Southern Titanium Nl v Heidrich
[2004] SAWC 1
•8 April 2004
WARDENS COURT OF SOUTH AUSTRALIA
SOUTHERN TITANIUM NL V HEIDRICH AND OTHERS
of Dr A.J. Cannon , Senior Warden
8 April 2004
: SOUTHERN TITANIUM NL
: MR COLLETT
: K.J. AND R.A. HEIDRICH
:File No/s: 246, 302, 306, 353, 372, 395, 604, 605, 613, 614, 646, 647, 648, 649, 650, 651, 652, 653 and 654 of 2003
IN THE MATTER OF THE MINING ACT 1971
BETWEEN:
SOUTHERN TITANIUM NL
and
KJ and RA HEIDRICH and others as follows:
Plaint 246: GC Hazelwood dated 19 May 2003 objecting to mining;
Plaint 302: MJ Zerk dated 16 June 2003 objecting to mining. I note that Mr MJ Zerk is part of a partnership of Edwin Walter Zerk, Patricia June Zerk and himself Michael John Zerk known as EW Zerk &Partners. Exhibit Zerk 4 establishes that fact. This was not made known to the court or STNL until near the end of the trial. I joined the partnership as joint parties with the existing party Mr MJ Zerk. Mr MJ Zerk as the registered landowner remains as a separate party as well as a party in his capacity as a partner of EW Zerk and Partners. I find that throughout these proceedings he acted for the partnership, as he continued to do after the partnership was joined, as well as appearing in his own capacity as landowner;
Plaint 306: FQH Rohrlach dated 13 June 2003 seeking an order that no further mining operations be permitted;
Plaint 353: KJ Heidrich dated 16 July 2003 objecting to entry;
Plaint 372: SC Irlam dated 25 July 2003 objecting to entry (I note that Kevin Heidrich with others has purchased this land and the Plaint is amended to KJ Heidrich, R A Heidrich and KRH Malleeview Pty Ltd);
Plaint 395: Mrs Betty Merton dated 3 August 2003 objecting to entry:
And applications by Southern Titanium NL (herein called STNL) to remove the exempt status of land in the following matters:
Plaint 604: STNL relating to MJ Zerk lodged 31 October 2003. For the reasons noted above this is amended to MJ Zerk personally and the partners Edwin Walter Zerk, Patricia June Zerk and Michael John Zerk known as EW Zerk & Partners;
Plaint 605: STNL relating to KJ Heidrich, R A Heidrich and KRH Malleeview Pty Ltd lodged 31 October 2003;
Plaint 613: STNL relating to Mrs Betty Merton lodged 7 November 2003;
Plaint 614: STNL relating to S C Irlam lodged 7 November 2003 (I note that KJ Heidrich, RA Heidrich and KRH Malleeview Pty Ltd has purchased this land and the Plaint is amended to their names);
Plaint 646: STNL relating to GC Hazelwood lodged 2 December 2003;
Plaint 647: STNL relating to FQH Rohrlach lodged 2 December 2003;Plaint 650: STNL relating to John Neldner Nominees Pty Ltd and Richard Neldner Nominees Pty Ltd lodged 2 December 2003;
Plaint 651: STNL relating to JA and JC Berger and MR Grieger lodged 2 December 2003. I am advised that the aspect of this relating to the property in which MR Greiger is involved has settled.
In this judgment I usually call the parties other than STNL the Landowner(s), collectively and individually as the context requires.
I am advised that the following matters have settled on terms confidential to the parties:
Plaint 648: STNL relating to DR and SL Berger lodged 2 December 2003;
Plaint 649: STNL relating to S G Evans lodged 2 December 2003;
Plaint 652: STNL relating to PJ and AL Crouch lodged 2 December 2003;Plaint 653: STNL relating to BR Eatts Pty Ltd lodged 2 December 2003;
Plaint 654: STNL relating to AR Johns and AM Johns lodged 2 December 2003.
I heard the remaining matters together. Of the Landowner(s) only Mr Rohrlach was represented, by Mr Amey, although Mr Beaumond appeared briefly for the Zerk partnership. On the first two days we had a view of all the properties with current applications. Then in 12 days of evidence I heard from each of the parties and the following witnesses:
Gérard Leigh Bosch Senior Geologist, consulting to STNL Dr Peter Swift Consulting engineer in acoustics, Basset Acoustic Clifford Hignett Soil scientist Dr Peter Woods Hydrologist Parsons Brienckerhoff, formerly PPK Peter Jeffrey Fullwood Agronomist PIRSA Colin Gaetjens Registered Valuer Mr David Brian Clarke Company director STNL, geologist Shirley Sylvia Agronomist PIRSA Christopher Peter McDonough agronomist Lindsay Walter Wapper Registered Valuer Neil Matthews Russell-Taylor Advisor to some landowners Graham Hazelwood Landowner Derek Brian Cameron Agronomist Quentin Rohrlach Landowner Raelene Heidrich Landowner Kevin Heidrich Landowner Michael John Zerk Landowner Christopher Richard Neldner Landowner Betty Merton Landowner Helen Tyrteos Registrar of Mines John Berger Landowner Keith W. Pattinson Registered valuer I received the following exhibits.
No. Applicant Exhibit Number Respondent P1 Evidence in Chief Berger 1 Confidential Exhibit
Valuation Report 19-1-04P2 Schedule of Mining Berger 2 Confidential Exhibit
Valuation Report 23-1-04P3 Confidential Exhibit
‘GLB 15’ Deed of SettlementBerger 3 Price Extracts from Australian Wheat Board P4 2 Photographs of Mr Hazelwood’s property taken on the View (3-2-04) Berger 4 Harvest Calculation with Estimated Pool Return P5 2 Farm Gross Margin Guides (2003 and 2004) Berger 5 Confidential Exhibit
3 Spreadsheets from Valuer (Mr Wapper)P6 Aerial photo with pivots marked – Mr Rohrlach’s property Berger 6 Report of Mr J Berger P7 4 graphs from Hydrogeologist Berger 7 CV of Mr J Berger P8 2 graphs of salinity from Hydrogeologist Hazelwood 1 Letter of Offer 9-2-04 P9 Table of drilling positions and map of Heidrich’s property Hazelwood 2 Information of Council Chambers – District Council East Murray P10 Table of drilling positions and map of Zerk’s property Heidrich 1 Report from PIRSA on mine site rehabilitation – Heidrich’s property P11 Table of drilling positions and map of Hazelwood’s property Heidrich 2 Document on sodicity and transient salinity P12 Table of drilling positions and map of Neldner’s property Heidrich 3 Paper by Sadras from Field Crop Research P13 Table of drilling positions and map of Irlam’s property Heidrich 4 6 Photographs – colour photocopies P14 Map of Mr Rohrlach’s property MFI Heidrich 5 CV and submission of Neil Russell-Taylor P15 CV of Colin Gaetjens and report Heidrich 6 Summary of Position P16 Letter from Finlaysons to Colin Gaetjens Heidrich 7 Southern Titanium’s Annual Report P17 Video of Mr Heidrich’s property from July 2003 Heidrich 8 Photo album of photos P18 Photo from video of Mr Heidrich’s property (figure 5, figure 7) Heidrich 9 Video of land and mine site in Victoria P19 Bundle of 4 photos, 3 are aerial photos Heidrich 10 Conditions as part of a lease (not finalised) P20 Strandline Deposit Mining Operations Environmental Noise Assessment 30-4-03 Heidrich 11 Confidential Exhibit
Submission of Mr HeidrichP21 Appendix E of Sound Report with names inserted Merton 1 Submission of Mrs Merton P22 Table of Noise in Courtroom, waiting room and public area Zerk 1 Letter to Mr Zerk from the Commonwealth Bank Zerk 2 Header readouts with notes Zerk 3 Submission of Mr Zerk Zerk 4 Letter from Mr Zerk’s accountant Rohrlach 1 Qualifications of Shirley Sylvia Rohrlach 2 Report on Rohrlach’s potato growing Rohrlach 3 Report titled ‘Landmark’ by Mr Cameron Rohrlach 4 CV of Derek Cameron Rohrlach 5 Report, plan and aerial plan Neldner 1 Confidential Exhibit
Submission of Mr NeldnerIn addition for STNL Mr Bosch tendered a detailed affidavit of his evidence in chief with annexures of the technical reports maps and other information (Exhibit P1). Some of this is repetitive of the Technical Report, which is at tab 6 of Exhibit P1. A separate copy and copy on CD was made available to me (I sometimes adopt the STNL acronym for the technical report namely “STTR”).
Mrs Merton was not able to attend in person. My staff rang her during the case of STNL and she heard the evidence and was able to ask questions and contribute over the phone. She heard nearly all of the Landowner(s)’ cases until she gave her own oral evidence. After that she continued to listen at her choice. Mr Hazelwood came from Sydney and attended for several days. When he had to leave he did not object to the matter proceeding in his absence. He returned for some of the submissions.
I mention that I heard Mr Christopher McDonough, a soil expert from PIRSA, by telephone and at the same time as Mr Cliff Hignett a soil expert called by STNL gave evidence, so that they were able to comment on each other’s evidence as we proceeded. This was an unusual, but effective way of dealing with two experts and they agreed on most conclusions.
With so many unrepresented litigants I allowed some hearsay and irrelevant evidence in without remark to assist the flow of the evidence. Some experts have expressed opinions beyond their expertise. I did not accept Mr Russell-Taylor as an expert, except by experience in hard rock quarrying. I have ignored the inadmissible evidence in making my findings. My findings are made on the balance of probabilities.
The intended purpose of the Act
In dealing with similar cases in the past I have interpreted the Act in the context that it was intended to encourage mining. This is clear from the Second Reading Speeches and debates in both the House of Assembly and Legislative Council on the passage of the Bill that became the Act[1].
[1] Parliamentary Debates South Australia 1971-72, Vol.1-3, 40th Parliament, 2nd session.
In the Second Reading Speech in the House of Assembly, The Hon. G.R. Broomhill said[2]:
[2] Ibid. Vol.1, p.490
(presently there is), “an anomalous situation in which by historical accident some freehold land (probably as much as half) is mineral land and the opportunity for mineral discovery is available on it, whereas other freehold land is subject to procedures that are inhibiting and unsatisfactory.”
In the Second Reading Speech in the Legislative Council, The Hon. A.F. Kneebone (Minister of Lands) said[3]:
[3] Ibid. Vol.2, p.2159
“It is the policy in all industrialized countries to encourage exploration and mining by providing access to potentially mineralised areas notwithstanding the surface rights thereto.”
“The proposal has the effect of placing all freehold land throughout the State on an equal footing regardless of historical mineral ownership.”
“The proposal will enable the Crown to grant mineral exploration rights over areas of land with are presently excluded from effective investigation.”
The Act makes provision for the compensation of landowners and environmental concerns. The Hon. A.F. Kneebone said[4]:
[4] Ibid. Vol.2, p.2159-2161
“it is also considered that the transition and compensation arrangements are equitable to all concerned.”
“The Bill goes to great lengths to ensure that the current climate in the community regarding the conservation of the environment is fully accommodated in respect of mining.”
“A mining lease requires the payment of rent to the owner of the land, requires the payment of royalty, and is subject to such conditions as may be appropriate and specified in the lease in respect of damage to the land, restoration, compensation etc.”
Legal issues
Between 28/2/03 and 24/4/03 each landowner received a notice of entry to allow for pegging of mineral claims. STNL has a miner’s right no 8623. It has undertaken an extensive drilling program. I accept that much of that was done on public roads and where it was done on private property, generally permission was sought of and compensation paid to landowners for drilling done on their property. However, I find that Mr Zerk, Mr Rohrlach and Mr Hazelwood did not personally give permission, nor receive compensation for the drilling on their property. I accept that STNL’s workers on the ground did try to obtain permission of landowners but they were not conscientious enough to ensure in each instance that permission was obtained from the actual landowner, rather than tenants or sharefarmers. These errors are regrettable but in my finding they were the exception not the rule. STNL acknowledges these errors and I accept that STNL intends to enure conscientious compliance with its obligations in the future.
Under the Mining Act 1971 (SA) a landowner has no ownership in the minerals in her or his land. S. 16 reserved these all to the Crown in 1971.
The effect is that a separate title, for mining purposes a mining lease, and for ancillary activities a miscellaneous purposes licence, can be granted under the Act to miners to permit access to minerals in land, even though it may be owned under freehold title. An exception exists under s. 75 for extractive minerals which cannot be the subject of a claim or lease over freehold land. Mr Amey argues the titanium, zircon and associated products sought here are sand and so cannot be mined by STNL on freehold land. Extractive Minerals are defined in s. 6 to mean
“sand, gravel, stone, shell, shale or clay, but does not include-
(a) any such minerals that are mined for a prescribed purpose.”
This definition implies that sand is a mineral. The prescribed purposes in the regulations under the Act are:
“(2) … chemical, cement, lime and glass manufacture, metallurgical flux, refractories, industrial fillers, and foundries, fertiliser, agricultural, jewellery and crafted ornamental uses.”
These are specialised uses for the extractive minerals that take them out of the definition of extractive minerals, for example particular types of fine sand might be used in foundries for the moulds, and other types might be used to blend into garden loam for agriculture. This exclusion is based on the specialised uses rather than a defined particular valuable mineral content of the sand.
Minerals is defined in s. 6 to mean:
“(a) any naturally occurring deposit of metal or metalliferous ore, precious stone or other minerals (including sand, gravel, stone, shell, coal, oil shale, shale and clay); …”
Sand is a mineral. It is only an extractive mineral when it is mined for narrow purposes such as concrete sand, filler on building sites, road works and the like. When it is mined to recover from it minerals such as titanium and zircon, which either form part of the sand or are associated with it, it is not an extractive mineral. The right to mine it lies with the holder of a mining tenement for that purpose, not the freehold land owner.
The Landowner(s) have objected to entry under s. 58A of the Act. In dealing with those objections I also anticipate objections to the use of declared equipment under s. 59. I am required to consider compensation as follows:
“61. (1) The owner of any land upon which mining operations are carried out in pursuance of this Act shall be entitled to receive compensation for any economic loss, hardship and inconvenience suffered by him in consequence of mining operations.
(2) In determining the compensation payable under this section, the following matters shall be considered:
(a)any damage caused to the land by the person carrying out the mining operations; and
(b)any loss of productivity or profits as a result of the mining operations; and
(c)any other relevant matters.(3) The amount of the compensation shall be an amount determined by agreement between the owner and the mining operator or, in default of agreement, an amount determined, upon application by an interested party, by the appropriate court.
(4) The appropriate court, in determining compensation under this section, shall take into consideration any work that the mining operator has carried out, or undertakes to carry out, to rehabilitate the land.
(5) Upon the hearing of an application for compensation under this section, the appropriate court may order a mining operator to carry out such work to rehabilitate the land as the Court thinks fit. …”
Some land is exempt from the operation of the Act. The strands that STNL wishes to mine run under cultivated fields, within 150 metres of buildings worth more than $200 and some bores, within 400 metres of places of residence, and within some townships so under section 9 of the Mining Act 1971 (SA) they are within exempt land. As a point of interpretation, in my view a bore is arguably a well for the purpose of giving rise to an exemption. That determination is not necessary to decide these cases because the exemptions from other reasons are so comprehensive. An exemption can be removed by agreement with the landowner, or by order of the appropriate court, which can be this court up to a monetary limit on compensation of $150,000.
I accept that each of the Landowner(s) is an owner, which is widely defined by s. 6 of the Act, and entitled to claim compensation under S.61 and an exemption, where it lies under s. 9 of the Act. I note that some titles are held under perpetual crown lease but nearly all are freehold title. For my purpose there is no difference, except for s 40 of the Act under which 95% of the rental under any mining lease is returned to only a freehold owner. I am informed that the perpetual leaseholders can convert their titles to freehold and obtain this benefit. I proceed on the basis that this is correct. Accordingly in this judgment I refer to the Landowner(s) title as freehold title without separately mentioning the perpetual leasehold.
An exemption can be removed by agreement or by court order of compensation and upon conditions:
“(9)(3) Where
(a)the person who has the benefit of an exemption under this section, by agreement with a mining operator, waives the exemption; or
(b)the appropriate court, on the application of a mining operator, determines compensation to be paid by the mining operator to the person or persons who have the benefit of the exemption,the land shall cease to be exempt land, but the exemption shall revive upon completion of the mining operations in respect of which the agreement or determination was made or at such earlier time as may be stipulated in that agreement or determination.
(3a) An agreement or determination under subsection (3) may be made upon such terms and conditions as the parties or the appropriate court thinks fit.”
I most recently summarised the law in relation to exempt land in B. Selge Nominees Pty Ltd v Colin Wegener (July 2000) Wardens Court Report SA p.3. In that case I refused to remove the exempt status of the land. That is the law I shall apply. I repeat my summary of the law in that case (at pp.s 7-9).
“The leading case in this area is my own decision in McDonald v. Monaghan and French (1989) Warden’s Court Report SA pps 26-27. In that I point out that different considerations lie to removal of exemptions than in the provisions in part 9 of the Act dealing with conflicts between normal ownership of the land and mining. I said this:
‘Without reviewing the authorities in detail, it is the basic thrust of part 9 of the Act that mining shall proceed unless there is substantial hardship to a land owner and even then, the Warden’s Court has power to mitigate or compensate such hardship by imposing conditions or applying monetary compensation for such hardship.
The situation with exempt land must be somewhat different to that. The legislation recognised that ownership (as defined by the Mining Act) combined with dwelling houses and other uses, set out in s 9 shall be sufficient cause to exempt such land from mining. We should only remove such exemption if conditions can be imposed to ensure that the mining will not constitute an unreasonable imposition on the enjoyment of the proprietor’s estate in and use of the land or alternatively if it is an unreasonable imposition that adequate financial compensation is possible for any such imposition.
Cases such as this will involve a review of any potential interference with the benefits that the land owner enjoys from his title and activities and whether conditions can successfully remove any such interference. If that is not possible the next stage will be to assess monetary compensation and whether that can be adequate compensation for any interference that cannot be removed by appropriate conditions. In an extreme case a miner may be able to proceed if he pays sufficient compensation, in the case of a dwelling house, to relocate the owner in a like dwelling house for the period of the mining, with appropriate attention to accruing capital gain and such other aspects of ownership. Even then there may be circumstances where the particular dwelling house has such unusual attributes that no monetary compensation is sufficient and in that event the court should not remove the exemption. For example a unique heritage property may be so unusual it is impossible to replace by monetary compensation. I only mention these aspects since there are several potential applications of this type and some general guidelines are appropriate. Each case shall of course be determined on its merits and from the decision in each case a set of more detailed guidelines will become clear.’In S.X. Holdings Ltd v. Riddle and others (1990) Warden’s Court Reports SA p.69 at p 106 I said this:
‘The first step is to review the potential impositions on the use of the land as a dwelling house and whether the conditions can remove such impositions. The second step is to assess the monetary compensation that may be adequate to compensate for any imposition that can not be removed by appropriate conditions. In an extreme case where neither conditions nor financial compensation can solve the problem of any unreasonable imposition mining may still proceed if the miner pays sufficient to remove the land owner to a new location in a similar dwelling house. There may be some dwelling houses which are so unique that even this may not be adequate compensation.’
In that case which involved the establishment of a rare earth extraction and processing plant dealing with radioactive material it was my finding that (pps124,125) :
‘In view of the fact that all the impositions upon the occupants of the dwelling houses can not be removed by conditions and those that can not be removed are so difficult to quantify in monetary terms it is my view that this is one of those circumstances where to remove the exemption the miner should be required to offer to remove the land owners by purchasing their premises. Those dwelling houses are not so unique as to preclude this option.’
In Amatek Ltd trading as Rocla Quarry Products v.Gifford and Williams (1994) Warden’s Court Reports SA, p.67, I dealt with a proposed sand mind within 400 metres of dwelling houses. In that case I imposed conditions to minimise the impact on the house owners. I found this (p.74):
‘There will remain a significant impact on the enjoyment by the owners of the amenity of their property. On the evidence, in addition to the disruption of their personal enjoyment, it is undeniable that they will suffer a loss in the capital value of their land during the period of the mining. Amatek make the point, and I accept it, that once the mining is completed the amenity will return to its present state and then the owner will receive a capital benefit, presumably of the like order of the diminution. However that is not the point. The point is that these present owners enjoy a statutory exemption from mining within the 400 metres of their dwelling house and if I allow it to proceed that mining will reduce the capital value of their property. They should be compensated for that and if that results in a later windfall either to them or to a purchaser from them so be it. The loss in capital value is a real loss whether or not it is realised by sale.’
In that case I ordered that the exemption could be removed upon compliance with the conditions set out in the development program and payment of a valuer’s assessment of the diminution of value.
Most recently in this line of cases, Warden Gurry had occasion to rule in the matter of Gambier Earth Movers Pty Ltd v Rhondda Truscott (1999) Warden’s Court reports SA 29. In that case Warden Gurry removed part of an exemption to allow the extension of an existing limestone quarry. I note in that case the quarry was in existence and had been for many years and although quarrying was involved the first removal of rock was by ripping rather than explosives.
Mr Cole for Mr Wagener has urged that the tenor of these authorities gives too much encouragement to miners and is at risk of encouraging too many applications to remove exemption. I know of all the cases in the Warden’s Court. Since the decision in Monaghan v. French, the above cases and the one I am dealing with presently are the sum total of all contested cases. In addition I am aware of two other cases where the parties have agreed to terms and conditions. The purpose of the Mining Act 1971 (SA) is to encourage mining and the Warden’s Court should allow mining to occur where it can be done so, having proper regard to the rights of owners of the land in the terms of ownership defined by the Mining Act 1971 (SA). Section 9 specifically deals with the imposition of the conditions and payment of compensation and to give it meaning, the court must consider proper ways of removing the exemptions from mining in s.9 to allow mining to occur. I see no reasons to resile from the approach in the authorities set out above.
However, as I stated in Monaghan and French, each case will depend on its particular circumstances. These are difficult cases involving attempts to reconcile competing interests and rights to the same area of land. The factors the court will take into account in dealing with these will depend on the unique circumstances of each case and the general principles that can be extracted will develop as different circumstances arise.”
The “appropriate court” is defined in s.6 to mean:
“(c) if proceedings do not involve a monetary claim, or a claim for more than $150,000- the Warden’s Court;”
I have jurisdiction in each of these matters to fix conditions, at large, and to make monetary awards of up to $150,000 in relation to each applicant and separate awards up to that limit under both s.61 and s.9. It may be that I can fix conditions that have financial consequences, which are properly construed as conditions rather than an award in respect of a monetary claim. It follows that the total monetary effect of the conditions and monetary sums I award might exceed $150,000 and I might still be the “appropriate court”.
My task is to consider the mining proposal and its potential impositions on the use of the exempt land and whether the conditions can remove such impositions. I then need to assess monetary compensation that may be adequate to compensate for any imposition that cannot be removed by appropriate conditions. Once having done that I need to decide whether the combination of conditions and compensation is sufficient to allow the removal of the exemption.
Mine is not a task of dealing with the wider ecological implications of the project. The evidence about the freehold owners’ rights necessarily covers some of these issues. My task is not greater than to ensure that if the exemption is to be removed it is on conditions that protect, and for compensation that is sufficient to compensate disruption to, the freehold interest.
The Mining Proposal
I briefly summarise the project. STNL has identified a series of beach strand lines each up to 30 km long, with a resource of 69m tonnes of Titanium, Zircon and other heavy mineral sands, which run parallel in an ESE-WNW orientation through the Mallee region in the vicinity of Mindarie and Halidon. These would have been coastal deposits 2 to 5 million years ago when deeper seas inundated the Mallee area. The mineral deposits average approx 85 m wide under a sandy and clay overburden of between 3 and 20 metres, and well above the water table.
STNL intends to initially mine three strands they have named Mercunda North, Lone Pine North and Halidon. It is anticipated that these three strands will provide ore for the first 4 years of operations (p. 11 STTR). Proceedings dealing with some or all of those involved in Mercunda North and Lone Pine North were commenced in the ERD court and have settled. 15 landowners in those applications have signed agreements with the company that will permit it to proceed. STNL’s potential financiers have insisted that the titles for future mining be secured. This generated these applications firstly on 31 October 2003 and more on 2 December 2003 to secure titles over the strands known as Halidon, Mindarie A1, Long Tan, Mindarie C and Amiens. STNL has now signed 25 of the 33 Landowners in the second group of strands. Mining in the matters before me is likely to commence on Mrs Merton’s land on the start of the Halidon strand in mid 2007, about three to three and a half years from now. The next landowners with matters before me to be affected will be Mr Rohrlach and Mr Hazelwood, both with properties on the Halidon strand. STNL regards this matter as urgent. It asserts that the project may be compromised if the right to mine these areas cannot be assured promptly. Accordingly I listed this for trial in February 2004, as soon after harvest as I could, and I have given it priority over other matters in my list. The trial continued for a month.
I also note that it is intended that further strands as yet not identified will be mined after these are finished. Mr David Clarke, a director of STNL, pointed out that it is the nature of thing that the most lucrative future strands are more likely than not to be in an area not yet explored, and that means away from the properties of the Landowner(s) here, but because exploration is incomplete, STNL can give no definite predictions where it will seek to mine when these strands are finished.
The mining technique is described in STTR Ch 4, Mr Gérard Bosch’s Affidavit at paras 40- 45 and some modifications were outlined by Mr Bosch in oral evidence. It involves a mobile pit some 300m long and 250m. wide. The width will vary with the depth and width of the ore body. The deeper it is, the wider the pit to allow a safe batter or angle on the sides of the pit. Mr Russell-Taylor who assisted some of the Landowner(s) for some of the trial asserted that the batter of 55 degrees would not be safe and would need to be a greater angle, or have benching at suitable intervals or both. Mr Russell-Taylor’s relevant experience is primarily in hard rock quarrying and I am not convinced that is a relevant experience for this operation in sand and clay. In the end he decided not to give evidence. A safe batter angle will be required by occupational health and safety and requirements and the Mines and Works Inspections Act 1920 (SA). This is not an issue for the exemption issue save that the wider the disturbed area the greater any compensation which is calculated on a per area basis.
Prior to mining a detailed profile of the topography and the soil profiles will be taken. Topsoil and an agreed amount of subsoil (I return to this topic under the heading Soil restoration below) will be stripped with a land plane and stockpiled on one side of the pit. The rest of the subsoil and overburden down to the resource will be excavated at the rate of about 6,000 tonnes per hour and moved by conveyor to the rear of the pit. It is predicted that the pit will progress on average at about 35 metres per day. The ore will be moved by conveyor to an ore concentration plant. In the original proposal this plant moved along the bottom of the pit. Now it is intended to have conveyors up to 750metres long so it will be constructed 750 metres ahead of the pit (and to the side) and when the pit has moved to the limit of conveyor range past it (750metres) the plant will be pulled apart and moved ahead again. The concentration plant is a liquid separation method without the use of chemicals other than detergent. Clays will be washed from the ore and returned with the overburden to the back of the pit. These clays are associated with arsenic and chrome. I shall return to those under the heading Dangerous by products below. What must be in place is adequate assurance of rehabilitation and compensation for disruption to the farmers’ income earning by the mining. I return to this below. Where the pit passes close to a house it may need to be narrowed regardless of the resource width and depth at that point.
Each strand will need a haul road, power line and water pipeline. The ore concentration plant and associated conveyors will need a 35Kva transmission line. Water will be obtained from a series of bore fields discussed below and piped to the ore concentration plant and the pit. The mining operation will run 24 hours per day. It is hoped to process between 3 million and 6 million tonnes per annum of ore to produce 250,000 to 300,000 tonnes of dry high metal concentrate per annum (STTR p.13). This will be carted along the haul road in about 19 semi-tipper loads each 24 hours doing the round trip to the Mindarie plant and returning about 100,000 tonnes per annum of unwanted material from the Mindarie plant for blending back with the overburden into the pit (STTR p.12 and p.57). The haul road will also be used as a service road to access the mining operation.
In addition there will be a temporary mine access route to transfer the equipment from a completed strand to the next one. This should only be needed for a few days.
The importance of the project to the State and the region
The mine is expected to be the sixth biggest zircon mine in the world producing approx 122,000 tons of zircon and titanium products per annum worth about $53 million. This will return a royalty of up to 2.5%, which is $1.3m per annum. It is expected to create the equivalent of 72 fulltime jobs and another 35 contractors. If the mine commences it will contribute a significant economic benefit to the region and to the State.There will be a direct financial benefit to the Landowner(s) by way of rental payable under any mining leases. Under s.40 of the Mining Act 1971 (SA) ninety five percent of the rental payment will be paid to the landowner(s) proportionally to the area of their land subject to the mining lease. STNL has undertaken to hold each lease for at least three years to guarantee that return for that time. I see nothing in s.9 to suggest I should take that payment into account in determining the proper basis on which an exemption should be removed. I do not take it into account for that purpose. Under s. 61(2)(c) in fixing compensation for economic loss hardship or inconvenience for the mining operation I am required to take into account “any other relevant matter” and the amount paid for rental could be such a matter. However, STNL submits that I should not take it into account in fixing compensation but I should in assessing whether the conditions and compensation as a whole are sufficient. Obviously the Landowner(s) would prefer that the compensation not be notionally reduced by any rental that will be paid. The Mining Regulations 1998 provide a rental of $29.50 per hectare (r.44 and Schedule 3). Although I will not reduce the compensation to allow for that I shall take the return of approximately $28 per hectare (95% x $29.50) to the freehold owners into account in assessing whether the totality of the conditions and compensation are sufficient to warrant removing the exemption.
The competence of the operator
Mr David Brian Clarke, geologist and company director of STNL gave evidence of the competence within STNL. Details of the directors are listed in the annual report for 2003 which was tendered. This evidence was not seriously contested. From it I conclude that the company has substantial expertise in business, law, finance, marketing and specifically marketing of the minerals to be recovered, geology, and mining and mining engineering. Tangible evidence of the company’s commitment is its investment already of somewhere over $16m. There is Australian experience of mining these minerals. Titanium is mined in WA, NSW, QLD and there is a small mine in VIC.
There is no guarantee of this project proceeding but I accept the company is bona fide and competent to undertake the project if the required approvals are in place and sufficient finance is available to it.
Such a large and complicated project raises many issues of disturbance to the Landowner(s)’ interests. Despite substantial planning by STNL much of the detail of the necessary processes to manage the potential problems are still at the concept stage. My task is to consider appropriate conditions for matters where no detailed planning has been undertaken in relation to activities that will not occur in some instances until a decade away. I am told this is a situation imposed by STNL’s financial advisors. It makes my task difficult and I need to frame my orders to take account of these unusual features of lack of clear proposals and long time frames.
Soil restoration
This is the most important issue for the Landowner(s). The quality of the soil is central to their ability to earn income. The general description of the area is in Appendix G of the STTR at page 6. The point has been made that there is substantial soil variation and this is supported in this general description. Mining will be an irremediable damage to the freehold rights in cultivated fields unless the soil can be returned to a productive level at least equivalent to the present. I am told it can be and indeed that by mixing some clay with the topsoil it can be made more productive. There has been a test pit dug on Mr and Mrs Heidrich’s land and the restoration of that has been severely criticised. Partly because of that perceived failure the promises of restoration of the soil are viewed with suspicion; as mere blandishments to encourage farmers to grant exemptions. To discuss this I need to explain some terms.
Definitions
Sodicity of the clay. A sodic clay has sodium particles which causes them to resist clumping. In water the clay explodes into fine micro particles. These micro particles block the structure of the soil and reduce root penetration at depth. Such clay is common in the subsoil in the area affected by mining. Treatment with Gypsum will reduce sodicity and improve the structure of the soil. An ESP (Exchangeable Sodium Percentage) of more than 25 shows a highly sodic clay (Exhibit 1,Tab 3, page 7 second dot point).
EC value: Electrical conductivity- the higher the conductivity the higher the salt content.
pis a measure of the acidity or alkalinity of a solution, defined as the logarithm to the base 10 of the reciprocal of the effective concentration of hydrogen ions (in moles per litre)[5] A level of 9.3 in water is highly alkali and denies nitrogen to the plant inhibiting growth.
[5] Little, Fowler and Coulson, The Shorter Oxford Dictionary third edition (1973) OUP 1973, Addenda.
Boron: in excess of 10ppm starts to be a problem for crop growth and gets progressively worse (Exhibit P1 tab 3 recommendations, page 3).
Mr Hignett described sand as “crap soil” because there is nothing to stop the fertiliser, which washes straight through the sand so it is no longer available to the plants.
The Trial Pit
Mr Clifford Hignett gave advice to STNL in relation to the restoration of the test or trial pit. He acknowledged that initially the pit was not restored in a satisfactory manner (Tab 3 Exhibit P1). In the growing season in 2001 this was not evident because the rain was well distributed, the compacted clay trapped the rain in the topsoil and it was sufficient for good growth so the plants did not depend upon access to subsoil moisture. In the drought of 2002 the crop over the mine affected area failed more than the rest of the surrounding crop. The affected area extended beyond the trial pit. He concluded that in this part the subsoil clays had been compacted by the bulldozer running over them. In the very poor rainfall of the season in 2002 successful plants depended on deep root development to access subsoil moisture. Compacted clay prevented root access to the subsoil moisture. Mr McDonough agreed this may have been a cause and speculated that loss of organic matter could also be a cause.
An attempt to remedy the problem was made under Mr Hignett’s direction by ripping the soils with alternate long and short tynes to bring up clay and create fissures. At the same time gypsum was added to reduce the sodic effect. It is his view that this has been successful to remedy the soil over the pit. This is disputed by Mr Heidrich and to some extent by Mr McDonough.
The next crop was the 2003 season. Mr Heidrich was concerned about the germination rates. On 3 July 2003 Mr Hignett attended and recorded video (Exhibit P17) and made other observations. His report on this is at Tab 7 to exhibit P1. Mr McDonough took some samples of the crop at the end of the season on 2 December 2003. His report, which he prepared on unreasonably short notice is Heidrich Exhibit 1.
Mr Hignett’s view is that although there were poor areas of crop in the pit area they were caused predominantly by a big sand blow in about a week after sowing on 29 May 2003. Mr Heidrich uses an advanced technique of setting high ridges with the seed in the valleys, thus trapping rain near the seed. Mr Hignett says the increased clay preserved the ridge and the hollow has filled with windblown topsoil- and buried the seed too deep. He says the observed yellowing of growth tips was due to the lack of light. The photos in his report show up to 16cm of soil above the seed: 8cm original depth and another 8cm blown in. Another photo shows that with only 2cm of extra sand on top the plants were successful. This was taken only one metre from the unsuccessful plants and both are in the worst area of the pit.
There were some visibly deformed shoots. He speculated that these could have been caused by active herbicide due to lack of organic matter, and lack of rain in the extraordinarily bad year in 2002 with a consequence of some residual herbicide from the previous season being left in the topsoil. In his view increased biological action and rain will remedy this. His conclusion is that the problem was wind blown sand not any problem with the soil.
Mr McDonough concludes that the rehabilitation has affected the ability of the crops to extract moisture from the soil, in some areas beneficially and another areas adversely. He speculates that the adverse areas could be due to having too much clay of high sodicity and high Ph.
In relation to the test pit I note that Mr McDonough was not able to identify a clear visual difference across the boundaries of the area of the pit. He noted that there was variation in crop of growth both in and out of the mine site area and that this type of variation is normal in that area. I note that aerial photos taken in January 2001 indicate a substantial variation in apparent growth over this area before the pit was dug. The videos showed that there was marked variation in the lushness of crop growth in areas quite remote from the pit. This of course makes it dangerous to identify an area of poor growth within the pit and conclude that the poor growth was caused by the rehabilitation. Mr MacDonough took crop yield samples from 26 points on a transect starting outside the pit area, across the pit area and on the other side. These showed crop yields varying in both. There is no evidence from the samples from the transects to support a view that there was an overall lesser yield in the pit area compared to the area outside of it.
There is an aerial photo taken at an angle of the crop in 2003. For reasons I expressed in transcript I reject any attempt to draw inferences from colour variance in this photo.
The conclusion is that on average the yield from the rehabilitated pit area in 2003 was not proved to be different on average from the surrounding paddock. In some areas the yield has improved and in some areas it is markedly worse. There is good evidence to suggest that the rehabilitation has caused a decline in yield in those areas that were markedly worse. I made the following summary of differences between soil samples taken from the pit area and soil samples taken from the surrounding area. The method of taking soil samples is described in evidence and I accept it as sufficient for this comparative purpose. Below is a table of the results (drawn from Exhibit P1 Tab 8 and the evidence).
Table of soil sample analysis from the trial pit area and a nearby good area
Good area Trial pit Comment Ph in water 7 9.6 Pit is high Phosphorous 11 11 Organic carbon 0.20 0.15 Pit is 25% less Nitrogen 6.28 10 This may indicate improved fertiliser retention with clay Buffer index 8.2 60 Better but still low Potassium 70 200 This may indicate improved fertiliser retention with clay Magnesium 0.47 4.9 Better in pit Cadmium 1.5 16 Worse in pit- can be harmful Elec conduct 0.05 0.29 Increased salinity in the pit which should wash out Cu 0.04 0.14 Better in pit zinc 0.45 0.84 Better in pit Boron 0.34 5.10 High in pit. Boron inhibits growth and cannot be remedied Cat exchange 2.2 23.5 Shows more clay Sodium 3.5 8.9 Salt- should wash down Dispersion 0.0 14 High indicates high in mg The Cat exchange shows the higher levels of clay. In principle this is a good thing but the clay brought to the surface has high sodicity and has brought salt, boron and cadmium into the root zone. The salt will leach down out of the root zone. There was no suggestion that the increased cadmium level was dangerously high. However the boron is a serious concern. It has an adverse effect on plant growth and hence crop yields. I note that these figures are an average over the area. My conclusion is that some of the bad patches in the rehabilitated pit area were caused by high concentrations of boron and salt brought up with the clay. There are indications of improved fertiliser retention due to the increased clay and this would also increase water retention by the topsoil.
In evidence both experts agreed that there is potential to increase crop yields from the restored soil. The present topsoil is generally sandy. With good clay properly applied by volume of about 10% it will retain more moisture and fertiliser than it did before. In average and good years of rainfall this should improve the crop yield by up to 20% but there is no guarantee of that. It is done in other areas by delving with tynes into the subsoil to bring the clay up, at a cost of about $500 per acre. It was suggested it would be done in the Mallee if higher rainfall gave greater potential for higher yields. If the clay has high sodicity that adverse effect can be reduced by an appropriate application of Gypsum. They both agreed that done properly, rehabilitation of the soil-after mining to achieve equal or better on average crop returns is achievable.
I accept that adequate rehabilitation is possible. To achieve adequate rehabilitation it will be necessary to carefully identify the characteristics of subsoil clay and ensure that subsoil clay that is adverse to crop yields does not come close to the root zone in the rehabilitated soil. If Boron is more than 10ppm and Ph more than 9.3 the clay should be treated as bad clay. It is possible to enhance the potential yield of the soil by including a percentage of the order of 10 percent of good clay in the rehabilitated topsoil with an appropriate level of Gypsum to remove adverse effects of sodicity. This would seem to imply the necessity to remove the sandy topsoil with about 10 percent of good clay and store that in one area. A substantial amount of additional good clay should also be stored separately from the balance of the overburden. Then the rest of the overburden can be shifted without concern for its particular order, save in relation to the dangerous items discussed below. Then the good clay can be placed on top of the undifferentiated overburden. Last the topsoil with an appropriate addition of good clay, Gypsum and other advantageous additives can be put on top. This will ensure that clay that is adverse to crop yields is not brought up into the root zone. Mr Berger made a good point in relation to this. Rehabilitation should not proceed on the basis that farmers will only exercise their freehold rights over cultivated fields by growing wheat, barley and other shallow rooted crops. Farming in the future may address the leaching of salt towards the aquifer consequent upon shallow root crops failing to capture most of the rain by the rotational use of deeper rooted crops such as Lucerne, or some other strategy not yet contemplated. This possibility will be removed if clay with high boron is placed in the upper zones of the soil profile. This is also important in growing root crops such as potatoes, which I mention separately below
The company will need to use equipment for to remove the topsoil that has a high capability to collect the topsoil accurately. It will need to ensure that machinery operators are experienced. In an operation that continues 24 hours a day it will need to consider whether it is possible to achieve accurate removal of topsoil and good clay in the dark and if not, limit that task to daylight hours. STNL agreed to this limitation in its closing address.
The fact that the average yield of the poorly rehabilitated pit in the good year 2003 was equivalent to the yield in areas surrounding it, is a positive sign that rehabilitation can be achieved to return to the soils to a state to be able to yield equal or better than the present yields. However, it would be quite wrong to regard the trial pit as sufficient rehabilitation. There are patches of soil that are adversely affected, probably by high boron and pH content, brought to the surface with clay that is highly adverse to plant growth closer to the surface, as a result of the undifferentiated handling of subsoil.
It is important to note also that different soil profiles will have different effects in different seasons. An example of this was seen in the test pit, which grew a reasonable crop in 2001 but failed in 2002. Mr MacDonagh pointed out that whereas clay allows the soil to retain more moisture, in some circumstance it may allow less moisture to be available to the roots of the plants. What works well in a good wet season may work badly in a poor season. By holding water nearer to the surface in dry spells clay may increase the loss of water by evaporation.
I also conclude that different rehabilitation techniques may be necessary in areas of different soil type. It may be a bad idea to add clay to a soil with adequate clay content already. Where bad clay is identified immediately beneath the topsoil restoration may be more difficult. I note that Boron at a concentration exceeding 15mg/kg is as little as 25 to 50cm below the surface in some areas crossed by the strands according to the map in Figure 13 in the STTR. In view of the variation in the soil types soil restoration must be done in accordance with good expert advice and in consultation with the landowner(s).
I also mention some other important issues. Two arise from the light nature of the topsoil, drying weather and strong winds that can occur in the Mallee District. The topsoil must be stored in a manner that it is not lost in a strong wind. When the soil is replaced steps must then be taken to ensure that the topsoil is not blown away. At some times of the year it may be sensible to sow a deep rooted crop like rye or a cover crop to protect the topsoil. The topsoil must be stored in a manner that the organic content is diminished as little as possible and attention given to replacing organic content where that is necessary. The organic matter content is a crucial factor in the fertility of the soil. The manner of achieving these protections will vary according to the time of the year when mining occurs, the nature of the season and other factors.
Another important issue is the compaction of subsoil by traffic of excavation machinery, mobile conveyors, the ore concentration plant and by trucks and other vehicles using the haul road. Mr Hignett prescribes ripping for these areas. This will be an adequate remedy in most areas but will need to be done but with attention to the dangers of pulling up bad clay. Detailed soil sampling will be needed and the results will need to be retained. In areas where Boron is close to the surface it may be necessary to avoid that area or take special measures to ensure that it is not left with compacted subsoil clay, which could not be ripped with tynes, thus introducing the Boron into the topsoil layer. Ripping may not be a good remedy in some places.
I note that clause 3.6 of the first mining lease has clauses dealing specifically with soil rehabilitation. The Mining and Rehabilitation Program (MARP) requires the development of a Land Management Plan (3.1(c)(v)).
I do not intend to be prescriptive about methods of rehabilitation. It should be obvious from the above discussion that it is not possible to prescribe a one size fits all rehabilitation program that will work. It is not possible to extrapolate from one test pit, where the rehabilitation was not ideal, to all the varied soil conditions that will be encountered. It is essential that the adequacy of the soil restoration be established by proper testing. Careful testing of soil profiles will need to be taken before the removal of soil and the results kept and made available to the Landowner(s). Crop yields comparing the rehabilitated area to equivalent adjoining areas will need to be taken to ensure that the rehabilitation has worked. The evidence is that the success of rehabilitation will not be certain after the first season. The test pit showed that a poor restoration can be masked by a good season. To avoid arguments there needs to be a clear prescription of what is deemed to be sufficient rehabilitation. To allow for seasonal variations, but to prevent the assessment being too long, I shall fix three years as a suitable time for which the adequacy of soil rehabilitation should be assessed by taking comparative yields.
With some soils where bad clay is close to the surface there is a real possibility that rehabilitation may not return the soil to its previous level of yield. This is not admitted, but it should be anticipated in these orders. If such an event occurs, as an exemption issue, it should be accepted up to a permitted percentage of yield, say ten per cent. It should be dealt with by way of compensation rather than further attempts at rehabilitation. Such compensation should be payment of an amount, which if properly invested would yield a return equal to the value of the reduced yield. This then returns to the freehold owner value of the yield lost and the notional capital loss consequent on the decline in yield. It financially places the Landowner(s) in the same position as if the decline in yield had not occurred. I have no evidence or submissions on this point. I shall hear from the parties before a final prescription. I have included a suggested prescription in the draft orders I intend to give to the parties on a confidential basis with this judgment. Fixing compensation now for this possibility will also assist an assessment of the sufficiency of any bond.
This prescription puts a clear financial condition in place to deal with a loss of yield that I am told will never eventuate. If it does eventuate my prescription gives clear protection to the Landowner(s). It does not relieve STNL of the primary obligation to rehabilitate the land. As between the Landowner(s) and STNL it provides a remedy for a small failure. Restoration conditions in the mining lease conditions a collateral obligation between STNL and the Minister.
STNL is proposing to pay the Landowner(s) to add fertiliser, seed and other appropriate additives to the replaced topsoil at what is said to be a relatively generous rate per hectare. My impression is that this is a backdoor way of offering some extra compensation to the Landowner(s) in the form of generously paid work. This is an unsatisfactory mixing of roles on soil restoration, which is the most important issue. STNL must accept responsibility to ensure this work is done properly, and under the conditions I will impose to remove the exemption, it may have to pay compensation to the person doing the work if it is not. The management of the soil rehabilitation must be clearly a task for STNL, rather than being used as a back door way to provide additional compensation. The mixing of the roles and responsibilities of the parties on this crucial issue creates unnecessary dangers. If STNL, at the time, wishes to contract with the Landowner(s) to do this work, that is a matter for the parties. I will not provide for that in my orders.
In conclusion the soil can be rehabilitated to a satisfactory level. In one sense the Landowner(s) in the cases before me are advantaged because they are in the second group of mining activity. The earliest it will commence will be on Mrs Merton’s property in mid 2007, based on a start up at the end of this year. I am told some soil rehabilitation tests are planned later this year. That may be available to test for the 2005 season. If the start up occurs in the beginning of 2005 then the first rehabilitated soil over a pit might be ready for a crop in autumn that year and should definitely be ready for planting with a commercial crop in the autumn of 2006. That crop should be reaped and another growing by the start of any work on Mrs Merton’s property in mid 2007. The experience of some preliminary testing and one full crop and the progress of a second should be sufficient to give a good indication whether rehabilitation has been properly carried out, before mining commences on the first property before me. I shall impose conditions to ensure that the company demonstrates it is able to achieve satisfactory rehabilitation.
Mounds and Depressions
The need for these is discussed at para 109 of Mr Bosch’s affidavit, Exhibit P1 and the STTR at 6.11.2. After the pit is started the overburden from the front goes straight to the back, but to commence it is necessary to excavate up to 370,000 cubic metres of dirt. It is prohibitively expensive to move this overburden kilometres to fill the pit at the other end. Hence there will be a mound originally modelled at an area as large as 2.2 hectares with footprint of 90 metres radius and height of 7 metres at the commencement of each strand and a similar size depression at the other end. Now that the ore concentration plant is alongside the pit there is no longer a need to construct a very shallow access ramp down which to drive the plant and it follows that less dirt will need to be placed in the mound. Mr Bosch says that STNL has now settled on a mound and depression of maximum height or depth of 5 metres and a maximum slope of 1:4 which I am told is a slope of 14 degrees from the horizontal.
I identify the following problems with the mounds and depressions. This is undulating country so visually they may not be too intrusive. However the farmers use wide equipment, especially spray booms and they can only accommodate a low gradient. It will be better for the lower volume now anticipated for the mound in the same area with the height (hence gradient) reduced. Another problem is that the top soil removed from a flat area must be spread more thinly over a mound or depression occupying the same area. There is an inevitable loss of topsoil depth for the mounds and depressions. However this is a relatively small matter. On a mound of slope 1:4, the extra length of topsoil is of the order of 3%. I heard no evidence about the depression and it would seem inherent that it may have an underlay of bad clay that may not permit adequate rehabilitation. I should permit inadequate rehabilitation of mounds and depressions if adequate compensation is paid and if the soil is stabilised with native vegetation. If this occurs a one off payment for the loss of the arable area should be assessed. I suggest that a capital payment of twenty times the actual gross margin on an adjoining area might be sufficient compensation. I calculate 20 times because if that amount of capital is invested at 5% it will return that gross margin for as long as the capital remains intact in real terms (assume an actual gross margin of $185pa: 20x$185x5%=$185). It would need to be invested in an inflation proof asset. This should be available at 5% for a long term investment. I have arrived at this formula without submissions from the parties. It has the status of my view of a sensible suggestion. After any submissions on this point I shall arrive at a final formula for the event of ineffective rehabilitation of mounds and depressions.
Of the parties before me Mrs Merton will have a mound, Mr Zerk a mound, Mr Neldner a depression and Mr and Mrs Heidrich a mound in the property previously owned by Scott Irlam. A gap originally planned in the Long Tan strand where the ore resource runs out on Mr and Mrs Heidrich’s property can now be avoided with the longer conveyors and by narrowing the pit to reduce the cost of running it straight through. I proceed on the basis that the only mound and depression on the Long Tan strand will be at the ends (which are not in matters before me).
I also note that Mr Hignett said that the mound should not have excessive sodic clay in it to avoid run off. This recommendation will need to be complied with. Again if the mound cannot be rehabilitated then it should be stabilised with vegetation and adequate compensation paid.
In note the first Mining Lease provides in clauses 3.6.2 and 3.7 for appropriate sculpting and forming of the mounds and depressions.
Ground water
The mine will use substantial ground water, mostly in the wet plant. The original proposal has been modified to increase total water usage from 3.160 ML/pa (Mega litres per annum- STTR p.16) to 4.292 ML/pa. The increase is due to more use in the wet plant operation. Only about 160ML/pa of this total is for wetting down and ancillary purposes.
The mine will draw this water from the Murray limestone aquifer. It is about a 100m deep. Most of the water came from wetter periods 20,000 years ago. It can be replenished to some extent from the deeper Renmark aquifer which is at slightly higher pressure, and from rain, but this is problematic due to accumulated salinity in the top soil, which is discussed below. The water quality varies from low quality along Victorian border, better in the middle and then saltier to the North and West. In the south part of the mining area the water has 1500 mg of salt per litre and in the west and north up to 3000 mg of salt per litre
I refer to Mr Fred Leaney’s report at tab 3 of Exhibit P1. Mr Leaney already had a model for this aquifer and Dr Peter Woods asked him to adapt it to the mining situation. Dr Woods has recalculated the conclusions for the increased water usage. His model was used in a central area of a large aquifer so in his view it was not necessary to individually calibrate it for the increased use. I accept that. However, it is only a model and it will need to be tested to ensure it accurately reflects reality.
There is another change that came out in the evidence. The original plan with a moving ore concentration plant had a series of bores alongside the pit progressively used then capped as the plant moved along. The results reflect this assumption. However now that the ore concentration plant will be in a series of fixed locations about 1.5km apart a series of separate bore fields at about 1.5 km intervals alongside the pit are planned.
Two issues here are draw down and salinity.
Draw down
In the Hundred of Brandon where most of the Long Tan and Mindarie A(1) strands are situated there is no restriction on water use. East of that Mallee Prescribed Wells Area (MPWA) licences access to the aquifer and water use is restricted to a maximum permitted extraction rate of 52,781 ML/pa. This is divided into the individual Hundreds in the area, so that each Hundred has a Permitted Annual Volume (PAV). This has been allocated but in 2000 it was estimated that less than half of this was being used (STTR p.16). In the Hundreds of Chesson and Mindarie where the bulk of the eastern parts of the strands are situated 100% of the PAV had been allocated in 2002 (STTR p.16). This means for landowners in those Hundreds with an allocation, an alternative ground water allocation is not available unless it can be purchased or the relevant authority allows the PAV to be increased to accommodate it. The revised use of water by the mine is 4,292 ML/pa. This exceeds the permitted total annual use per Hundred in the MPWA. If this mine continues for 10 years using 4,292 ML/pa it will consume 42,920 ML/pa in its life and if further resources are discovered to allow mining to continue for 30 years, as is hoped, it will consume 128,760 ML. To put this in context the total resource in the aquifer is estimated to be 100million ML. I suspect that figure is misleading because nothing like the total resource would be conveniently available for use from bores.
Some of the Landowner(s) suggest it is not sensible to allow such a high volume use of the aquifer, and I have noted that within the MPWA it is beyond the limit for each Hundred. The sensible use of the valuable resource of underground potable water is not an issue before me. My duty is to impose conditions to protect the access of the landowner to water or compensation for loss of access.
Draw down, which is the lowering of the top level of the aquifer, in the Mallee so far is as much as 2 metres. The STTR at p. 64 predicts the draw down effect and this is shown graphically (corrected for the increased use and the higher impact with the borefield model) in Exhibit P7.
(Diagram not available in this formt)
The drawdown is only in the direct vicinity of the mining strands. Draw down half a kilometre from the borefield is as much as 4 metres and after one year is predicted to be 1.5 metres reducing to less than 0.5metres in a little after 3 years. The further away, the less the initial draw down, but after 3 years the effect is similar up to 2 kilometeres away (about 0.5 metre) and reduces with time. Five kilometres away and more there is little effect. The miner gives undertakings to deepen existing bores and improve pumping equipment to remedy any problems that mining may cause to existing landowner access to water. The evidence is that the quality of water is as good at deeper levels in the aquifer. The borefields will increase draw down in their location, but can be located to minimise disruption to existing water points. The evidence of the extent of the aquifer is that if these undertakings are carried out the Landowner(s) can be assured of the maintenance of their existing entitlement to water. They depend on the accuracy of the modelling. Careful monitoring of actual effect on the aquifer will be needed. The first mining lease requires this as part of the Mining and Rehabilitation Program (MARP) (clause 3.1(c)(vi)) and in particular provisions in clause 4.1(a).
Salt
The water in the aquifer originated from a wetter time 20,000 years ago. Then the climate dried and a most efficient group of plants known collectively as the mallee scrub caught all the rain that fell. It is estimated that less that 0.1mm of rain per year gets past the root system of mallee scrub. I accept, with surprise that rain is to a very small extent salty. The salt comes from sea spray. The mallee scrub concentrated the salt from 20,000 years of rain in the upper soil. With the clearing of the mallee scrub crops are less efficient at capturing the rain. The equivalent of 10mm of rain soaks past the crops through cleared land into the aquifer. It takes the salt accumulated by the mallee scrub with it. The diagram in Exhibit P8 reproduced below demonstrates this.
(Diagram not available in this format)
At present the water moves at about half a metre a year towards the aquifer taking the increased salt with it. There is no salt introduced by the mining process but there is increased movement of water by the application of water in the wet plant, which is then returned to the pit. At the present rate the aquifer will be unusably salty in 100 to 300 years. The application of water in the separation process consequent on the mining will accelerate the process of salt movement under the strands of mining. After a gap of 3 to 5 years of no change then the salinity of the aquifer under the strand will increase at 30mg of salt per litre per year as opposed to 7mg of salt per year had mining not occurred. The detail of this is explained in Appendix G to the STTR. Figure 1 at page 4 represents the reduced time for the salt to reach the aquifer under the mining proposal. This was separately tendered as part of Exhibit P8 and is reproduced below. (this was extracted from the report at tab 3 of Exhibit P1)
(Diagram not available in this format)
In 70 years from now without mining the salinity in the top of the aquifer will have increased by 500mg per litre. The actual figure with mining is not calculated but on the basis of the figures given in evidence, there will be 5 years of no change then salinity will increase at the rate of 30mg per year for 65 years, an increase of salinity of 1950mg per litre in 70 years. That is an extra 1450mg per litre of salinity after 70 years as a result of the mining. This is a substantial increase, sufficient to change the aquifer at this point from useful for agriculture to not useful for agriculture. The evidence from Dr Woods is that the water in the aquifer moves at 0.5metres per year. The implication is that the increased salt is introduced initially to the aquifer directly below the 200m or so width of the pit. Most of the water will be introduced to the pit after its use in the ore concentration plant. A small amount will be used for wetting down the topsoil and other parts of the mining operation for dust reduction and in some instances to water plants in rehabilitated areas. Although Mr Woods was not directly asked it seems obvious that the water added to the pit will not soak down to the aquifer in a tight width directly under the pit but will spread to affect a wider part of the aquifer than the 200m or so width of the pit. Initially it will only affect the top of the aquifer. Then in a hundred years it would have extended 50 metres either side of the part initially affected. I am surprised the rate of movement is so slow but that is the evidence.
It follows that the commitment of STNL to deepen or dig new bores to overcome any draw down effect and the relatively narrow band of increased salinity in the future seem sufficient protection of the freehold access to water for general farm use. New Bores can be sited well away from the area affected by mining. I shall deal separately with Mr Rohrlach’s position at the end of this judgment. The first Mining Lease (Exhibit 1, GLB 5) has conditions specifically dealing with water. Clause 3.1 requires a Mining and Rehabilitation Program (MARP) which includes at (c)(vi)&(vii) a Site Water Management Plan and a Bore field Impact Management Plan. At clause 4 some detail of these is prescribed including: “(b)… a detailed monitoring program and trigger levels for commencement of preventative and remedial actions.” The regime will test and monitor the validity of the results of the modelling and if they are wrong the problem should be identified early. Clause 4(e) requires STNL, in the event of the mine adversely affecting a water supply to provide a replacement supply of similar quality.
The long term implication for the aquifer is a matter of policy outside my ambit. I express a gratuitous view that in a continent of such scarcity of potable water it seems very short sighted to allow activities that will ruin a substantial aquifer in 100 to 300 hundred years, or less. However this remark is not a criticism specifically of this mining project. It will only accelerate a process already well advanced and only under the mining strands. Matters much more profound than the mining project will need to be addressed to arrest the relentless approach of salt to the aquifer under cleared land in the Mallee. Mr Berger raised the possibility of the use in rotation of deep rooted perennial Lucerne to capture subsoil moisture and reduce the washing down of the salt. I have accepted his concern that decisions should not now be made that reduce the scope to adopt better approaches to agriculture not yet identified.
In the context that it is the existing farming of cleared land that is causing the flushing of salt to the aquifer, the additional effect of mining in the limited area of the strands is not so great as to lead to a view that mining should not be permitted to protect the farmers’ interest.
There are also some by products of arsenic, chrome and radioactive monazite that I shall next discuss.
Dangerous by products
Arsenic and Chromium naturally occur in iron rich soils. This is a result of the presence of iron oxide which tends to scavenge other minerals. With the washing of the ore in the wet plant the sands will be separated from the clay fines. Some arsenic and chromium is associated with these clays, known at this point as slimes. The slimes will be progressively fed into the overburden. They are not changed chemically. They come out as clay and go back as clay. Mr Bosch tells me that there is no cause for concern that the arsenic and chrome will leach further in this environment. They only tend to become soluble and leach in low pH, ie acidic conditions. Here the pH is high. The overburden with which they will be mixed is alkali due to the sodic clay. This will prevent the arsenic and chrome becoming soluble. I have no reason to do other than accept that evidence.
Monozite and other radionuclide emitting materials are associated with the ore. The Mindarie ore sands have on average 19.5 ppm uranium and 19.5ppm thorium (see page 50 STTR). The uranium is only 10% , and the thorium less than 5% of the levels that would constitute a radioactive ore in the meaning of the Radiation Protection and Control Act 1982 (SA). However, after treatment the concentrations will increase in the waste sands to a level not yet calculated but which may result in radioactive emissions of 35 becquerels per gram (a becquerel corresponds to one disintegration per second), which then falls within the definition of a radioactive substance for the purposes of that Act. STNL will need to comply with the Radiation Protection and Control Act 1982(SA) and regulations and codes of practice in handling this material when it is returned to the mine site. It will need to develop a specific code of practice relevant to the project in terms discussed at pp. 53-4 of the STTR. In particular it will need to ensure that radioactive material does not become airborne dust and that it is not returned towards the bottom rather than the top of the mine pit. If all that is done less radioactive material will be returned than is already present, because some will be exported with the ore. The evidence is that no significant radon, a radioactive gas which has particular dangers because it can be inhaled, will be produced.
Weed control
Any landowner is understandably concerned not to have weeds and other pests introduced. There is a particular concern in relation to Branched Broom Rape which is subject to nearby quarantine areas shown in the map in Figure 18 attached to the STTR. The nearest is North East of Karoonda. If this were introduced the consequent quarantine would have real costs to the Landowner(s).
I note that the first Mining Lease (Exhibit 1, GLB 5) has a condition in clause 3.4.1(b) requiring the maintenance of revegetated areas including “pest plants and weed control, and in 3.6.3 a condition to maintain the farmland area again including “pest plants and weed control.” These bald assertions need more detail. This is especially the case with Mr Rohrlach’s property. He grows potatoes, which have susceptibility to diseases such as bacterial wilt and potato cyst nematode (and others). In my finding conditions can be in place to effectively minimise the risk of weed and disease control but they need to be spelt out and adhered to. It would be prudent for STNL to survey for weeds and disease before the mining operation arrives in any area so that if pests are there already they are not blamed on STNL, and if they are not, STNL can be held accountable for any cost of eradication or expense or loss caused by quarantine or otherwise.
Fencing
The mining operation will go through existing fence lines, both within properties and boundary fencing. Whilst mining of a strand continues the haul road and services will continue this disruption. Appropriate measures will need to be in place to allow the Landowner(s) to maintain the required separation between paddocks and at boundaries. Whether this is best done with grids or gates or other means will need to be discussed as the project proceeds. In addition there may need to be temporary fencing of the mining operation to prevent risk to stock and people, and of rehabilitated areas to protect the fragile topsoil until the rehabilitation is sufficiently advanced.Farming infrastructure
The mining operation will affect machinery sheds, stockyards, shearing sheds, watering points and other farming infrastructure. Where farming infrastructure is unusable as a result of the mining operation STNL will need to provide adequate alternative infrastructure to allow the farming to continue. Where farming infrastructure is destroyed STNL will need to provide equivalent replacement infrastructure on a new for old basis.Noise
I refer to the report from Bassett Acoustics behind tab 9 in exhibit P 1 (also at STNL Appendix F). L is the maximum noise energy, Leq is average of noise energy, L10 is the typical upper level, exceeded only 10% of the time and L90 is the level which is exceeded 90% of the time (to a layperson background noise).
The excavation work, the conveyors, the ore concentration plant and the semi tippers taking ore down the access road to Mindarie and returning will work 24 hours per day. The Industrial Noise Policy (INP) accepted by the Environment Protection Authority for a predominantly rural area is 47dB(A) for day time and 40 dB(A) for night time. A 5 dB(A) penalty is imposed for the rise and fall of engine noise. A level of 35 dB(A) is therefore acceptable for a permanent noise source. For residences, World Heath Organisation (WHO) guidelines accept a sleep disturbance level of not more than 30 dB(A) equivalent noise level (Leq) with a maximum limited to 45dB(A). To give this a reference, a test outside the court in the public area was 49.5 dB(A), in the court with people talking was 55dB(A), in the court with no-one talking gave an L90 reading of 38.2 dB(A)which is more than the WHO sleep level. This should be reassuring for judicial officers trying to stay awake in long drawn out cases! Given that decibels are a logarithmic measurement this is substantially more noise than the WHO standard. On the basis of Dr Swift’s evidence it is subjectively a doubling of the WHO standard to reach the sound in the court with no one talking. I accept that the Mallee District at night would be loud in its silence but I also accept that the standards are realistic.
I note that the noise inside the bedroom is on the assumption of a partly open window. There is a reduction of 15dB(A) of sound into partly open window. The WHO sleep disturbance guidelines then permit 45dB(A) Leq outside the window with the maximum limited to 60dB(A). The first graph in Appendix D of the Bassett Acoustics Report predicts that in neutral weather conditions external noise outside the window will only exceed 45dB(A) if the property has a sideline distance of closer than 600m. The second graph assumes worst case weather conditions, and predicts noise exceeding the guidelines only when the sideline distance is closer than 1000m. Residences further away will not exceed WHO sleep disturbance guidelines.
Where it is predicted that noise outside the window at the residences will exceed WHO guidelines those same graphs predict that in neutral weather conditions the WHO guidelines will only be exceeded when the mining operation is within 750m.
These are the owners of residential houses closer than 1000m in the cases before me (Exhibit P 21 which is drawn from Appendix E of the Bassett report with the relevant house names added):
This will also allow the farmer to choose between barley or wheat for actual loss. My view is that the actual loss should be limited to grain farming. If the landowner wants to experiment with irrigated crops then their farms are quite large enough for them to do so away from the strand lines.
The time of payment is dealt with in the formula but in broad terms payment is in the season of the crop.
Loss of grazing
Mr Berger submits the method of calculating the loss in Mr Wapper’s report (Exhibit Berger 2) In this the stock for the farm expressed in Dry Sheep Equivalents (“DSE”) are divided by the grazed area (converted to hectares) to give a DSE stocking rate per hectare of 1.33. A gross margin for a self replacing Merino flock of $37 per DSE from Rural Solutions (see annexed to Exhibit Berger 2) is applied to imply a value earned per hectare of $49 per annum ($37x1.33=$49). Incidentally I do not accept the submission from Mr Collett that the factor of 1.33 has been twice applied, merely the heading on the table at page 6 incorrectly describes the $37 as a margin per DSE per hectare when it is a margin per DSE. The $49 is applied to the disturbed area for 6 months, presumably the non cropping part of the year. This approach suffers from the very “one size fits all” criticism Mr and Mrs Berger makes of the other offers of compensation. The averaging of area lost to grazing makes no assessment of the grazing value of the land subject to the mining operation. Mr Berger sows some paddocks with medic crops which are too fragile for grazing. Running a permanent flock of sheep requires some of the land not to be cropped each year to support the stock. Alternatively they must be supported with feed, not grazed. If the compensation is taken for loss of crop there may be an element of double dipping to take stock loss for the same area. I accept that Mr Berger may enhance the feed value of stubbles with additives such as urea but if so that cost needs to factored in. Some of Mr and Mrs Berger’s land when out of crop has no grazing value because of his sophisticated grass killing techniques. STNL make the point a proportional reduction of the flock for the loss of any grazing of the restored area need not occur. The flock can be maintained with feed. If the flock were reduced a proper calculation of loss would be reduced by the alternative return on the capital value of the sheep sold. The calculation is altogether more complicated than that proposed. For these reasons I conclude that the Mr Wapper’s calculation is not a fair assessment of the actual grazing loss that will occur due to mining on the disturbed area.
There are only two principled methods to calculate grazing loss. One is to assume no crop so that the area is grazed. In this event something like Mr Wapper’ s approach might be appropriate. No one will seek that because the compensation per hectare is much greater on the basis of the land being cropped. If the land is cropped the only value lost can be the value of grazing the stubble. The best way of calculating that is an agistment rate.
This compensation will be determined by an agreed expert who will determine the DSE numbers and time that they could have been grazed on the Disturbed Area stubbles and the prevailing agistment rate in the district for that season which shall be applied to that notional agistment. STNL seek to define a grazed area, which might be less than the Disturbed Area. This is an unnecessary distinction not capable of easy definition.
This is equally applicable to continuous croppers such as the Heidrichs who can only run sheep on the stubbles between crops and to the Bergers who in respect of paddocks that are cropped can only establish a loss in that year of the value of grazing the stubbles.
The area subject to compensation
STNL proposes compensation for the area actually disturbed. I have a submission that the compensation should be calculated on the area of the Mineral Lease. The landowner(s) will be prevented from cropping the moving pit area, the areas on either side occupied by stockpiles, the area occupied my the ore concentration plant and conveyors and ancillary mining activity, the bore fields and the provision of services to the mining operation, and transport to and from the mining operation. I shall call these areas the Disturbed Area. It is not intended that these activities will occupy the whole area of the Mining Lease. STNL has no interest in farming. The landowner will best look after the remaining area within the Mining Lease. It follows that the compensation should be calculated on the Disturbed Area, not the whole area of the Mining Lease. In addition the mining operation may isolate some parts of paddocks so that they cannot be cropped. Their area should be added to the Disturbed Area for compensation purposes.
Loss of amenity
STNL offer $100 per hectare of the Disturbed Area compensation for loss of amenity not otherwise compensated. This has been criticised as being too arbitrary and not allowing for the particular circumstances of individual landowner(s). For example the mining operation will pass close to the Bergers’ house and disrupt stock yards and the shearing and other sheds. In other properties the disruption is only to paddocks. This argument forgets the purpose of compensation. It is to compensate for aspects of disruption not dealt with by conditions. The disruption to the residence is dealt with by a separate award of compensation. Sheds will be replaced with new for old, and inconvenience in my view compensated within those conditions. The purpose of general amenity is not to solve inadequate compensation under other headings but a separate broad brush compensation for inconvenience not otherwise dealt with. This will include the matters mentioned above under the headings inconvenience, dust and noise not particularly compensated, visual impact, social impact and other impacts not separately mentioned and provided for in the conditions and compensation set out in this judgment and the conditions and compensation ordered. It is a payment proportional to the area of landowner(s)’ land affected by the mining operation. I find it is a necessarily arbitrary but adequate compensation for other aspects of the interference with the exempt land not separately dealt with by compensation or conditions.
Adjustment for speed
The proposal assumes a rate of progress of about 1 kilometre per month so that the close imposition of the pit to any place does not last long. The primary compensation here is for proximity to a dwelling. If progress is slow close to dwellings, because compensation is linked to the number of days within 750 metres of them, the amount of compensation will increase if the rate of progress is slow. Mr Bosch’s evidence is that the economic viability of the project is predicated on the rate of progress described. The inference is that if it is too slow it will not progress at all. For those reasons I see no reason to impose a particular condition for rate of progress.
Property Values
STNL assert that if rehabilitation is successful and compensation is adequate the freehold owners will lose nothing and their property values will not be affected. I accept that once the mine is established this will be the case. The conditions of compensation I can fix should adequately compensate for matters not solved by conditions. The conditions in the mining lease are such that if rehabilitation is not successful the mining should be stopped. For sales intended before the mining commences I am asked to consider some specialised valuations. Since these issues discuss valuations of property about to be sold I have upheld a claim of commercial confidentiality to suppress that valuation evidence. Accordingly I suppress my judgment on those issues and shall publish it separately.
I note that STNL originally intended to place caveats over the freehold land subject to their leases. I find that such caveats would have the potential to make borrowing money secured by mortgage over the property more difficult and were STNL to proceed with caveats that is a matter for which I would assess compensation. However STNL has agreed that the Mining Act 1971 (SA) gives it sufficient protection without a caveat. I shall order that a condition of the removal of the exemption be that no caveats be placed over the freehold titles.
GST
Payments expressed here are net of GST. If it follows that GST compliant invoices or other matters need to be in place to make that intent effective I invite further submissions on that.
Bonds
Conditions and orders for compensation are only effective if the resources of the company responsible for the orders are sufficient to satisfy them. The only way to guarantee this is to have in place a bond that is sufficient to effectively guarantee each Landowner(s)’ entitlement to payment. It was suggested that I specify a minimum bond, firstly at $1m and latterly at $2m. These different claims confirm my view that I do not have sufficient information to fix a figure and I am unwilling to specify an ill informed figure, because that would be without basis and in case it gains currency as being an appropriate amount. The first mining lease at the Second Schedule clause 1.2 provides for a:
“…Rehabilitation Bond sufficient to ensure that land disturbed by the mining operations will be rehabilitated, vegetation established and infrastructure reinstated to the satisfaction of the Minister. The amount of the surety is to be determined by the Minister and lodged prior to the commencement of the mining operations.”
Such a bond must be in place before mining commences and the orders I shall make here are subject to there being a bond, calculated to be sufficient to enure compliance with the orders I make in these cases in addition to other obligations it is set to guarantee. I intend to provide for compensation in the event of any reduction of yield. That should allow the sufficiency of a bond for my purposes to be calculated. I expect such a bond will roll over after an appropriate time to later mining leases after assuring compliance with all the terms of the mining lease to which it first applied.
In relation to the signing fee that is best dealt with under a broader issue of the costs of the case.
MATTERS SPECIFIC TO INDIVIDUAL LANDOWNERS
Mr GC Hazelwood
Mr Hazelwood’s first position is for the exemption not to be removed. If it is to be removed his statement of appropriate terms is in Exhibit P1. He wishes there to be no entry on that part of section 62 which is designated as the residential compound. His brother William lives there and he may retire there from Sydney in the future. He is concerned to ensure that quick revegetation of section 83, which is near the racecourse. STNL are obligated to do that. The pit will traverse the railway line and road in the vicinity of his property. At the view it was suggested that it might not be necessary to cut them. In any event STNL undertakes not to reroute the road nor the railway line through his property. I confirm that there will be no mounds nor depressions on Mr Hazelwood’s land.
He seeks payments of:
·$1,000 per week whilst mining occurs;
·for stress and aggravation a payment of $50,000;
·$10,102 be donated to the Uniting Church at Karoonda;
·Uniting Churches Ashfield Mission in NSW $1.6m.
For reasons I set out below I shall remove the exempt status of the land on conditions and with clear prescriptions of compensation. There is no reason to particularly prefer Mr Hazelwood over the terms I shall generally provide. The claim for donations to the Churches I accept as conscientious but they are not authorised under the Mining Act 1971 (SA). Such awards to charity are most commonly associated with defamation actions. The role of compensation here is to compensate the owner. I cannot accede to Mr Hazelwood’s request. I have noted that I treat his brother William as a resident owner to entitle him to the higher level of compensation for residential disturbance. If Mr Hazelwood takes up residence himself after the claim is pegged that is not a matter for which compensation is payable. I explained the reasons for this above, under the heading Noise.
There remains the issue of whether any payment for drilling was made and what permission of entry was sought. It appears that 6 holes were drilled on his property. It may be that had Mr Hazelwood been consulted he would have refused permission and then it may have fallen on this court to fix a proper basis in terms of conditions and compensation upon which drilling could occur. I cannot undo what has been done. Mr Hazelwood is entitled to be paid the same as other landowners for the drilling that occurred on his land. Unless STNL can prove they paid an apparent or authorised agent on Mr Hazelwood’s behalf they should pay him straight away.
Mr FQ Rohrlach
Mr Amey appeared for Mr Rohrlach. It was useful for me to have at least one lawyer appearing for a landowner, especially a lawyer who was once the Senior Warden. Although his representation was specific to his client, having him at the bar table advantaged all the Landowner(s). Mr Rohrlach stands separate as an irrigator of potatoes. He has grown potatoes at Langhorne creek for 7 years. About 4 or 5 years ago he purchased part of Mr Collins’ property at Halidon with a water allocation of 720 IU equivalent. He would like more water but has been unable to increase his entitlement because he is in an area with the allocation fully allocated.
The property had only one pivot when he bought it. He now has four ready and wants five. The location of three of them on the block can be seen from the overhead photo, with the pivots super imposed, reproduced below (Exhibit P6). A sketch below that shows the final layout of pivots, with Mr Rohrlach’s numbering of them.
(Image and diagram not available in this format)
Mr Rohrlach is not growing potatoes at Halidon for market but for seed to plant at Langhorne Creek for a summer crop for market. Potatoes are very susceptible to disease so it is most important to grow them from disease free seed potatoes. Tissue culture is virus free and very expensive. With each generation there is an increased risk of disease. Certified seed is usually within 4 generations of tissue culture. Certified potato seed is mainly available from Victoria. Victoria only grows summer crop, whereas in South Australia a winter crop can also be grown. Mr Rohrlach plants certified seed potatoes at Langhorne Creek for harvest in December and then plants them in February at Halidon. When they are the correct size for seed potatoes he kills the tops with a herbicide and leaves them in the ground over winter. He can then plant them at Langhorne creek in November for a March harvest for market. He prefers to use his own seed because he bought a batch of Victorian seed potatoes for Langhorne Creek with spotted wilt virus. Although his seed potatoes are one or two off certified seed they are more reliably disease free than comparable alternatives.
He is concerned about several issues:
·an inability to grow potatoes whilst the mining operation affects his property;
·pivot soil will not be adequately restored and rocks will be introduced into it.
·a reduction in the quantity or quality of water available to him;
·the introduction of disease;
·the very close proximity of the pit to an old homestead he would like to restore it;
·a bore out the back of the dwelling which is in the path of the mining operation.
·the loss of a dune with good trees including old pepper trees, which are a wind break and amenity for the old homestead and the pivots to the south of it.
·If the scrub to the NW of his property is lost it will remove a valuable windbreak from the NW which will affect pivot 5.
I discuss each of these in turn.
Disruption to the potato crop
I note this expert evidence. Mr Hignett noted that growing potatoes using ground water is “a pretty savage land use” because the application of saline ground water over sodic clay, which acts as a barrier, will increase salinity as some of the water evaporates. It follows that rests between crops to allow salinity to wash down is desirable. Ms Sylvia suggested that rotation is a good idea from the point of view of reducing disease risk by the removal of the host for the disease. The effect is different for different diseases. Mr Cameron said that for seed crops a minimum five year rest between crops is necessary, and he prefers ten years. This is particularly so to reduce the risk of soil diseases such as powdery scab and also pink rot, although that is more a disease of the South East. He encourages the planting of a Brassica crop before potatoes to help with nematodes and black leg. My conclusion is that he is limited basically to growing a winter crop by the need for rain to dilute the salt and he needs to rotate the potatoes to different pivots to rest the soil, for reasons of reducing the risk of disease and to allow the salinity to wash out. At the moment he grows one pivot each winter and it follows that with only five pivots and limited water available he cannot substantially expand this level of production.
Mr Rohrlach is towards the end of the Halidon strand, the first of those to mined in the cases before me. It is expected that the mining pit and rehabilitation will take 9 weeks. It will go straight through pivot no.5 and one side of pivot no. 2 to an extent that it will not be usable until the soil is rehabilitated. I reject the suggestion that he can reduce the length of the pivot. The consequent reduction in area would seriously reduce the return on the pivot in that year. It will not affect pivot no. 1 and one at least of pivots nos. 3 and 4 will be unaffected. In addition the haul road and power lines are estimated to be in place for 41 weeks.
On the scale of his present operation there is no reason why he cannot grow one pivot of potatoes from February and keep them in the ground until he needs them for planting at Langhorne Creek in November, even if the mining excavation goes through his property in that period. He says he wishes to increase his planting. On the evidence before me two pivots will be available even with the mining operation. I can see no basis on which to award Mr Rohrlach compensation for crop loss. He will need as much warning of the mining operation as possible to ensure his pivot rotation fits the timing of the mining operation.
Inadequate soil restoration
I refer to the findings above that adequate soil restoration should be achieved. I accept Mr Cameron’s evidence that potatoes root to as deep as 40 to 50cms. Particular attention will need to be paid ensure there is no increase in bad clay in that zone. Care will also need to be taken to ensure no rocks are brought to the surface zone that is dug for potatoes. The testing regime to ensure that soil restoration is adequate will need to be modified to apply to potatoes.
Bore water quantity and quality
Water is a major concern for Mr Rohrlach. It is the whole foundation of his operation. His property is in the Hundred of Chesson where I have noted that the whole of the water entitlement (the PAV) has already been allocated (STTR p.16). If his bores are ruined then he is unable to obtain alternative supply. As to quantity he says that his existing pivot bore goes to the bottom of the aquifer, the pump is about 270ft deep, and already he sometimes pumps air. Substantial draw down may slightly reduce his rate of supply, which is marginal.
His water has 1400ppm salt. Potatoes like no more than 600ppm. The expert evidence is that 1400ppm will cause a 25% loss. Because he grows in winter his loss is moderated by rainfall, which dilutes the net effect of the salinity of the groundwater. Obviously he cannot afford any acceleration of the rate of increase of the salinity of the ground water.
I refer to the discussion above of the draw down and salinity effects of borefield. Draw down half a kilometre from the borefield is as much as 4 metres and after one year is predicted to be 1.5 metres reducing to less than 0.5metres in a little after 3 years. It will be necessary to site the borefields not closer than half a kilometre from Mr Rohrlach’s property and to have alternative water, at his present rate of supply and quality, available to him for up to 3 years.
After the predicted gap of 3 to 5 years of no change then the salinity of the aquifer under the strand will increase at 30mg of salt per litre per year as opposed to 7mg/L of salt per year had mining not occurred. Taking the worst case scenario, after 3 years the salinity under the pit would be the same, but would have been 21mg/L higher without mining. In the fourth year it will be 30mg/L worse under the pit and would have been 28mg/L without mining, that is about the same. After 4 years the salinity under the pit will increase at 23mg/L of salt per year more under the pit than would have been the case without mining. Thus after 10 years the aquifer under the pit will be 138mg/L higher than if mining had not occurred. Mr Rohrlach’s bore is in the centre of pivot 2 which has a radius of 179 feet (the length of the pivot). The pit intrudes on pivot 2 so his bore is within 50metres of the pit. I concluded above that the water on its way down the subsoil will spread to a greater width than the 200m or so width of the pit. It is likely that the top water in Mr Rohrlach’s bore will be affected directly by salinity from the mining operation (not just the movement of salinity at the rate of 0.5 metre per year through the acquifer). Given that his pumping rate draws air on occasions this will increase the salinity of the water he applies to the potatoes. How much is unclear because he will mostly be drawing water from lower in the acquifer, which will not be affected for many years. None of this will be certain for up to a decade or even more after the mining operation goes through, by which time it may be hard to seek a remedy. In any event the modelling is just that, an unproved model. He is entitled to assurances before mining commences that STNL has purchased or other wise obtained water rights to allow Mr Rohrlach to draw water of the same quality as his bore delivers just before the mining, but substantially further from the pit. He is entitled to such access rights and infrastructure to deliver that water to him at no increased expense.
The introduction of disease
Potato diseases can be introduced with dirt on vehicles and machinery. Mr Rohrlach steam cleans his own machinery when he brings it from Langhorne Creek. He is of course then bringing it from a place where potatoes are grown so diseases are expected to be present to some degree, despite his best efforts. There is no other potato growing on the Halidon strand along which the machinery will traverse, so the risk of introduction is to that extent less. Indeed the nearest potato growing identified by Mr Cameron is at Wanbi, some 15km away. The other main vectors for disease are insects and the seed potatoes. The absence of potatoes nearby largely eliminates the risk of insects.
Since Mr Rohrlach’s position is not to allow mining, there was little evidence about an appropriate plan to minimise the risk of introduction of disease in the mining operation. An appropriate plan will need to be implemented. STNL should be entitled to inspect the potatoes from the crop before mining commences to satisfy itself of any diseases in that crop. If any new diseases are present in the crop during the mining operation, or in the crop immediately after it the inference will be they were introduced by the mining and compensation will need to be assessed for any losses, including measures to eradicate the disease, or relocate Mr Rohrlach. Simply he is entitled to be put in as good a position for potato growing as he was before the mining operation, both in relation to water quality, soil quality and disease.
The old homesteadI
STNL undertakes to have engineering tests of the old homestead before and after mining and to remedy any harm done. That is sufficient. It is not presently a residence.
The homestead bore
This will need to be capped and Mr Rohrlach will need to be provided the same licensed entitlement to water of the quality as he presently has.
The sand dune, mallee and pepper trees
As with all topographical features this needs to be restored and stabilised whilst mallee and other trees planted in consultation with Mr Rohrlach are established.
The scrub NW of the property
This must be reinstated in accordance with the relevant Flora and Fauna Management plan under the MARP in the mining lease when it is granted for the Halidon strand.
It appears as if drilling occurred on his property without direct reference to Mr Rohrlach. It may be that his share farmer was consulted. Unless STNL can prove they paid an apparent or authorised agent on Mr Rohrlach’s behalf they should pay him straight away.
Messrs JA and JC Berger and Mrs Betty Merton
There are some matters that are confidential to these parties that I shall deal with in separate judgments.
CONCLUSION
I find that it is possible to provide a combination of conditions to protect the Landowner(s) and compensation for disruptions to each of them that are sufficient to allow the proposed mining operation to proceed.
I publish on a confidential basis to the parties before me, and their advisors a draft set of conditions and compensation. These have been done under tight time constraints and may need clarification. Once the parties have had a chance to consider them I shall entertain comments as to drafting and detail, but not as to the underlying principles expressed in this judgment. I shall prescribe an end date for the mining operation as it affects the strands before me. I invite submissions on that issue.
I note my jurisdictional limit. It is $150,000 for compensation both under s.9 and s.61 for each landowner. I take that to entitle me to award compensation up to $300,000. With eight separate properties (seven if the Heidrichs’ and Irlam’s are now regarded as one) that gives me an ability to award a total compensation of $2.4m ((or $2.1m) However, those aspects of my awards properly regarded as compensation in my view do not exceed $150,000 for each property. As for the bond I await to see the arrangements that the Minister puts in place.
Finally I compliment the parties on the patient and flexible way they approached this highly complicated case. I hope that augurs well for their future relationships.
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