, if not, impose its own rehabilitation program on the holder.
[75]Citigold submits,[55] and as confirmed by Ms Minnesma for the respondent,[56] that it is not for the Respondent (or, on appeal, the Court) to impose its own rehabilitation program on an EA holder when making a decision under s 295 of the EP Act.
[55] Submissions at [111]-[122].
[56] T 9-88 line 2.
[76]Citigold argues that it follows that where an EA holder has sought to reduce the amount of financial assurance required as a condition of its environmental authority, as in the present case, the Rehabilitation Guideline is irrelevant to deciding the amount of financial assurance payable, and that any other interpretation would give the Respondent carte blanche in respect of the matters it can have regard to in making its decision, a result that was clearly not the intention of the legislature.
[77]Further in the alternative, Citigold submits that the Rehabilitation Guideline clearly distinguishes between policy objectives for rehabilitation, called rehabilitation goals, and rehabilitation objectives selected by mining companies in their rehabilitation strategies linked to the application stage for an environmental authority and the environmental impact statement (EIS) process.[57]
[57] Exhibit 20, at pp 8-10.
[78]Table 1 of the Rehabilitation Guideline outlines possible strategies to achieve rehabilitation goals for various domains.[58]
[58] Exhibit 20, at p 13.
[79]Section 8 of the Rehabilitation Guideline identifies how existing mines ought be dealt with. Namely, it refers to rehabilitation having already been completed and being evaluated against the rehabilitation requirements that were in place for the mining project at the time the rehabilitation was completed. This section also refers to mining projects having prepared an EMOS which will have identified at least one rehabilitation objective (typically low intensity grazing).[59]
[59] Exhibit 20 at p 22.
[80]Section 2.2 identifies the rehabilitation hierarchy in the following terms:
“In assessing the acceptability of rehabilitation objectives, indicators and completion criteria that may be proposed for a mining project, the administering authority will have regard to a hierarchy for mine rehabilitation that is similar to the waste hierarchy. The strategies listed higher in the hierarchy should be adopted in preference to those listed lower, unless there are significant environmental, economic or social issues that override such a selection. The rehabilitation hierarchy, in order of decreasing capacity to prevent or minimise environmental harm, is:
1. avoid disturbance that will require rehabilitation
2. reinstate a “natural” ecosystem as similar as possible to the original ecosystem
3. develop an alternative outcome with a higher economic value than the previous land use
4. reinstate previous land use (e.g. grazing or cropping)
5. develop lower value land use
6.leave the site in an unusable condition or with a potential to generate future pollution or adversely affect environmental values.”
[81]In my view Citigold’s proposal to retain the infrastructure the subject of MJL-46 and MJL-59 is consistent with the hierarchy point 3 and indeed, because it is higher in the list than reinstatement to previous land use (point 4) it should be preferred. I note that Mr Anderson supports this position.[60]
[60] T 3-34 line 25.
[82]Before leaving this analysis of the relevant legislation, regulations and guidelines, reference should also be made to the meaning of the term “must have regard to” in s 295(3) of the EP Act.
[83]The respondent submits[61] that s 295 provides that the respondent (and on appeal the Court) “must have regard to” relevant regulatory requirements and the Prescribed Guideline (s 295(3)), and that the amount of the financial assurance must not be more than the total of the likely costs and expenses that may be incurred, and further that, while the Court is required to have regard to relevant regulatory requirements and the Prescribed Guideline, the statutory intention is not that the guideline is strictly binding upon the Court. Rather that it is a matter which must be taken into consideration: see Origin Energy Electricity Ltd v Queensland Competition Authority.[62]
[61] Respondent’s submissions, paras [51]-[53].
[62] [2014] 1 Qd R 216, paras [79]-[100].
[84]In light of the importance of financial assurances, the otherwise limited statutory guidance provided, and the paucity of other information upon which to base the financial calculations, the Respondent submits that the Court should give significant weight to the guideline and the accompanying financial assurance calculator.
[85]The Respondent contends that the emphasis is on the word “regard” as opposed to the phrase “must have regard”. In this respect, the Counsel for the Respondent submitted:
“What the respondent must do is make a decision about the amount and form of the financial assurance and that’s set out at section 295 and, in particular, section 295 subsection (1)(b) – sorry, (2)(b).[63]
…
The relevant considerations are, in making the decision regard must be had to relevant regulatory requirements and for the guideline and regard only is the submission of the department.”[64]
[63] T 1-14 line 25.
[64] T 1-14 line 45.
[86]In my view, it is not sufficient for the respondent, or the Court, to merely consider the Prescribed Guideline in a cursory way. Rather the words “must have regard to” contained in s 295(3) of the EP Act represent mandatory language which requires consideration that must involve an active, intellectual process. The phrase has been judicially considered on a number of occasions.
[87]In Garbler v Redland Shire Council[65] Robin J noted:
“‘Must have regard to’ represents mandatory language, as compared with weaker expressions such as ‘may have regard to’ or even ‘having regard to’ (considered in Biggs v. City of Mount Gambier (1981) 49 LGRA 177). The expression indicates to my mind that some (but not necessarily decisive) weight must be given to the State planning policy which (perhaps significantly) is honoured as the only policy requiring to be considered, in contrast with other statutory provisions which may list numerous factors, often topping them off with reference to ‘any other relevant circumstance’ (as in s.9(2)(p)) in the Penalties and Sentences Act 1992).”
[65] [2001] QPEC 028 at [32].
[88]Where a factor is a fundamental matter for consideration, the process of consideration must involve “an active intellectual process” directed at the nominated subject matter.[66] Where a decision-maker must consider matters prescribed by law, generally, he or she cannot jettison or ignore some of those factors or give them cursory consideration only in order to put them to one side.[67] A mere assertion of consideration will not be conclusive if it is demonstrated that regard has not been had to such matters in any real sense.[68]
[66]Tickner v Chapman (1995) 57 FCR 451 at 462; Telstra Corporation Ltd v Australian Competition and Consumer Commission (2008) 176 FCR 153 at 181-183.
[67]East Australian Pipeline Pty Ltd v Australian Competition and Consumer Commission (2007) 233 CLR 229 at 244 [52].
[68] Turner v Minister for Immigration and Ethnic Affairs (1981) 35 ALR 388 at 392.
[89]In R v Hunt; Ex Parte Sean Investments Pty Ltd[69] the Commonwealth Minister for Health was required to ‘have regard to’ a number of factors under the National Health Act 1953 (Cth) when considering the costs incurred by a nursing home in the provision of its services. Per Mason J and Gibbs J at 323, it was held that the requirement to ‘have regard to’ requires the giving of weight to the specified considerations as a fundamental element in the determination. Mason J at 329 went on to say:
“When sub-s (7) directs the Permanent Head to “have regard to” the costs, it requires him to take those costs into account and to give weight to them as a fundamental element in making his determination. There are two reasons for saying that the costs are a fundamental element in the making of the determination. First, they are the only matter explicitly mentioned as a matter to be taken into account. Secondly, the scheme of the provisions is that, once the premises of the proprietor are approved as a nursing home, he is bound by the conditions of approval not to exceed the scale of fees fixed by the Permanent Head in relation to the nursing home. In many cases it is to be expected that the scale of fees will be fixed by ascertaining the costs necessarily incurred and adding to them a profit factor. In the very nature of things, the costs necessarily incurred by the proprietor in providing nursing home care in the nursing home are a fundamental matter for consideration.”
[69] (1979) 180 CLR 322.
[90]In Origin Energy Electricity Ltd & Anor v Queensland Competition Authority & Anor[70] judicial consideration of the phrase “weight as a fundamental factor” was undertaken at [90] in the following terms:
“Notwithstanding the number of occasions on which the “weight as a fundamental factor” language has been mentioned as applicable in subsequent cases, in my opinion, there is no general principle that a matter required to be taken into account must be given “weight as a fundamental factor”, if that proposition is intended to convey more than that the matter must be regarded. Beyond that, the question of what is required is a matter which depends on the particular provision in its context. Any other general approach trends judicial review into the merits of administrative action, in my view, and is better avoided. The question is what does the section, properly construed, require? Once that question is answered, there is no further “weight as a fundamental factor” principle to be applied.”
[70] [2014] 1 Qd R 216.
[91]In Minister for Immigration and Citizenship v Khadgi[71] the Full Court, which was in that case concerned with the operation of s 109(1)(c) of the Migration Act 1958 (Cth), said at [60]-[61]:
“In some cases it may be apparent that amongst the factors to which a decision-maker is bound to have regard, there is one factor (or perhaps more than one) which is critical or fundamental to the making of the decision in question. This was true of the particular matter referred to by Mason J in R v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327 at 338. As his Honour’s reasons in R v Hunt; Ex parte Sean Investments Pty Ltd (1979) 180 CLR 322 at 329 show, the relevant statutory provisions may make clear that a particular factor is “a fundamental matter for consideration”. But the converse is also true. The relevant statutory provisions may show that a particular matter to which a decision-maker must have regard is not fundamental to the decision-making process in the sense discussed by his Honour: see, for example, Singh v Minister for Immigration and Multicultural Affairs (2001) 109 FCR 152 at [57] (per Sackville J).”
[71] (2010) 190 FCR 248.
[92]It is clear from the authorities that a decision may be invalid where a decision-maker has failed to give consideration to a relevant matter in reaching that decision.[72] The statutory duty to ‘have regard to’ a matter requires a decision-maker to take into account that matter and give it weight or consideration as a fundamental element in making the determination.[73] It is open to a decision-maker either to reject or accept evidence depending on its persuasiveness, but it may not ignore it altogether if it is a relevant consideration.[74]
[72] R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13 at 34.
[73] R v Hunt; Ex parte Sean Investments Pty Ltd (1979) 25 ALR 497 at 504.
[74]See Barrier Reef Broadcasting Pty Ltd v Australian Broadcasting Tribunal (1992) 27 ALD 730 at 737; Riverina Broadcasters (Holdings) Pty Ltd v Australian Broadcasting Tribunal (1992) 28 ALD 813 at 818 where the tribunal ignored evidence tendered of depreciation charges claimed by a disappointed applicant for a commercial licence when this evidence was relevant to the issue of commercial viability.
Onus of Proof
[93]Citigold submits that the onus of proof in this matter rests with the respondent or alternatively there is no onus of proof. The respondent submits that the onus of proof rests with Citigold or alternatively neither party bears the onus of proof.
Appellant’s Submissions
[94]Citigold submits that as the respondent determined the amount of financial assurance, the respondent should be the one to justify that amount to the Court.
[95]Citigold relies upon three recent Planning and Environment Court decisions.[75] In the Oakley decision Rackemann DCJ reviewed an appeal in relation to a Costal Protection Notice issued by the respondent against the appellant under the Coastal Protection and Management Act 1995 (CPMA) requiring the appellant to undertake certain works on her property.
[75]Oakley v The Chief Executive Administering The Coastal Protection & Management Act 1995 (2014) QPEC 58 and Cuthbert v Moreton Bay Regional Council (2015) QPEC 36 and (2015) QPEC 63.
[96]His Honour noted that the Court’s function under the CPMA was to rehear the matter unaffected by the chief executive’s decision.[76] His Honour stated that:[77]
“Where a right of appeal is given to a Court from a decision of an administrative authority, a provision that the appeal is to be by way of rehearing generally means that the Court will undertake a hearing de novo, although there is no absolute rule to that effect.”
[76]Section 163(2) CPMA.
[77]Oakley v The Chief Executive Administering The Coastal Protection & Management Act 1995 (2014) QPEC 58 at (page 3 line 5).
[97]His Honour went on to confirm that he would hear this matter de novo.[78]
[78] Ibid at page 5 line 20.
[98]His Honour then turned his attention to where the onus of proof would lie in this judicial hearing of an administrative matter and said:[79]
“The CPMA does not state which party is to bear the onus. While it is the person who is dissatisfied with the decision to give the notice who brings the appeal, it does not necessarily follow that that person bears the onus. In conducting a de novo hearing, the Court will be concerned with whether a notice ought issue. That notice disturbs the pre-existing status quo, by requiring the recipient to comply with a notice. Failure to do so is punishable by a maximum penalty of 3000 penalty units.
Prior to the issue of the notice it was for the chief executive to determine whether such a notice should issue. Such a notice ought not have issued unless the chief executive was satisfied that it was appropriate in the circumstances. Similarly, the Court, on a de novo hearing, ought not dismiss the appeal unless it is so satisfied. In such circumstances the onus properly falls upon the respondent, as the authority contending that it is appropriate that the notice be given. The respondent properly accepts that it bears the onus in such appeals.”
[79] Ibid at page 5 lines 25-35.
[99]The Cuthbert case concerned an appeal to the Planning and Environment Court by Ms Cuthbert pursuant to s 531 EP Act against the imposition of an environmental protection order (EPO). In an interim hearing Searles DCJ determined that the respondent council bore the onus of proof to establish the issue of the EPO was a legitimate exercise of its discretion, effectively following the decision in Oakley.[80]
[80] Cuthbert v Moreton Bay Regional Council (2015) QPEC 36 at (31.1).
[100]At the final hearing Morzone DCJ confirmed that the onus of proof rested with the respondent.[81]
[81] Cuthbert v Moreton Bay Regional Council (2015) QPEC 63 at (17).
[101]Citigold further submits that in circumstances where no clear reasons were given by the respondent as to how it came to its conclusion, it would be unfair to require Citigold to bear the onus of proving why the amount determined by the respondent is incorrect.[82]
[82] Applicant’s submissions at (69).
[102]Alternatively Citigold submits that neither party in this matter should bear an onus of proof due to the principles that apply to the determination of an administrative appeal.
[103]Citigold notes that the Land Court is a specialist judicial tribunal and is not bound by the rules of evidence and may inform itself in any way it considers appropriate.
[104]Citigold submits that although this matter is referred to as an appeal, it is closer to a review of an administrative decision, where the Court stands in the shoes of the administrative authority in deciding the matter and has all the powers of the authority and its decision is taken to be the authority’s decision.
[105]Citigold submits that the Court’s role in this matter is more akin to that of an administrative decision maker than a judicial entity to which a decision is appealed. In this regard Citigold cited two commonwealth authorities in support of its submission that administrative tribunals are not required to act in accordance with onus of proof principles.[83]
[83]Minister for Immigration and Ethnic Affairs v Liang (1996) 185 CLR 259 and McDonald v Director-General of Social Security (1984) 1 FCR 354.
[106]Finally Citigold submits that to the extent any onus is placed on it, it should only be to provide sufficient documentation to support the financial assurance calculation it has proposed as part of its rehabilitation plan (as contained in its Plan of Operations).[84]
[84] Applicant’s submissions at (78).
Respondent’s Submissions
[107]The respondent submits that Citigold has applied for an environmental authority (EA) so it can lawfully carry out its mining activities. As part of this process, Citigold was required to provide a rehabilitation plan and its estimate of what the financial assurance should be. To obtain the benefit of the environmental authority, Citigold must comply with the EA conditions including paying the financial assurance amount calculated by the respondent.
[108]Once the respondent determines an amount of financial assurance then it becomes due and payable, even if a party such as Citigold applies for an internal review or subsequently a review by the Court. The financial assurance can thought to be stayed by the Court pending an internal review or an appeal to the Court.
[109]The respondent submits that the statutory intention of the EP Act is for Citigold to persuade the Court that its financial assurance calculation should be imposed, if it disputes the decision of the respondent. The respondent believes this is consistent with the legislative intent of the EP Act and the orthodox legal convention that a party seeking to set aside a decision must prove its case.[85]
[85] Respondent’s submissions at (37-38).
[110]The respondent has provided several cases to support its contention that Citigold who is bringing the appeal, should bear the onus of proof.[86] I particularly note the Gladstone Ports Corporation decision where Jones DCJ determined that the appellant not the Queensland Heritage Council, should bear the onus of proof in the Corporation’s appeal against the Council’s decision to include the appellant’s property in the Queensland Heritage Register.
[86]Gladstone Ports Corporation v Queensland Heritage Council (2012) QPEC 9, Traut v Faustmann Bros Pty Ltd (1983) 48 ALR 313 and Attorney General v Lawrence (2010) 1 Qd R 505.
[111]Alternatively the respondent submits that neither party should bear the onus of proof.
Assessment
[112]A starting point for any onus of proof consideration is the standard axiom that the party who brings the action must bear the onus of proof. The initiator of the action must prove its case to the Court’s satisfaction.[87]
[87] Evidence in Queensland –JRS Forbes at A.102 and Attorney General v Lawrence [2010] Qd R 505 at [30].
[113]However this rule does not always apply, for example it can be altered expressly or impliedly by statute.[88]
[88] Gladstone Ports Corporation v Queensland Heritage Council [2012] QPEC 9 at [15].
[114]Also the facts of the case could be such that the standard onus of proof is reversed. For example Sanpine v Koompahtoo Local Aboriginal Land Council[89] was an action for wrongful termination of a joint venture. The defendant claimed that the joint venture was lawfully ended because of breaches by the plaintiff. The plaintiff denied that allegation. It was held that the defendant must prove the plaintiff’s default. It was not the plaintiff’s task to prove that he was not in breach.[90]
[89] [2005] NSWSC 365.
[90] Evidence in Queensland – JRS Forbes, at pp 62-63.
[115]In this case the relevant legislation is silent as to which party should bear the onus of proof. The Court must then look to the facts of the case.
[116]This is a matter where Citigold has been granted an EA so it can legally undertake its mining activities in Charters Towers. As part of the process Citigold submitted a Plan of Operations. The Plan of Operations contained a rehabilitation plan and an estimate of what Citigold believed were the necessary costs of putting its rehabilitation plan into effect.
[117]The respondent then assessed the rehabilitation plan and calculated the financial assurance amount it believed should be paid by Citigold.
[118]The Court in determining the appropriate amount of financial assurance, must have regard to the rehabilitation plan proposed by Citigold and its accompanying financial assurance estimation,[91] as well as the respondent’s assessment of that rehabilitation plan and its calculation of financial assurance.
[91] See Financial Assurance under the Environmental Protection Act Guideline v 3, at p 27.
[119]In effect the onus is on Citigold to prove its rehabilitation plan and resulting financial assurance calculations are sufficient; and for the respondent to prove its concerns with respect to Citigold’s rehabilitation plan and resulting financial assurance estimation and also prove its own financial assurance calculation is correct. In my view both parties bear the onus of proving what they assert with respect to the rehabilitation plan and resulting financial assurance calculations.
[120]The decision in Gladstone Ports Corporation can be distinguished as it dealt with a very different fact situation and different enabling legislation. In this matter, unlike the Gladstone Ports Corporation case, each party should bear the onus of proving the financial assurance figure they have contended for.
[121]The decisions of Oakley and Cuthbert can be distinguished as in both cases it was the respondent who was taking action against the appellant disturbing the status quo, while in this case the decision appealed against is just part of the process of Citigold submitting a Plan of Operations.
[122]Citigold has submitted it would be unfair for it to bear the onus of proof where there are no clear reasons how the respondent came to its financial assurance decision. By splitting the onus of proof I have resolved this issue as Citigold only has the onus of proving its own financial assurance calculations, and in any event there has well and truly been sufficient evidence provided at the hearing of this matter, for Citigold to know how the respondent calculated its financial assurance figure.
[123]Citigold has also submitted that this Court in conducting a hearing de novo with respect to the respondent’s financial assurance decision, is engaging in an administrative rather than a judicial process and hence no onus of proof is applicable. With respect to Citigold, I do not agree with this submission.
[124]The Land Court is a judicial tribunal.[92] The Land Court is a court of record.[93] The Land Court is also afforded all of the powers of the Supreme Court.[94] The Land Court may subpoena witnesses[95] and punish for contempt.[96] A member of the Land Court has the same privileges, protection and immunity as a Supreme Court judge,[97] and those same privileges, protection and immunity also apply when the Land Court is performing an administrative function.[98]
[92] Section 4(1) of the LCA.
[93] Section 4(2) of the LCA.
[94] Section 7A of the LCA.
[95] Section 8 of the LCA.
[96] Section 9 of the LCA.
[97] Section 35(1) of the LCA.
[98] Section 35(3) of the LCA.
[125]The Land Court conducts its hearings in open court and must take evidence on oath, affirmation, affidavit or declaration.[99] Parties have a right to be represented[100] and reasoned decisions are given.
[99] Section 11 of the LCA.
[100] Section 24 of the LCA.
[126]The Land Court may exercise administrative functions from time to time[101] but in terms of hearing this appeal pursuant to s 524 EPA, the Land Court is exercising its judicial functions albeit to review an administrative decision – in a similar vein to the Planning and Environment Court in the matters of Oakley and Cuthbert.
[101] See the list of matters in s 97 LCA.
[127]Observations concerning the inapplicability of adversarial proceeding concepts such as onus of proof in administrative proceedings,[102] do not apply to this judicial determination of an administrative matter in the Land Court.
[102] McDonald v Director-General of Social Security (1984) 1 FCR 354 at pp 356-357.
Which Guideline applies?
[128]I note both parties agree that the law in force at the time of making this decision is applicable to this matter,[103] therefore I must have regard to Guideline 3 which was issued after the first hearing had concluded but prior to the reopening of this matter.
[103]See applicant’s Submission at (165) and respondent’s Submission at (8) and for judicial authority see Gallo v Chief Executive, Department of Environment and Resource Management [2013] QLAC 6 at [78].
Analysis of Witnesses
[129]As already indicated, one witness provided affidavit evidence and short oral evidence but was not required for cross-examination. I will deal with her evidence first.
Ms Reupena
[130]Ms Reupena is employed by the respondent as a Manager in Resource Sector Regulation and Support in the Environmental Services and Regulation Division of the respondent. Her affidavit was affirmed on 22 October 2015 and is Exhibit 10.
[131]Ms Reupena’s affidavit covers five main topics:
(a)statutory provisions relating to financial assurance,
(b)the preparation of Guidelines 1 and 2;
(c)consultation with the industry regarding Guidelines 1 and 2;
(d)the respondent’s financial assurance calculator and method of calculating financial assurance;
(e)general issues regarding purpose of financial assurance and the difficulties experienced by the respondent and State of Queensland in this respect.
[132]Although Ms Reupena’s evidence is unchallenged, there are still differences between the parties as to how her evidence is to be used.
[133]Ms McIntyre for Citigold argues that Ms Reupena’s evidence relates specifically to Guideline 2 and cannot and should not be referred to or used other than in respect of the financial assurance calculator, which has not changed in the second tranche of the proceedings.
[134]Mr Dillon for the respondent contends that Ms Reupena’s affidavit deals with the origins of the current financial assurance guideline (Guideline 3) and its associated financial assurance calculator, and that the origins of the present guideline and financial assurance calculator provide important context and are generally relevant to this proceeding, whichever version of the guideline applies.
[135]I agree with Mr Dillon. Although her affidavit predates Guideline 3, her evidence shows a clear pathway to the establishment of Guidelines 1 & 2, and by logical extension, Guideline 3, as well as that of the calculator, which has not changed in the time post her affidavit.
Mr Lynch
[136]Mr Lynch is the Executive Chairman of Citigold, which is a publicly listed company. Mr Lynch has been Executive Chairman since September 2013, although his association with Citigold and its predecessors goes back much longer.
[137]Mr Lynch is also a Personal Representative of the Estate of his late father, James Lynch (the estate). Issues relating to the estate are particularly relevant to some infrastructure agreements relating to Citigold.
[138]Mr Lynch lives in Dubai. He has lived there since 2003.[104] He was born in 1956.[105] He grew up in Sydney and spent a six year period living in Charters Towers from 1986 to 1992.[106]
[104] T 7-25 lines 41-44.
[105] Exhibit 32, MJL-44 at p 1.
[106] T 7-28 lines 9-20.
[139]Mr Lynch’s late father formed Citigold for the purpose of developing the gold field that Great Mines Limited and Charters Towers Mines had put together.[107] The three companies were in a close relationship until 2004, when Citigold took over the other two companies.[108]
[107] T 7-27 lines 22-30.
[108] T 7-26 line 40 – T 7-27 line 10.
[140]Mr Lynch accepted that it was fair to say that he had a continuity of experience in working for the three interrelated companies,[109] and that although Citigold was now a public company:
“…there’s been a – a family connection and a family interest, a desire to see this project succeed; and therefore we’ve taken a very close personal interest in it.”[110]
[109] T 7-27 lines 30-40.
[110] T 7-28 lines 3-5.
[141]Mr Lynch receives significant remuneration from Citigold, including a yearly salary of $468,830,[111] and Mr Lynch or parties related to him own 88,347,084 shares in Citigold.[112]
[111]Exhibit 35, Citigold Annual Report 2015 at p 34 – payments to Directors and Key Management Personnel, and p 35 – Service Agreements – Executive Chairman.
[112] Exhibit 35, p 31; T 8-8 lines 0-5.
[142]I agree with Mr Dillon’s submissions that Mr Lynch’s interests are closely aligned with those of the Appellant and his evidence should be considered in that context. As an executive director of the Appellant, Mr Lynch owes contractual, tortious and fiduciary duties to Citigold.
[143]That however does not mean that his evidence should be disregarded.
[144]My impression of Mr Lynch was that of a very competent witness who gave confident answers. I was at first concerned by the length of some of his answers in cross-examination, with perhaps what could be seen as a tendency at times to answer the question that he wanted to answer, rather than the direct question asked.
[145]However, during re-examination, my concerns regarding Mr Lynch’s manner in answering questions primarily evaporated. Mr Lynch’s answers during re-examination tended to be longer – and at times much longer – than his answers in cross-examination. Accordingly, rather than being a tactic to avoid answering questions, it is my view that Mr Lynch’s answering style was to be as expansive and extensive he could be so that his views were fully aired and understood.
[146]Mr Lynch has prepared four Affidavits in the proceedings. They are:
(a)Affidavit of Mark Lynch affirmed 28.09.15.[113]
(b)Affidavit of Mark Lynch affirmed 3.11.15.[114]
(c)Affidavit of Mark Lynch affirmed 02.02.16.[115]
(d)Affidavit of Mark Lynch affirmed 07.03.16.[116]
[113] Exhibit 5.
[114] Exhibit 12.
[115] Exhibit 32.
[116] Exhibit 55.
[147]Mr Lynch gave evidence about the Charters Towers Gold Project; the transfer of unallocated state land to the estate; the financial standing of Citigold; and the proposed use of the underlying land following the completion of the Project, including the community tourist attraction and the gravel supply business.
[148]Mr Lynch’s was subject to extensive cross-examination. The evidence he gave can be put in summary this way:
(a)his involvement at Citigold is entrenched within the company having been commenced by his father who pegged all the prime mining leases in tenure converted subsequently into MDLs, which are the pre-existing tenure to the present MLs and associated with the environmental authority in question in this proceeding;[117]
[117] T 1-26 line 43.
(b)Charters Towers Gold Mines (as Citigold was formerly known) was formed in 1992 as a joint venture with Great Mines Limited;
(c)his knowledge of the history of mining at Charters Towers is extensive, having in his words identified the areas for blasting and been involved with the initial breaking of ground for the areas subject of the present proceedings;
(d)he has had more or less a continuity of mining experience working for Citigold, Great Mines Limited and Charters Towers Mines all of whom are closely interrelated;[118] Mr Lynch noted that this is not the extent of his experience but certainly he does have extensive knowledge of the Citigold Project, tenure, history of mining at Charters Towers, and both from an executive level and from a practical on the ground experience level;
(e)Citigold is a publicly listed company that has a close connection with the Lynch family and the community. It is by all accounts a profit making enterprise, the purpose of which is to mine gold reefs for the Charters Towers region;[119]
(f)in undertaking activities of locating gold reefs, and using some of the geophysical properties, the aim is to find the sulphides because that is a region that could then have high grade gold in it, which is ultimately what the company is looking for;[120]
(g)the Project has the potential to go for 30 years, but that will depend on the rate of blocking out of high grade gold in front of the mining. A number of factors came into consideration in terms of determining the length of mining namely, price of gold, operating costs and proven ore reserves. Each of which only provide an opportunity to estimate that in a reef mining operation two to three years of where you’re currently located. Accordingly whilst it may be the case that a 30 year life of mine is optimal and what has been reported to the market as with any company there are variables which may impact on this aspect of things. Nevertheless Mr Lynch confirms that the mine has the potential to go for up to 30 years based on the known resources presently;[121]
(h)In respect of bore holes across the three sites of Black Jack, Imperial and Central, he attempted to answer these questions based on his knowledge of operations when he was involved with the drilling and then subsequently by observation to the holes and the existence of those holes on the site. Subsequently he was directed to the Plan of Operations[122] and asked a series of questions about the accuracy of the number of drill holes that are likely to be left open at any one time. In particular it was suggested that the drilling of core holes is a collective mass such that the holes are drilled consecutively with large numbers being left open until the drilling program is completed before the contractor would return to cap the earlier drilled holes. Mr Lynch attempted to be of assistance to the Court in respect of these matters, although his knowledge was limited because he did not prepare the Plan of Operations;
(i)Mr Lynch was asked a series of questions regarding the number of drill holes for exploration. Mr Lynch responded to the best of his knowledge based on observations that he had made on site. Whilst I consider Mr Lynch’s responses in relation to this area of cross-examination to be of as much assistance to the Court as he could be based on his knowledge of the site from the time that he was historically involved up to the present, but the utility of such evidence is limited as he was not directly involved with the actual drilling of the holes in question;[123]
(j)Mr Lynch was then asked a series of questions regarding the carrying out of testing of waste rock and processed all waste from the time exploration commences with a view to being able to develop enough information to deal with those waste products. In particular it was suggested to Mr Lynch that it’s important to test the waste products produced by the mines to know what waste is being produced and where it’s going to be stored.[124] Mr Lynch’s evidence is that it is very important to understand the waste rock so you know what is required or not required to keep it safe. He went on to say knowing what ores are going into your plant is also important because ultimately it ends up in the TSF. Mr Lynch’s response in respect of this line of questioning is based on his knowledge of the historical work undertaken in determining the Charters Towers background geology. Mr Lynch’s evidence in this regard was that of a well-informed miner, as a means of assisting the Court, but without purported or prescribed education experience in the area of geological analysis. Nevertheless his evidence in this respect ought not be disregarded because of his firsthand experience in terms of drilling, blasting, placing and processing of ore and waste rock material. Furthermore Mr Lynch gave evidence that full diamond core (RC core) drilling is undertaken of the area with comprehensive analysis being undertaken of those drill cores. His evidence is that if anything unusual comes up its flagged but ultimately it is possible to determine based on visual analysis what the types of material are. Mr Lynch is the chief executive of Citigold Corporation and does not undertake the assessment and verification of the geological material personally but rather was responding to these questions based on his historical knowledge gained from experience and discussions with geologists having taken direction from those geologists in the past;[125]
(k)When questioned about the processing plant in terms of its location being unallocated state land at Blackjack, it was suggested to Mr Lynch that the gravel operations would be unable to proceed in the event that the processing plant had to be decommissioned and removed from site. Mr Lynch gave evidence that in fact the processing plant could be moved. This position is supported both by Mr Lynch and Mr Towsey;[126]
(l)Mr Lynch was questioned at length with regard to whether or not the waste and the TSF and WRD was regulated waste under the EP Act. In my view he endeavoured to answer these questions as best as he could to assist the Court but ultimately Mr Lynch is by his own admission not a geologist;[127]
(m)Mr Lynch gave testimony that neither he nor Citigold were asked to provide any data by Mr Anderson. Mr Lynch stated “He asked for nothing collected nothing and just walked around and took photos and left.[128]
[118] T 7-27 line 35.
[119] T 8-2; 7-28 line 29.
[120] T 7-29 line 1.
[121] T 7-29 lines 15-30.
[122] Exhibit 6.
[123] T 7-32 line 34.
[124] T 7-37 line 40.
[125] T 7-39.
[126] T 8-41 line 45.
[127] T 7-40 line 42.
[128] T 9-44 line 30.
[149]Mr Dillon for the respondent contends that the evidence Mr Lynch gave was at times evasive or contradictory and he was prone to exaggeration. Mr Dillon’s included such topics as:[129]
1.Mr Anderson’s expertise and approach to the financial calculations.[130]
2.The estate, the activities of the estate and the supposed “gravel business” run by the estate, which on his own evidence simply consisted of allowing other parties to process gravel.
3.The “symbiotic” relationship with the Council and the community, and the supposed support given by Council with respect to the proposed tourism and gravel businesses.
4.The involvement of Mr Lynch in the estate and gravel business.
5.The involvement of Mr Francis Rigby, Citi gold’s company secretary, in the preparation of the business plans for either Citigold or other parties.
[129] Respondent’s submissions, para [93].
[130] T 9-20 lines 28-45; T 9-20 lines 5-45; T 9-70 lines 15-23; T 9-71 lines 17–29.
[150]Mr Dillon submits that the Court should treat Mr Lynch’s evidence with care and give it very little weight, particularly when it comes to scrutinizing the landowner agreements and statements; the genuineness of those agreements and statements; and the likelihood of either the gravel or tourism businesses ever proceeding.
[151]I cannot agree with all the submissions of Mr Dillon and in particular his conclusion that Mr Lynch’s evidence should be given very little weight. I will deal with the five key areas of complaint by Mr Dillon separately.
[152]Firstly, I agree that Mr Lynch was rather dismissive of the evidence of Mr Anderson, the expert witness for the respondent. I do not take any of Mr Lynch’s evidence contra to Mr Anderson into account. Primarily, the expert evidence of Mr Anderson will be tested alongside the expert evidence of Mr Thompson for Citigold.
[153]As regards the activities of the estate and the gravel business, Mr Lynch’s evidence was that the estate was clearly involved in part of the gravel business, in that it received some income by selling product to intermediaries who process the crushed rock.[131]
[131] T 8-76 line 29 – T 8-77 line 19.
[154]The manner in which the estate chooses to generate income out of the crushed rock is a matter for it, but it is clearly part of the gravel producing process by being the supplier for profit of the crushed rock and allowing use of its facilities by intermediaries for the processing of that crushed rock into gravel.
[155]I now turn Mr Dillon’s attack on Mr Lynch’s relationship with the local council. The evidence makes it clear that the council has given its agreement in principle to the proposed tourism and gravel businesses.[132]
[132] T 8-66 lines 11-14 – T 8-66 lines 43-46 and Exhibit 32, pp 37 and 40.
[156]It must be remembered that the evidence shows that Citigold has plans which may include a further 30 years of active mining activity. Although there would of course be some progressive rehabilitation during this time, it would appear that much of the rehabilitation would not occur until after the cessation of mining activities. Given therefore the uncertain timeframe for when Mr Lynch’s planned tourism and gravel businesses would actually start operating, it is only logical that an approval in principle would be obtained from the local council rather than a full, formal approval. No doubt, had Mr Lynch not obtained the approval in principle of the local council, the respondent’s attempts to make the proposed tourism and gravel businesses little more than ‘pie in the sky’ concepts would have been emboldened by an argument that Mr Lynch had not even bothered to obtain local authority approval in principle for his proposed businesses.
[157]It is clear that Mr Lynch does not have a detailed knowledge of the operation of the estate, that responsibility primarily falling to his brother Peter Lynch who lives in Sydney. However, Mr Lynch has provided sufficient documentary evidence as to landholder agreements with Citigold relating to the estate, as well as documents and evidence regarding the gravel business.
[158]Turning next to the involvement of Citigold’s Company Secretary, Mr Rigby, there certainly are question marks over Mr Rigby’s preparation of business plans for either Citigold or other parties.
[159]Mr Rigby was appointed company secretary on 1 September 2015.[133]
[133] Exhibit 11, p 19 and Exhibit 34, p 7.
[160]Mr Lynch gave evidence regarding the plans for the gravel business going back to 1993. Mr Lynch gave evidence that he as a personal representative of his brother, Peter Lynch, asked Mr Rigby in a personal capacity to prepare a business plan for Queensland Gravel,[134] a trading name of JJ Lynch Estate, a business which was subsequently transferred to his brother.[135]
[134] T 9-2 lines 19-26 and Exhibit 5, p 166.
[135] T 8-78 lines 1-47.
[161]Mr Lynch also gave evidence that Mr Rigby was asked by him as a director of Citigold to prepare a business plan for a Tourism Business.[136] While unorthodox, Citigold has evidence an ongoing intention to realise a plan for a tourism business culminating in the business plan.[137]
[136] T 9-2 lines 19-26.
[137] Exhibit 5, pp 208-229.
[162]Mr Lynch was clear and open that neither he nor Mr Towsey had the necessary skill set to prepare a business plan and that prior to his appointment Mr Rigby had 14 years’ experience as a financial planner.[138]
[138] T 8-78 lines 28-29 and T 8-78 lines 14-15.
[163]It is logical that when you have an idea for a business but do not possess the relevant skill set to realise that idea you hire someone to do this job for you. Ideally this could have occurred prior to appealing the amount of financial assurance and provided to the department at the time of the internal review, as it happened this did not occur but the business plans are well made and support the plans/intentions that were rejected by the original decision maker as stated in Exhibit 2, the Amended Notice of Appeal:
“(i) In the Statement of Reasons, the Respondent stated that:
11. … Citigold, as the landowner of the majority of the land which is covered by the mining leases, considers tha tit does not have to account for the decomossioning and removal of infrastructure and services because its intention is to use that infrastructure and services because its intention is to use that infrastructure, either for a mining tourist attraction or grave processing operation.
12. At the time of making my decision no landowner statements that supported the above intentions were before me. As such I did not place weight on these intentions.”
[164]Although the timing and preparation of the business plans is suspicious, I do not believe they are a sham. I accept the evidence of Mr Lynch that the infrastructure agreements represent a legitimate intention to use the stated infrastructure after mining, for gravel and tourism ventures.
[165]Without a doubt, primarily due to Mr Lynch’s paid position and shareholding in Citigold, his evidence must be treated with caution. Notwithstanding, I am satisfied with the evidence that Mr Lynch gave and in particular of his honest intentions to ultimately open a tourism operation at Central when mining at Central ceases, as well as his intentions regarding a gravel business. Mr Lynch gave open clear evidence that was generally of assistance to the Court and credible.
Mr Towsey
[166]Mr Towsey is a difficult witness to describe. He was not called as an expert as such but he clearly has high levels of expertise.
[167]In his affidavit,[139] he describes himself and his role in Citigold this way:
[139] Exhibit 47.
“1.I am an Executive Director and the Chief Scientist of Citigold Corporation Limited (Citigold), a publicly listed mining and exploration company.
2.I hold a Bachelor of Science (Honours) and Master of Science degrees from the University of Sydney as well as a postgraduate Diploma in Education from Sydney Teachers' College. I have also qualified for the statutory position of Site Senior Executive by the Board of Examiners under the Coal Mining Safety and Health Act 1999 (qualification number BOE-SSE/11/020). I am a geologist specialising in geochemistry.
3.I have worked for Citigold since July 2002 as General Manager Mining and later Chief Operating Officer and held the role of Chief Scientist since April 2014.
4.My responsibilities as Chief Scientist include (but are not limited to) the following:
(a)acting as the Competent Person for reporting of Mineral Resources and Ore Reserves under the Joint Ore Reserve Committee (JORC) Code;
(b) overseeing the collection and analysis of geochemical, hydrological and environmental samples;
(c)providing scientific input and analysis relevant to solving specific issues as they arise; and
(d) providing direction in the management of occupational health, safety and environmental (OHSE) risks.
5. I have been working in the mining, exploration and OHSE auditing industry for 40 years. I have carried out this type of work in 26 countries, not just in Australia.
6.I have previously been a Director of the Queensland Resources Council, and have held Chief Geologist, Exploration Manager, Chief Operating Officer and Managing Director positions in exploration, underground gold mining and drilling companies. I have also held the statutory position of Site Senior Executive in gold and coal mines.
7.Exhibited to this affidavit and marked ‘CAT-1’ is a true copy of my curriculum vitae.”
[168]The paragraphs quoted above from Exhibit 47 clearly indicate that Mr Towsey has worked continuously for Citigold in one form or another since July 2002. However, a closer inspection of exhibit 47 reveals that this not the case.
[169]Mr Towsey’s personal resume forms part of exhibit 47.[140] His resume sets out his career history in detail, in summary it shows that from April 2014 to the present time Mr Towsey has held the positions of Executive Director and Chief Scientist with Citigold. From March 2014 to April 2014, Mr Towsey was a Non-Executive Director. Before that, from January 2011 to March 2014 Mr Towsey held the positions of Group Manager – Safety and Health and Site Senior Executive on Jax and Cows Coal Mines employed by QCoal Pty Ltd.
[140] Exhibit 47 CAT-01.
[170]Mr Towsey held the positions of Chief Operating Officer and Site Senior Executive with Citigold from January 2004 to January 2011, and the position of General Manager Mining and Exploration, Citigold, July 2002 to January 2004.
[171]His resume goes on to show that he has held in his work career senior positions with major companies in the mining and exploration fields, including companies such as BHP Minerals Exploration, Mount Isa Mines Ltd, and Century Drilling Ltd.
[172]Importantly, Mr Towsey’s resume shows that from September 1987 to April 1994 and from December 1998 to the present Mr Towsey has held the position of Managing Director of Pathfinder Exploration Pty Ltd, a private unlisted company, which is an independent geological consultancy specialising in mineral exploration management and auditing of geological exploration and safety departments of major companies. Mr Towsey lists his major achievements in Pathfinder Exploration Pty Ltd as follows:[141]
“Major Achievements
• Initiated and drove a successful consulting business for 17 years. Clients included BHP, MIM, Cyprus, Aust Ores and Minerals, Bruce Resources, Battle Mountain, Delta Gold, Charters Towers Gold Mines and the Anglican Church.
• Increased Chatters Towers Gold Mines gold resources by 50% in nine months and presented technical data to stockbrokers resulting in $3M private share placement in unfavourable market (March 2000). Contributed to innovative capital raising scheme to raise $25M. Took resources from 200,000 ounces to one million ounces in 18 months at <$5/oz.
• Initiated drilling programs and mineral resource estimates on the Mighty Atom, Surprise, Barbara and Mt Olive copper mines and successful pre-feasibility studies.
• Successfully defined the geochemical outline of the Esperanza deposit (Gunpowder), which is currently being drilled to ore reserve status.
• Discovered diamond indicator minerals in n01th-eastem Victoria.
• Authored refereed research paper on geochemical exploration techniques in Queensland (Journal a/ Geochemical Exploration)”
[141] Exhibit 47 CAT-01, pp 4-5.
[173]This level of detail is important as, on 18 May 2012, Mr Towsey prepared a technical report titled “Mineral Resources and Reserves 2012 Charters Towers Gold Project Citigold Corporation Ltd (Gold and Silver)”. At the head of the front page of the document appears logos of Citigold Corporation and Pathfinder Exploration, this document is Exhibit 54 in these proceedings and is very extensive, containing 173 pages of technical detail regarding Citigold’s operations.
[174]Without doubt, in my view, Mr Towsey was not an employee of Citigold at the time of preparing exhibit 54. Any doubt in this regard is removed by Mr Towsey’s JORC statement[142] as follows:
“JORC STATEMENT - The following statements apply in respect of the information in this report that relates to Exploration Results, Mineral Resources and Ore Reserves: The information is based on, and accurately reflects, information compiled by Mr Christopher Alan John Towsey, who is a Corporate Member and Fellow of the Australasian Institute of Mining and Metallurgy and a member of the Australian Institute of Geoscientists. Mr Towsey is a consultant geologist. He has the relevant experience in relation to the mineralisation being reported on to qualify as a Competent Person as defined in the Joint Ore Reserves Committee GORC) Australasian Code for Reporting of Identified Mineral Resources and Ore Reserves, having worked on the Project as a consultant and former full-time employee since 1999. Mr Towsey has consented in writing to the inclusion in this report of the matters based on the information in the form and context in which it appears.”
[142] Exhibit 54, p 6.
[175]There are some noteworthy points highly relevant to the current proceedings that are made by Mr Towsey in Exhibit 54.
[176]Under Part 18.0 Project Infrastructure, Mr Towsey has this to say about dumps and stockpiles:[143]
“Dumps and stockpiles - Run-of-Mine (ROM) stockpiles are established at the Imperial Mine and at the gold processing plant to ensure surge capacity from variable underground production is stored awaiting haulage to the processing plant or crushing at the plant. Waste material from the Imperial Mine is dumped on an above-ground stockpile at the mine. The material is non-acid-forming granite and granodiorite, which is crushed as required for gravel for mine roads and backfill.”
[143] Exhibit 54, p 132.
[177]In that same part, Mr Towsey has this to say as regards tailings disposal:[144]
“Tailings disposal - tailings comprise mostly 80% minus 106 micron fine quartz sand, crushed granite, minor clay and some metal sulphides (pyrite, galena and sphalerite) averaging around 9000 ppm lead and zinc and 0.05 to 0.2 ppm gold at a slightly alkaline pH of 8.5 to 10. There is no acidic run-off as process water has lime added to it to maintain an alkaline pH, and the weathered granite generates calcium carbonate as the feldspars decompose, neutralising any acid that may form from the decomposition of the sulphides. Tailings are stored in a registered tailings storage facility ('TSF') at the processing plant, with process water being recycled. The very high evaporation rate in the semi-arid Charters Towers area ensures tailings are solidified. The TSF measures about 600 metres by 300 metres with a design storage capacity of some two million tonnes and area for expansion.”
[144] Exhibit 54, p 133.
[178]Under heading 20.6 Mine Rehabilitation and Shutdown in exhibit 54, Mr Towsey makes the following observation:[145]
“An allowance of $2 per tonne of ore mined has been budgeted to cover progressive rehabilitation and final mine shutdown. With the current planned production schedule, this amounts to some A$18 million over 15 years.”
[145] Exhibit 54, p 140.
[179]I should make some immediate comment regarding Mr Towsey’s estimate of $18,000,000 being spent on progressive rehabilitation and final mine shutdown by Citigold. A cursory glance at such sum shows of course that it is above the amount of financial assurance sought by the respondent from Citigold. Given that Citigold’s then consultant and now Executive Director and Chief Scientist has arrived as recently as 2012 at such a figure, one may rhetorically ask the question; What is this case all about given that statement?
[180]Mr Towsey explained[146] that the sum of $18,000,000 referred to was budgeted for progressive rehabilitation and final shutdown over a period of 15 years. This is a normal part of mining operations. Put simply, the more that a miner mines, the more impact the miner will have on the environment, and the greater the rehabilitation that will have to occur. Financial assurance is however, in my view, having taken particular note of the evidence surrounding the reason for the current financial assurance scheme operating, is completely different. The financial assurance will be called upon when a miner stops mining and goes into liquidation/abandons the mine site/or the like. The financial assurance is to be a sum to rehabilitate the land back to an acceptable standard should those circumstances arise. It is a full rehabilitation at a particular point in time, not a progressive rehabilitation over an extended life of an operating mining program.
[146]T11-81 lines 18-46.
[181]The respondent can gain no comfort for its case by relying upon Mr Towsey’s sum of $18,000,000 derived for a different purpose under completely different conditions circumstances.
[182]It is noteworthy at this point that both experts Mr Anderson and Mr Thompson confirmed that they had regard to exhibit 54, Ms McIntyre submits that Mr Towsey’s evidence of the Metallurgy and Geochemistry of the awe body and open burden was unchallenged.[147] I tend to agree. Noteworthy evidence that Mr Towsey gave in this regard is as follows:
“PAF doesn’t go into the waste rock. Potentially acid forming material is the ore that we put through the processing plant.”[148]
…
“You have to understand how the mining procedure goes. We drive tunnels through the background material. That is looked at as material goes through. We then drive along the ore bodies, and that material is actively sampled every face. We advance about 3m every time we blast. Each face is sampled with a number of samples taken across that area. So there’s a chemical analysis taken in potentially acid forming material every three metres…where we encounter it.”[149]
“Well, you could not say that without knowing what the alkaline load, so to speak, and the acid load in the TSF is?---
We do know. We know there’s two per cent sulphide in there. Alright? There’s two per cent sulphide. We’ve established that from all the chemical analysis we’ve done. Part of that is galena, lead sulphide, which is acid consuming, not acid producing. Part of it is sphalerite, zinc sulphide, which is also acid consuming. And there is a small amount of pyrite which is acid producing, but it is so outweighed in its own sulphide by the acid consuming sulphides - not all acid - not all sulphides produce acids. Some sulphides, galena and sphalerite, are acid consuming. And we have more acid consuming material, by a long way, than we have acid producing. So there’s no way that anything in that tailings dam can produce acid, even if it is subjected to 100 years of adding acidic rain to it or adding acidic humic acid of the soils.”[150]
[147] Citigold’s submissions, para [417].
[148] T 10-54 lines 14-16.
[149] T 10-55 lines 3-11.
[150] T 10-56.
[183]Mr Towsey’s evidence is that there were three types of waste, they are overburden, waste rock, and tailing,[151] and that Citigold does not have waste rock. As he put it:
“We don’t have waste rock. We have processed everything which looked like it might contain mineralization. We have overburden. We have non-mineralized materials. We don’t have a low-grade stock pile. We don’t have mineralized material sitting at the surface. We haven’t – what – what we characterize as waste is what has gone through the processing plant and is now called tailings. So we have overburden stock piles. We have tailings. We don’t have anything I would describe as a waste rock stock pile which has been subject to some sort of processing.”[152]
[151] T 10-43 line 10.
[152] T 10-44.
[184]His evidence was also that the financial assurance calculator, under domain 4, lists overburden and waste rock, clearly defining them as two separate terms, with overburden the background material.[153] He went on to explain that Citigold did not undertake rock modelling of the overburden and that it is standard mining practices to develop a block model of the ore body that you intend to mine, not the waste rock that is characterized, chemically identified and stored.[154]
[153] T 10-45 line 5
[154] T 10-43 line 30.
[185]Mr Towsey gave further evidence that visual control of an ore body is sufficient in this area because of the mineralogy of Charters Towers, and that in this respect selective handling is not necessary.[155]
[155] T 10-44.
[186]Mr Towsey stated that the analysis of the tailings was not just for gold recovery rates but also to determine lead and zinc levels,[156] and that the periodic sampling undertaken on the TSF along with the tailings themselves were available to the experts and that Mr Thompson asked for chemical analysis data which was supplied to him.[157]
[156] T 10-48.
[157] T 10-49 line 15 and T 11-16 regarding process of sampling.
[187]It is Mr Towsey’s view that Citigold in undertaking its testing of both the overburden and tailings contained in the TSF along with the various water testing and other testing activities undertaken by the company, is sufficient to meet its obligations under the EA. To the extent that it is required to do anything further, Citigold has not been informed of this.[158] Further, as a result of the proceedings, Citigold has taken the view that it will undertake a block model of the TSF and in fact has already drilled eight holes and sampled 1m of material.[159]
[158] T 10-51.
[159] T 10-51 and T 10-52.
[188]As regards rehabilitation, Mr Towsey’s evidence is that the rehabilitation plan is reviewed and assessed every two years as is required under the Mining and Quarrying Safety and Health Act 1999 requirement to update the standard operating procedures (SOPs). His evidence is that if upon reviewing the SOPs nothing material has changed, then there’s no need to update or amend anything.[160]
[160] T 11-5.
[189]Mr Towsey says that it is not possible to conduct a rehabilitation trial on the TSF until such time as the TSF is not actively in use.[161] Mr Towsey’s evidence in this regard in on the basis of the size of the TSF and the way the TSF is set up. He stated:
“It has a ring main around the outside. It feeds from the ring main to a series of spigots which then deposit the tailings in certain areas and we have to move the area to different areas in order to keep the pond area up where we need it to be and to drain the beached areas to ensure we have a dry TSF.”[162]
[161] T 11-6 line 20.
[162] T 11-6 line 35.
[190]In terms of undertaking trials of rehabilitation in respect of the TSF, Mr Towsey gave the following evidence:
“The purpose of the trials is to monitor the rate at which vegetation regenerates over rehabilitated areas so we can harness that material and weigh how much grass is going to be developed on that area, because the final end result of capping the TSF is to feed two cows. It’s to be returned to lower intensity grazing which is one cow per 8 hectares. We have a 20 hectare TSF. It only has to support two cows. We have to measure to make sure there’s enough grass - is going to grow in top soil we put on the TSF to support two cows.”[163]
[163] T 11-7 line 10.
[191]Further, both Exhibit 54 and CAT-14[164] influenced the preparation of the Plan of Operations regarding his knowledge of background geology and the requirements for rehabilitation on site.
[164] Exhibit 47.
[192]The above evidence primarily supports the case of Citigold. However, that is not the full extent of Mr Towsey’s evidence as pointed out by Mr Dillon.[165]
[165] Respondent’s submissions, para [106].
[193]Mr Towsey disagreed that it was important to have routine samples of waste rock, and like Mr Lynch he also equated selective handling with the separation of ore and waste rock.[166]
[166] T 10-43 lines 32-48.
[194]The waste rock on the waste rock dumps or stockpiles was only selectively handled in the sense that waste material was selectively separated from ore[167] by way of a visual selection.[168] Contrary to Citigold’s own terminology[169] and accepted mining terminology[170], Mr Towsey did not accept that the waste rock dumps contained waste rock. As he put it:[171]
“And Citigold doesn’t carry out selective handling of the waste rock that’s produced?---We do at times where it’s possible.
It hasn’t carried out any systematic handling – sorry. I withdraw that. It hasn’t carried out any consistent selective handling process for the waste rock in the waste rock stockpiles, has it?---Yes. It has.
Well - - -?---That’s how it got on the waste rock stockpile. It was selected – it was identified as waste, selectively handled as waste, and put onto a waste stockpile.
And that’s the extent of it, isn’t it. No further tests?---We don’t have waste rock. We have processed everything which looked like it might contain mineralisation. We have overburden. We have non-mineralised material. We don’t have a low grade stockpile. We don’t have mineralised materials sitting at the surface. We haven’t – what – what we characterise as waste is what has gone through the processing plant and is now called tailings. So we have overburden stockpiles. We have tailings. We don’t have anything I would describe as a waste rock stockpile which has been subject to some sort of processing.
Well, the overburden is waste rock?---No. It’s not.”
[167] T 10-44 lines 35-37.
[168] T 10-44 lines 20-26; T 10-46 lines 30-36.
[169] Waste Rock Report, March 2014 (Exhibit 28).
[170] Agreed glossary definition “Waste Rock”. See also EP Act s 13 for the definition of “Waste”.
[171] Respondent’s submissions, para [106].
[195]Mr Towsey sought to characterize material in the waste rock dumps as being “background material” which had been moved 100m or 150m,[172] although he accepted that the waste rock “may contain the odd bit of sulphides”,[173] and various amounts of heavy metals. When questioned about this, the following exchange occurred:[174]
“Well, are different loads put in different spots, you know, depending on the characterisation of the overburden?---We have an arrangement in our EA where, if material is identified as potentially hazardous, it may be inserted into a part of the stockpile and therefore isolated within the stockpile. To my knowledge, that’s never been done, because the material we are looking at is simply background material that we’re shifting.
And it’s background material that you don’t systematically test and characterise?---No. Because it is background material. The whole point of contamination is it has to be different from background.”
[172] T 1-45 lines 3-5.
[173] T 1-54 line 20.
[174] T 10-45 lines 28-37.
[196]Contrary to both Mr Thompson and Mr Anderson, Mr Towsey did not accept that any form of acid, saline or metalliferous drainage could result from the waste rock dumps.
[197]In addition, there is no block modelling of the waste rock dumps, and there is no block modelling of the waste in the TSF and such modelling isn’t necessary because the tailings are contained, although Citigold now intends to block model the TSF waste.
[198]Mr Towsey accepted that there would be some level of sulphidic material deposited in the TSF after processing which would oxidise, but he stated that the acid would not be produced because of other acid consuming materials.[175]
[175] T 10-57 lines 30-39.
[199]When Mr Towsey was asked about the contents of the TSF the following exchange occurred:[176]
“Now, the TSF contains hazardous contaminants?---We are authorised to put hazardous contaminants into that TSF. Correct.
Yes. And it contains hazardous contaminants?---It contains contaminants which could be hazardous under certain circumstances.
Yes. And they’re capable of causing environmental harm?---Only if they escape from the TSF. We’re authorised to put them in there. That’s the container for them.
And the TSF is – the tailings are the waste product of the ore body and the liquor that’s applied to the ore body - - -?---Correct.
- - - through the processing?---Yes.
And the tailings, therefore, contain heavy metals?---Yes. They do. Sulphates?---Yes.
And sulphates contribute to salinity?---Under certain circumstances, yes.”
[176] T 11-26 lines 5-23.
[200]Mr Towsey agreed that metalliferous drainage was capable of being produced in alkaline or neutral pH conditions, but he said it could be very beneficial to the environment. He did not accept that saline drainage was capable of being produced at the Citigold site at all.[177]
[177] T 11-28 lines 27-31.
[201]Mr Towsey gave evidence that the TSF was sampled in 2006 and 2007 and periodically as required,[178] and that the data was provided to Citigold’s solicitors to provide to Mr Thompson.[179] He stated that Citigold intended to block model the TSF and that eight holes had been drilled which were sampled at one metre intervals.[180]
[178] T 10-49 lines 6-10.
[179] T 10-49 lines 12-25 and following.
[180] T 10-51 lines 5-8; T 10-51 line 44 – T 10-52 line 2.
[202]In re-examination, Mr Towsey explained his own approach to rehabilitation strategy as follows:[181]
“So why is it that your rehabilitation strategy contained in the plan of operations is so vastly different to that of Mr Anderson and Mr Thompson?---The requirement for financial assurance it should be no more than the amount actually required to do the job. So we looked at what was required to do the job, to feed 10 cows, which basically is the restoration of 77 hectares to low intensity grazing at a rate of one cow per eight hectares. We devised a strategy which we felt resulted in meeting the outcomes of the EA, that the landforms would be stable, they would be safe, non- polluting and self-sustaining to meet those outcomes. We did that, obviously, at minimum cost.”
[181] T 11-70 line 39.
[203]Mr Towsey accepted that it was standard practice to carry out rehabilitation trials to test proposed rehabilitation methods.[182] In the context of questions about the TSF, Mr Towsey accepted that capping trials or trials about covers were very important,[183] and that if a capping trial of the TSF was conducted you could get a response that would be representative of how the tailings dam would perform over time.[184]
[182] T 11-5 lines 35-36.
[183] T 11-7 line 23.
[184] T 11-74 lines 18-24.
[204]He accepted that it is similarly important to undertake trials with respect to things like waste rock dumps, although he maintained his denial that Citigold had no waste rock dumps.[185]
[185] T 11-8 lines 19-26.
[205]There is a stark difference between the parties as to the way in which I should deal with the evidence of Mr Towsey. Ms McIntyre submits that Mr Towsey’s evidence with respect to the specific matters regarding background geology in Charters Towers; the geology of the project site; the specifics of gold extraction and processing; and the processing plant should be preferred over that of Mr Anderson and that such evidence also compliments the evidence of Mr Thompson.[186]
[186] Citigold’s submissions, para [410].
[206]Mr Dillon has a completely different approach to the evidence of Mr Towsey. He submits that Mr Towsey’s interests are closely aligned with those of Citigold, and as an executive director he has a duty to act in the best interests of the company, and that accordingly his evidence should be considered in that context.[187]
[187] Respondent’s submissions, para [98].
[207]Mr Dillon specifically submits that Mr Towsey was not nominated as an independent expert or relied upon in that capacity.[188]
[188] Respondent’s submissions, para [99].
[208]Whilst it is certainly true that Mr Towsey was not classified as an expert witness, it is clear from Citigold’s overall case that Citigold does rely upon Mr Towsey’s expertise. That distinction is particularly important for the period of time when Mr Towsey’s only involvement with Citigold was as an independent consultant.
[209]Mr Dillon rightfully points out that Mr Towsey is a geologist and not a mining rehabilitation expert although he claims to have sufficient experience to manage that part of the operation.[189]
[189] T 10-61 lines 24-26.
[210]Mr Dillon noted that at its highest Mr Towsey only claimed some experience in mining rehabilitation.[190]
[190] T 10-64 lines 8-18.
[211]Overall, I agree with Mr Dillon that great care must be taken with Mr Towsey’s evidence. However, I do not go so far as to say that his evidence is of little or weight and should be disregarded. In many respects, his evidence is unchallenged and relates to a time when he was an independent consultant of high expertise. He also clearly has a thorough knowledge of the mining industry in general and the Citigold operation in particular.
[212]Overall, where Mr Towsey’s evidence is in conflict with the expert evidence of Mr Anderson and Mr Thompson, the expert evidence of Mr Anderson and Mr Thompson must prevail. However, where there are areas of disagreement as between the experts in an area where Mr Towsey has given evidence, then in my view Mr Towsey’s evidence may be of some assistance to the Court in determining any such matter, although great care must be taken by the Court before any reliance is made on Mr Towsey’s evidence in this regard. In short, apart from those areas in this decision where I have specifically relied upon the evidence of Mr Towsey, I prefer the evidence of Mr Anderson and Mr Thompson.
Ms Minnesma
[213]Ms Minnesma is the Director of Minerals, Minerals and North Queenland Compliance, Environmental Services and Regulation Division of the respondent. She has supplied a detailed affidavit[191] and gave evidence on 5 February 2016.
[191] Exhibit 9.
[214]Ms Minnesma holds a Bachelor of Science (Environmental), Master of Science (Agricultural and Natural Environment) and Graduate Certificate in Public Sector Management. She has been employed by the respondent and its predecessors since 2000.
[215]Ms Minnesma holds a delegation to determine the amount and form of financial assurance under s 295 of the EP Act.[192]
[192] Exhibit 9, para [5].
[216]As she put it in her affidavit:[193]
“In my current position and in my previous roles with the Department, I have been involved in the assessment of financial assurance under the Act, and with over 15 years of experience in regulation of the mining industry in Queensland, I have gained a thorough understanding of mine site operations, closure and rehabilitation.
Particularly in the last five years or so, the Department has recognised that it generally holds insufficient financial assurance for mining and petroleum and gas projects across Queensland. This has come about following the 2012 review on financial assurance conducted by the Department, a 2013 report produced by the Queensland Audit Office and the development of the financial assurance calculator in 2014.
…
As a consequence of changes to the financial assurance regime, the Department must now assess financial assurance amounts having regard to the Financial Assurance under the Environmental Protection Act 1994 guideline, version 2.
In my experience this has meant that the amount of financial assurance calculated under the guideline has generally increased as compared to historical financial assurance requirements, to more accurately reflect contemporary costs of rehabilitation.”
[193] Exhibit 9, paras [8]-[9] and [11]-[12].
[217]Ms Minnesma then goes on to state that on 27 November 2014 after receipt of the 2014-2016 plan of operations, Dean Sharpe, an authorised delegate of the respondent, made a decision under s 295(1) of the EP Act that financial assurance in the amount of $12,509,000.00 was required. The form of the financial assurance was to be a bank guarantee from an approved financial institution.[194]
[194] Exhibit 9, para [28].
[218]Following an application by Citgold for an internal review of the original decision, on 9 January 2015, Sam Tarlinton, Delegate of the Department made a decision under s 521(8) of the Act to confirm the original decision to require financial assurance in the amount of $12,509,000.[195]
[195] Exhibit 9 para [30].
[219]Later in her affidavit, Ms Minnesma goes on to explain the reasons for the inclusion of a “contingency fee” of $942,016.38 in the amount of financial assurance considered by the respondent to be appropriate for the Citigold operations as at the date of her affidavit. I note that the amount of financial assurance is different to the decision made by Mr Tarlinton. Helpfully Ms Minnesma sets out her reasoning for a contingency fee and a summary of calculations for the amount of financial assurance, having in her affidavit earlier gone to great detail with respect to the various components of the calculations. Her evidence on the contingency fee and the financial assurance required is as follows:
“103. Although a contingency fee is not expressly referred to in the guideline, the inclusion of a 10% contingency would help cover unknown or unexpected or under costed items, and ensure that all total potential costs to rehabilitate significantly disturbed land are covered.
Total Financial Assurance Required
104. Without the contingency fee, the total amount of financial assurance required as currently calculated by the Department is $10,833, 188.37 and with the contingency cost is $11,775,204.75.
105.Table 8 is a summary of the Department's current assessment.
Table 8: Department's Current Assessment
REF DESCRIPTION DETERMINATION I1 Disconnect and terminate all services (Water, electricity, gas etc at point of attachment to site) $0
As per WPT1
I2 Removal of low / medium voltage powerlines including disconnection, rolling up the wires and removing the polies – does not include the removal of substations $0
As per WPT1
I3 Demolish and remove small buildings (camps, administration buildings, accommodation, bath house etc) $0
Infrastructure agreement.
I4 Demolish and remove industrial buildings (workshops, tyre change and servicing area etc – not CHPP) $0
Infrastructure agreement
I5 Remove small underground pipe – 300mm pipes $0
Infrastructure agreement.
I6 Remove concrete pads and footings (<0.3 m thickness) and dumping in void. $0
Infrastructure agreement.
I8 Remove fence (cyclone / wire fence) $0
Agreed amount
I9 Unsealed roads / vehicle park-up areas – Minor earthworks, final trim and deep rip (pasture grass) $0
Infrastructure agreement
I10 Undertake Phase 1 contamination assessment – assumes potential contamination is localized. If there are multiple work areas on site, additional studies should be included. $15,000
Expert agreed amount
111 Removal and off site treatment of hydrocarbon contaminated water from workshops, bunded areas and sumps $700
Expert agreed amount.
I12 Remove material (carbonaceous / metalliferous spillage or otherwise from footprint of the process facility (leach pads) / stockpile area (ROM product) / roads and dump in a void on-site (haul distance (<1km) $3,900
Expert agreed amount
I13 Onsite remediation of hydrocarbon contaminated soils (<50m3) – manual land farming. $2,750
Expert agreed amount
I14 Fill dams, voids, etc – source local material, cart and spread to cap or backfill, cap thickness determined by approval / permit (haul distance <1km) $0
As per WPT1
I15 Trim, rock rake & deep rip (includes levelling / landscaping and rip in 1 direction) $0
As per WPT1
I16 Source, cart and spread topsoil (@0.2m) (<1km) $0
Expert agreed amount
I17 Direct seeding / fertilizer (pasture grass species) $0
As per WPT1
I18 Seal portals / adits (width >2m) – backfill the adit for at least 50m against a concrete bulk head with drainage slots. If concrete bulk head not required, reduce rate by 25%. $250,000
Expert agreed amount
I20 Seal and rehabilitate ventilation fan shafts $150,000
Expert agreed amount
I21 Maintenance and monitoring of sealed adits / portals and shafts (5 years) $50,000
Expert agreed amount
I22 Bore holes – cap and seal open bore holes ~ 0.05 – 0.2m, backfill with cuttings $0
Expert agreed amount
I23 Demolition and removal of vent fans, electrical substation and winch. $25,000
Expert agreed amount
124 Reshaping, capping / sealing of high risk material presenting environmental difficulties (ARD / AMD / PAF, carbonaceous, saline material etc) $0
Low risk stable material
I25 Materials for reshaping, capping / sealing of low risk material presenting environmental difficulties (ARD / AMD / PAF, carbonaceous, saline material etc) $0
Expert agreed amount.
I26 Source, cart and spread topsoil (@0.2m) haul distance <1km $32,773
Low risk stable material requiring topsoil
I27 Trim, rock rake & deep (includes levelling / landscaping and rip in 1 direction) $11,232
Required for rehabilitation as per TRA.
Not infrastructure.
I28 Direct seeding / fertilizer (pasture grass species) $14,508
Seeding and planting required.
Not infrastructure.
I29 Construct standard stock fence around rehabilitated areas. $0
Expert agreed amount.
I30 Clean water dams / sediment control structures to be retained after closure – make safe and minor earthworks. $0
Expert agreed amount.
I31 Highwall treatment – trench and safety berm construction $63,000
Expert agreed amount
I32 Purchase and erect warning signs $1,750
Expert agreed amount
I33 Security fence around steep section of high wall $38,500
Expert agreed amount.
I34 Bore holes – cap and seal open bore holes ~ 0.05 – 0.2 m, backfill with cuttings. $10,500
Citigold amount
TOTAL FOR IMPERIAL $669,613 TOTALS CENTRAL $467,850 BLACKJACK $3,531,060 IMPERIAL $669,613 TOTAL SITES $4,668,523 Project Management 10% $466,852 Maintenance and Monitoring $233,426 Contingency $0 Total Financial Assurance $5,368,801
Determination
[364]In accordance with the above, I determine the total amount of Financial Assurance payable by Citigold for the Citigold Project in the sum of $5,368,801.
[365]Accordingly, the appeal is allowed.
[366]The form of Financial Assurance is, as I understand it from Counsel’s Submissions, agreed to be in the form of a bank guarantee from an approved financial institution.
ORDERS:
1.The Appeal is allowed and the decision of the respondent is set aside.
2.The Financial Assurance is determined in the sum of Five Million, Three Hundred and Sixty-Eight Thousand, Eight Hundred and One Dollars ($5,368,801).
3.The form of the Financial Assurance is a Bank Guarantee from an approved financial institution.
PA SMITH
MEMBER OF THE LAND COURT
Appendix A – Glossary
Term Definition Exhibit Acid A measure of hydrogen ion (H+) concentration; generally expressed as pH. Acid is not equivalent to acidity (see definition below). 24 Acid base
account/acid base accounting (ABA)An Acid Base Account (ABA) evaluates the balance between acid generation processes (oxidation of sulphide minerals) and acid neutralising processes. It can involve determination of the maximum potential acidity (APP) and the inherent acid neutralising capacity (ANC), both defined below.
A series of chemical analyses and calculated values (Chapter 14) used to estimate the magnitude of the acid generation potential (AP, Chapter 12) and acid neutralization potential (NP, Chapter 13) of a sample and its present and potential future net drainage pH.
ABA includes the most common static tests used in the prediction of acid rock drainage.
Uses of ABA data include: 1) an initial coarse estimation of the present and potential future net drainage pH; 2) part of the information used in a more refined, site specific prediction of the present and potential future net drainage pH; and 3) operational characterization of the present and potential future net drainage pH of excavated material and exposed surfaces, based on refined, site24
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specific prediction in 2 above. Kinetic tests, mineral identification and detailed elemental analysis are required for more refined, site- specific prediction. Accurate prediction of the potential future net drainage pH from the ABA data requires an understanding of the analytical procedures, the future physical and geochemical conditions, external inputs and the identity, location and reactivity of the contributing minerals. The analytical procedures, the number of tests and the interpretation of the analytical data should all be clearly identified since there is considerable variation in sample preparation. See also acid generation, neutralization potential and static NP procedures.
Term Definition Exhibit Acid drainage Drainage characterised by low pH, and typically elevated toxic element concentrations, high sulfate concentrations and high salinity. 24 Acid(ic) In geology, a chemical classification of igneous rocks. Containing more than 66% silica. In chemistry, having a pH <7. 54 Acidity A measure of hydrogen ion (H+) concentration and mineral (latent) acidity; generally expressed as mg/L CaCO3 equivalent. Measured by titration in a laboratory or estimated from pH and water quality data. 24 Acidity load The product of acidity and flow rate, generally expressed as mass CaCO3 equivalent per unit time. 24 Acidity load balance The acidity load balance for a mine site takes into account water volumes and flow rates as well as acidity (see definition above), and incorporates all mine facilities that are potential sources of AMD, for example, waste rock piles, ore stockpiles, tailings storage facilities, pits, underground workings, heap leach piles and mine construction materials. 24 Aeromagnetics Airborne geophysical survey measuring variations in the Earth’s magnetic field 54 Ag Silver 54 Alkalinity A measure of the capacity of a solution to neutralise an acid. 24 AMD Can mean either Acid and Metalliferous Drainage or Acid Mine Drainage (also known as Acid Rock Drainage) 21 & 24 Acid Rock Drainage (ARD) Acidic pH drainage derived from materials with an insufficient capacity to neutralize the acidic products of sulphide and elemental sulphur oxidation and the dissolution products of acidic minerals and morphous materials.
ARD is produced when the NP is no longer capable of maintaining neutral pH conditions in a measurable volume of drainage. In the context of mining, may be referred to as acid mine drainage (AMD).21 Assay Chemical analysis. Strictly refers to analysis of precious metals by the fire assay method with gravimetric finish. Commonly used to mean any chemical analysis 54
Term Definition Exhibit Au Gold 54 base metal Generally a metal inferior in value to the precious metals, mainly copper, lead, zinc, nickel, tin and aluminium. 54 batholith A large mass of consolidated intrusive igneous material (usually of granitic composition) (see also pluton). 54 Bed-rock Solid rock underlying soil, alluvium etc. 54 Blending In the context of sulphidic drainage chemistry, mitigation blending refers to the code position of potentially net acid (PAG) and net neutral mine wastes (Non-PAG). The objective in blending is generally to create a composite material in which the acid produced by the PAG waste material is neutralized by Non- PAG materials, with a consequent precipitation of the majority of the released metals as secondary minerals. 21 Block model A three-dimensional model of the distribution of ore and waste materials with different geochemical properties (metalliferous mines). Also see ‘grid/layer model’. 24 breakeven In ore reserve estimation, the gold grade at which the mining cost equals the value of the extractable gold. At breakeven grades, the operation makes neither a profit nor a loss. 54 Breakeven can be calculated at various cost levels, such as an operating breakeven (the grade required to continue operations) or total cost breakeven (which takes into account overheads such as depreciation, mineralized, cost of capital, off-site overheads, interest, tax etc). decline Usually refers to a downward sloping underground roadway. 54 density Mass divided by volume. Measured here in tonnes per cubic metre. 54 diamond drilling Method of obtaining a cylindrical core of rock by drilling with a diamond impregnated bit. 54 drainage chemistry The concentrations of dissolved components in drainage, including element concentrations, chemical species and other aqueous chemical parameters. 21 fault A fracture in rocks along which rocks on one side have been moved relative to the rocks on the other. 54
Term Definition Exhibit Fracture A break in the rock. 54 g/t grams per tonne (grams/tonne) 54 Galena lead sulphide mineral, an ore of lead 54 Gangue Waste minerals associated with ore. 54 Geophysical The exploration of an area in which physical properties (e.g resistivity, conductivity, magnetic properties) unique to the rocks in the area are quantitatively measured by one or more methods. 54 Geostatistics Mineral resource estimation method. A computer based method wherein particular relationships between sample points are established and employed to project the influence of the sample points. Based on the application of statistics to the variation in grade of ore bodies. 54 granite, granitic Coarse grained igneous rock composed of quartz and feldspar with varying amounts of ferromagnesium minerals such as biotite or hornblende, with or without muscovite.
Adjective is ‘granitic’.
54 Granitoid Field term for body of rock of granitic composition. 54 Heap Leach An extraction process in which stockpiled ore is leached to remove target metals. Leaching solutions, generally weak acids or alkaline cyanide, are percolated through heaps of ore. Leachate is collected and metals contained in the leachate are extracted chemically or electrochemically. Typically, the particle size of the ore to be leached is reduced to increase surface exposure of metal containing minerals. Despite the reduced particle size, after leaching ceases, the heap typically has many properties in common with a waste rock dump. 21 in situ Term used to describe rocks and minerals found in their original position of formation. 54 joint Fracture in rock along which no appreciable movement has occurred. 54
Term Definition Exhibit JORC Code The “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, The JORC Code 2004
Edition”, a report of the joint committee of the Australasian Institute of Mining and Metallurgy, Australia Institute of Geoscientists and Australia Mining Industry Council. It is a comprehensive integrated exposition on geological resources and ore reserves, and adherence to the Code is a requirement under the Australia Stock Exchange Listing Rules
54 km Kilometre 54 Kinetic Test A procedure used to measure the magnitude and/or effects of dynamic processes, including rates of reaction, material alteration and drainage chemistry and loadings that result from weathering. Unlike static tests, kinetic tests measure the performance of a sample over a prolonged period of time. 24 Procedure used to measure the magnitude and/or effects of dynamic processes, including reaction rates (such as sulfide oxidation and acid generation), material alteration and drainage chemistry and loadings that result from weathering. Unlike static tests, kinetic tests measure the minerali of a sample over time 21 MEND Mine Environment Neutral Drainage 24 Metalliferous drainage A form of Acid and Metalliferous Drainage (AMD), mineralizedn by near-neutral pH, elevated heavy metal concentrations, high sulfate salinity. 24 metre-gram(s) or metre-grams per tonne Is the assay grade mineralize out to a minimum width of one metre width by multiplying the true width by the grade to produce metal accumulations over a metre of rock (ie. Metre-grams per tonne Au or metre grams of gold per tonne of rock) and is used where the drill intersections true width is less than one metre. The material included in the one metre interval outside the assayed section is assumed to be zero grade thereby diluting the original assay. 54 mineralisation The introduction of valuable minerals into a rock body 54
Term Definition Exhibit mm millimetre 54 Neutral Mine Drainage Mine drainage mineralizedn by near-neutral pH, elevated concentrations of ionic species and potentially toxic element concentrations. Neutral mine drainage may be the product of ineralized acid drainage (ie mineralized AMD/ARD), or dissolution of readily soluble minerals in mine wastes. See metalliferous drainage. Open cut Synonymous with open pit 54 open pit Mine excavation or quarry, open to the surface 54 ore Rock, sediments, or non-lithified materials that contain economically recoverable levels of coal, metals or minerals. See cut-off grade, low grade ore stockpile, tailings and waste rock. 21 Rock or mineral(s) that can be extracted at a profit. Often applied (incorrectly) to mineralizedng in general. 54 Ore Reserve An ‘Ore Reserve’ is the economically mineable part of a Measured or Indicated Mineral Resource. It includes diluting materials and allowances for losses that may occur when the material Is mined.
Appropriate assessments, which may include feasibility studies, have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environment, social and governmental factors. These assessments demonstrate at the time of reporting that extracting could reasonable be justified. Ore Reserves are sub-divided in order of increasing confidence into Probable Ore Reserves and Proved Ore Reserves
54 outcrop a body of rock exposed at the ground surface 54 oxidised near surface or after-mining decomposition of rocks, minerals or metals by exposure to the atmosphere and groundwater. 54 See also oxidation and weathering.
Term Definition Exhibit Oxidation 1. The removal of one or more electrons from an ion or atom. 2. A process of decomposition in which electrons that hold matter together are transferred to another compound called an oxidant. 3. Process of combining with oxygen. Petrography The branch of geology dealing with the description and systematic classification of rocks, especially by means of microscopic examination of thin sections. More limited in scope than petrology. 21 Petrology The branch of geology dealing with the origin, occurrence, history and structure of rocks as determined from petrography and geochemistry. See also lithology. 21 pH Literally, “power of Hydrogen”. A measure of the concentration of hydrogen ions in solution that determines acidity or alkalinity. The pH ranges from 0 to 14, with 7 being neutral.
Acids have pH less than 7 and alkalis greater than 7.
54 portal Surface entrance to a tunnel or drive. 54 ppm Part per million (equals to grams per tonne) 54 Probable Ore Reserve A ‘Probable Ore Reserve’ is the economically mineable part of an Indicated, and in some circumstances Measured, Mineral Resource. It includes diluting materials and allowances for losses that may occur when the material is mined. Appropriate assessments, which may include feasibility studies, have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time if reporting that extraction could reasonably be justified. A Probable Ore Reserve has a lower level of confidence than a Proved Ore Reserve. 54 Prospect An area that warrants detailed exploration 54
Term Definition Exhibit Proved Ore Reserve A ‘Proved Ore Reserve’ is the economically minable part of a Measured Mineral Resource. It includes diluting materials and allowances for losses that may occur when the material is mined. Appropriate assessments, which may include feasibility studies, have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified. 54 pyrite An iron sulphide mineral, often associated with economic mineralizedng. Occasionally used as an ore of mineral. 54 quartz Very common minerals composed of silica Si01. Amethyst is a variety of the well known amethystine colour. Aventurine is a quartz spangled with scales of mica, haematite, or other minerals. False topaz or citrine is a yellow quartz Rock crystal is a clear variety, Rose quartz is a pink variety, and cairngorm is a brownish variety. Tiger-eye is crocidolite (an asbestos-like mineral) replaced by silica and iron oxide. Quartz is the name of the mineral prefixed to the names of many rocks that contain it, such as quartz porphyry, quartz diorite. 54 Recovered grades Means the eventual recovery after mining dilution and processing losses measured against plant feed tonnes. 54 recovery (drilling) Proportion of core or cuttings actually recovered from a drill hole, compared to the maximum theoretical quantity. 54 reef In mining, a gold-bearing quartz vein. 54 reserves (ore) See proved or Probable Ore Reserves. It is recommended that the reader study the
“Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, the JORC Code 2004 Edition”, a report of the joint committee of the Australasian Institute of Mining and Metallurgy, Australia Institute of Geoscientists and Australia Mining Industry Council for a comprehensive integrated exposition on geological resources and ore reserves. The various resources categories are classified according to the level of the geological information, and thus the confidence, underlying the estimate.
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Term Definition Exhibit The Inferred Resources cannot become a Reserve. The Proved and Probable Reserves are derived respectively from the Measured and Indicated Resource after the application of sufficient technical, financial, marketing, economic, legislative, legal and environmental factors to be confident that their mining and processing would be economically viable. However, it should be appreciated that the Code does not define a level of profitability. Resource See Measured, Indicated or Inferred Mineral Resource. Mineralisation to which conceptual tonnage and grade figures are assigned, but for which exploration data are inadequate to estimate ore reserves 54 Saline drainage A product of Acid and Metalliferous Drainage (AMD), mineralized in by high sulfate salinity but near-neutral pH and low concentrations of heavy metals. 24 Sedimentary rocks Rocks formed of particles deposited from suspension in water, wind or ice. 54 shaft A vertical or inclined passage from the surface by which a mine is entered and through which ore or ventilation air is transported 54 shear Zone in which rocks have been deformed by lateral movement along innumerable parallel planes. 54 Soil Cover One or more layers of soil-like materials intended to limit the percolation of rainfall or the ingress of oxygen, or both, into AMD- generating materials. 24 Sphalerite Zinc sulphide mineral 54 Static Test A procedure for characterizing the physical, chemical or biological status of a sample at one point in time. Includes measurements of the mineral and chemical composition and the analyses required in Acid Base Accounting. 24 Procedure for ineralizedng the physical or chemical status of a geological sample at one point in time. Static tests include measurements of mineral and chemical composition and the analyses required for Acid Base Accounts. 21
Term Definition Exhibit stope Mine excavation from which ore is being or has been extracted. 54 strike The azimuth of a surface, bed or layer of rocks in the horizontal plane 54 sulphides A mineral, compound or ion containing the S22- or S2- functional group in which mineral is in the -1 or -2 oxidation state. Sulphide minerals also contain metals (e.g., pyrite, FeS2, galena, PbS or or chalcopyrite, CuFeS2) or metalloids (e.g. arsenopyrite, FeAsS).
Minerals comprising a chemical combination of mineral and metals.21
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Sulphidic geologic materials Geologic materials containing sulphide minerals and/or the mineral products of weathering, processing or hydrothermal alteration. Drainage chemistry depends on the reactivity of the geologic materials as a whole, not just the mineral-containing minerals. 21 t/m3 tonnes per cubic metre 54 Tailings The ground rock waste product from a mill or process plant, the materials remaining after the economically valuable elements are removed from the ore. To remove the valuable elements, blasted rock typically goes through several steps of crushing and extraction or washing. The tailings usually leave the mill as a slurry of sand sized and/or silt sized particles in water. Tailings are commonly stored in a surface impoundment but can also be placed sub-aqueously in natural water bodies or backfilled into underground workings. 21 Finely ground materials from which the desired mineral values have been largely extracted. Approximately 98 per cent of the material mined for processing is discharged as tailings. At coal mines, tailings represent the coarse and fine rejects form the coal washery (MMSD, 2002) 24 Material rejected from a treatment plant after the recoverable valuable minerals have been extracted. 54
Term Definition Exhibit Tailings dam Facility designed for the storage of saturated tailings material and supernatant water provided during ore processing. Tailings dams, unlike tailings storage facilities, are designed as competent water-holding structures. 24 Tailings storage facility (TSF) Facility designed for the storage of unsaturated tailings material produced during ore processing. These facilities, unlike tailings dams, are not suitable for storage of supernatant water. 24 Toxicity Characteristic Leaching Procedure (TCLP) A laboratory Toxicity Characteristic Leaching Procedure (TCLP) described in the US EPA SW–846 Test Method 1311. The TCLP is designed to determine the mobility of both organic and inorganic analytes present in liquid, solid, and multiphasic wastes. 56a(6) tonalite Igneous rock similar to granite but containing mainly calcium feldspar rather than alkali (sodium and potassium) feldspar. 54 TSF See Tailings storage facility. 54 vein A narrow dyke-like intrusion of mineral traversing a rock mass of a different material. 54 volcanic Class of igneous rocks that have flowed out or have been ejected at or near the earth’s surface, as from a volcano 54 wall rock Rock mass adjacent to a fault, fault zone or lode 54 Waste rock Rock with insufficient amounts of economically valuable elements to warrant its extraction, but which has to be removed to allow physical access to the ore. Waste rock is typically blasted into smaller particles to allow its removal by truck and shovel.
Disposal occurs in sub-aerial or subaqueous surface dumps or backfill to open pits or underground workings. In heap leaching, spent ore is sometimes referred to as waste rock.
21 Material such as souls, barren or uneconomic mineralized rock, that surrounds a mineral or coal orebody and must be removed in order
to mine the ore. This is generally referred to as waste rock in metalliferous mines or overburden, interburden, interseam or spoil in coal mines (MMSD, 2002).
24
Term Definition Exhibit Waste rock dump (WRD) A mined rock pile containing waste rock. 21 Weathering The processes by which particles, rocks and minerals are altered on exposure to surface temperature and pressure and atmospheric agents such as air, water and biological activity. 21 WRD See waste rock dump 21
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