New Acland Coal Mine Case

The litigation against Stage 3 of the New Acland Coal Mine involved a mammoth hearing in the Land Court of Queensland, judicial review, an appeal, a successful High Court challenge and two rehearings in the Land Court.

Background to the case

The New Acland Coal Mine is located amidst farmlands on the Darling Downs, 35 km north-west of Toowoomba in Queensland.

It is operated by New Acland Coal Pty Ltd (NAC), a wholly-owned subsidiary of the New Hope Group.

Stage 1 of the mine commenced operations in 2002. It expanded to Stage 2 in 2005 and by 2012 the mine produced 5.09 million tonnes of thermal coal per annum (Mtpa).

NAC applied in 2007 for Stage 3 of the mine to produce 9 Mtpa of coal from new pits to the south of the existing mine.

In Queensland, the major approvals required for large mines (or expansions of existing mines) under State and Federal legislation are:

• a mining lease under the Mineral Resources Act 1989 (Qld) (MRA);
• an environmental authority under the Environmental Protection Act 1994 (Qld) (EPA); and
• approval under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act).

Stage 3 of the New Acland Mine required two mining leases under the MRA for the additional area of land to be mined and an amendment to the existing environmental authority under the EPA. A map showing the land affected by the three stages of the mine is available here.

A range of other approvals may be required depending on the nature and location of a mine and its associated infrastructure, such as a water licence to extract groundwater or surface water under the Water Act 2000 (Qld).

The Queensland Coordinator-General declared Stage 3 of the mine a “significant project” in 2007 (the term for this designation later changed to being a “coordinated project”) under the State Development and Public Works Organisation Act 1971 (Qld) (State Development Act). This legislation provides an environmental impact statement (EIS) process for large projects but does not actually approve the projects occurring. An EIS under it is fed-back into other approval processes such as under the MRA and EPA.

The EIS process for the mine commenced in 2007 but stalled in 2012 when the then (Newman-LNP) Queensland Government announced it did not support the project due to the damage the mine would cause to prime agricultural land.

A revised, smaller Stage 3 project was proposed – reducing the proposed mine output to 7.5 Mtpa – and re-evaluated under the State Development Act. The Queensland Coordinator-General issued a report in December 2014 recommending the revised Stage 3 project be approved.

Concurrently with the Queensland assessment of the mine, it was assessed under the EPBC Act using a bilateral agreement and subsequently approved by the Commonwealth Environment Minister in early 2017.

The applications for the mining leases and amendment of its existing environmental authority for the mine under Queensland law were the subject of an objections hearing in the Land Court of Queensland.

Objections to the mine expansion

Over 30 objections were made by surrounding farmers and landholder groups to the revised Stage 3 proposal when it was publicly advertised for objections under the MRA and EPA in 2015.

The focus here is on the objection of a landholder group, the Oakey Coal Action Alliance (OCAA), which was one of 12 objectors who actively participated in the objections hearing in the Land Court.

OCAA objected to the mining lease and the amendment of the existing environmental authority for Stage 3 of the mine on numerous grounds, in summary including:

• groundwater depletion
• noise
• air quality
• economic benefits of the mine were overstated
• loss of agricultural land being contrary to intergenerational equity
• poor past performance of NAC and
• prejudice to the public interest.

A mammoth trial

The Land Court of Queensland hears objections to a mine under the MRA and EPA.

The objections to the revised Stage 3 expansion of the mine were referred to the Land Court in 2016 and Member PA Smith was assigned to the hearing. He was a very experienced judicial officer who had heard many cases against proposed mines in the past, including the proposed Alpha Coal Mine.

The large number of objectors and complex evidence in the case led to a mammoth trial, the longest in the 120 year history of the Land Court.

The hearing took almost 100 sitting days, during which almost 2,000 exhibits containing many tens of thousands of pages of material, and well in excess of 2,000 pages of submissions were received by the court. 28 expert and 38 lay witnesses gave evidence.

Member Smith ultimately recommended the applications for the mining leases and the amendment to the environmental authority be rejected in New Acland Coal Pty Ltd v Ashman & Ors and Chief Executive, Department of Environment and Heritage Protection (No. 4) [2017] QLC 24, delivered on 31 May 2017.

In summary, the major reasons for recommending the mine be rejected included because:

• the inadequacies of the groundwater modelling and, consequently, the unacceptable risks to groundwater for surrounding farmers
• the make-good agreements for landholders who may be affected were inadequate and practically impossible for landholders to enforce
• the impacts of the mine on land in the top 1.5% of agricultural land in Queensland meant that approval would not provide for intergenerational equity
• neighbouring landholders had experience unacceptable noise levels in the past and conditions requiring lower noise limits could not be imposed because to do so would be inconsistent with conditions imposed by the Coordinator-General.

Matthew Stevens, a senior business writer with the Australian Financial Review, described the judgment as “eye-opening and deeply concerning” and an “unqualified and brutally humiliating courtroom failure …” for the New Hope Group.

Unlawful mining of West Pit

Due to mining at a faster rate than originally proposed when it applied for Stage 2, during the first objection hearing in mid-2016 NAC started to exhaust the coal reserves in the three pits it had applied to mine in Stage 2 (North Pit, Centre Pit, and South Pit).  To avoid a mine shut-down while awaiting approval for Stage 3, NAC commenced mining a new pit called “West Pit”, which was located on the Stage 2 mining lease but was not part of the Stage 2 application or approvals.

NAC claimed that the absence of a condition in the environmental authority for Stage 2 limiting mining to the 3 pits it had applied for meant that it was authorised to mine anywhere within the Stage 2 mining lease. That construction of its approval was contrived and incorrect. Clearly, the environmental authority did not authorise mining outside the three pits that had been applied for in Stage 2. An approval cannot authorise something that was not applied for or publicly advertised as part of the application process.

A large part of “West Pit” was an area that the Queensland Government had rejected mining in 2012. The other part of “West Pit” was the subject of the Stage 3 mining application, which had not been decided at that time.

The Department of Science (DES), which adminisers the EPA, acquiesced to NAC mining West Pit from mid-2016-late 2021. DES ultimately agreed to an enforceable undertaking from NAC to rehabilitate the area (which it was already required to do). This, in effect, condoned the unlawful mining NAC had carried out in mining West Pit.

NAC mined over 10 million tonnes of coal from West Pit, having a gross value of around $1 billion. This is, arguably, the most profitable environmental crime in Queensland’s history.

Judicial review overturns decision

While the mining of West Pit was ongoing, NAC fought to obtain approval for Stage 3 after Member Smith’s decision recommending refusal of it.

On 15 June 2017 NAC filed an application for judicial review in the Supreme Court of Queensland seeking to have the Land Court’s decisions recommending rejection of the mining lease applications and refusal of the amendment of the environmental authority declared invalid, quashed and set aside based on 15 grounds, 3 of which were later abandoned. The remaining grounds were, in summary:

• ground 1 – the Land Court’s reasoning on noise & the Coordinator-General’s conditions;
• ground 2 – consideration of possible breaches of NAC’s current EA;
• ground 3 – inquiry into past performance of DEHP;
• ground 4 – consideration of the EPP (Noise) and the appropriate level of evening and night operations;
• ground 6 – consideration of the Xstrata case;
• ground 7 – whether intergenerational equity is a mandatory consideration;
• ground 9 – consideration of intergenerational equity under the MRA;
• ground 10 – groundwater is irrelevant to consider under the EPA and MRA;
• ground 12 – breach of natural justice;
• ground 13 – apprehended bias;
• ground 14 – unreasonableness & irrationality;
• ground 15 – sufficiency of reasons regarding groundwater.

Pending the outcome of the judicial review application, NAC applied for a stay of:

• the Land Court’s decisions;
• the pending decision of the Minister administering the MRA on whether to approve or refuse the mining leases; and
• the pending decision of the Chief Executive administering the EPA on whether to approve or refuse the amendment of the environmental authority.

NAC’s application for these stays was dismissed by Applegarth J on 23 June 2017.

Bowskill J heard the judicial review application on 19-23 March 2018 in the Supreme Court at Brisbane. Her Honour indicated on 2 May 2018 that she would allow the application on the basis of:

• ground 10, in relation to groundwater quantity not being within the jurisdiction of the Land Court to consider in an MRA and EPA objection hearing;
• ground 7, in relation to intergenerational equity, consequent upon the conclusion in relation to groundwater (ground 10);  and
• ground 1(aii) in relation to noise and inconsistency with the Coordinator-General’s conditions.

Final orders were made on 28 May 2018, remitting the matter to the Land Court for rehearing before a different member but largely on the basis of the findings of fact made by Member Smith (excluding groundwater quantity issues).

Environmental authority refusal set aside

On 14 February 2018, the Department of Environment and Science (DES) made a final decision to refuse the environmental authority amendment application for the project. That decision was enveloped in the judicial review proceedings against the Land Court’s decision and was subsequently set aside when NAC succeeded in those proceedings.

First rehearing in Land Court

Following Bowskill J’s decision to set aside Member Smith’s decision, a new member of the Land Court (President Kingham) reheard the applications within the constraints imposed by Bowskill J on 2-4 October 2018.

On 7 November 2018, President Kingham delivered her decision on the rehearing and recommended (in essence) that:

• NAC must apply to the Coordinator-General to lower:
  • the evening (6-10pm) noise limit from 42dB to 35dB;
  • the night (10pm-7am) noise limit from 37dB to 35dB; and
  • apply the new noise limits from the commencement of the environmental authority.
• Subject to the Coordinator-General and DES lowering the noise limits in the draft environmental authority, the environmental authority and mining leases be approved with amendments to the conditions reflecting the reasons of the Court (e.g. adding a new condition F9 that “The holder must make all noise monitoring data publicly available, online, and in real-time”).
• If the noise limits are not lowered, the applications be refused.

On 2 February 2019 the Coordinator-General granted NAC’s application to change the noise conditions as recommended by the Land Court.

Appeal dismissed and cross appeal allowed

On 30 May 2018 OCAA appealed and NAC cross appealed (contingent on OCAA’s appeal being allowed) against Bowskill J’s decision to the Queensland Court of Appeal.

OCAA’s appeal focused principally on Bowskill J’s reasoning that the Land Court did not have jurisdiction to consider the impacts of the mine on groundwater.

NAC’s cross appeal claimed Bowskill J was wrong to find the Land Court’s decision was not affected by apprehended bias.

OCAA’s (10-page) outline of argument is available here.

The appeal and cross appeal were heard by the Court of Appeal (Sofronoff P, Philippides JA, and Burns J) on 27 February – 1 March 2019.

On 18 September 2019 the Court of Appeal delivered its reasons for dismissing the appeal and allowing the cross appeal (i.e. the Court of Appeal found that the Land Court’s decision was affected by apprehended bias).

On 1 November 2019 the Court of Appeal made its final orders. It declared NAC had not been afforded procedural fairness but left the subsequent decisions to grant the EA in place. It ordered OCAA pay NAC’s costs of the proceedings before Bowskill J and the appeal.

High Court grants special leave to appeal

On 29 November 2019, OCAA applied for special leave to appeal to the High Court of Australia against the Court of Appeal’s decision not to set aside Member Smith’s decision having found it was affected by apprehended bias.

On 5 June 2020 the High Court granted special leave to appeal.

Applications for winding-up & security for costs

While OCAA’s application for special leave to appeal to the High Court was pending, NAC applied to wind up OCAA on the basis of it being insolvent due to the costs awarded by the Court of Appeal.

NAC obtained a costs assessment of its costs for the 2-day appeal of $736,823.41 and sought to wind-up OCAA for its inability to pay this debt.

NAC maintained its winding-up application even after the High Court granted OCAA special leave to appeal.

On 22 July 2020, Davis J of the Queensland Supreme Court declined to proceed with the winding-up application pending the outcome of the High Court appeal and any security for costs application that NAC may seek in the High Court.

NAC then applied to the High Court for $90,000 in security for costs of the appeal but on 20 August 2020 Bell J dismissed the application.

High Court allows appeal

After NAC’s security for costs application was dismissed, Kiefel CJ, Bell, Gageler, Keane and Edelman JJ heard the appeal in the High Court in Canberra on 6 October 2020.

On 3 February 2021 the High Court unanimously allowed OCAA’s appeal, set aside the Court of Appeal’s orders and remitted the matter to the Land Court for further rehearing.

Second rehearing in the Land Court

Following the appeal to the High Court, the matter was returned to the Land Court for a second rehearing of the objections to the MRA and EPA applications.

As groundwater impacts could not be raised in the rehearing (but are likely to be the subject of a separate appeal in the Land Court in the future) and due to the threat of costs, most of the surrounding farmers who were objectors became inactive in the second rehearing (thereby choosing not to call evidence or make submissions).

OCAA remained as the only active objector in the second rehearing, but limited its grounds of objection to NAC’s past performance and noise and dust impacts of the mine.

The second rehearing was heard over 4 weeks in October-November 2021, with closing submissions on 25 November 2021. OCAA’s closing submissions are available here.

On 17 December 2021 the Land Court recommended the mining leases and environmental authority be granted subject to stricter conditions, including the lower evening (6-10pm) and night (10pm-7am) noise limits of 35dB, which had been so contentious in the earlier hearings.

Current status

Mining stopped at the mine on 26 November 2021, when coal reserves in West Pit and elsewhere on Stage 2 were exhausted.

It was granted an environmental authority under the EPA for stage 3 in June 2022.

It was granted a mining lease under the EPA for stage 3 in August 2022.

It was granted an associated water licence (AWL) under the Water Act on 20 October 2022.

Mining of Stage 3 commenced in late 2022 and is ongoing.

Lecture on mining law in Queensland

The mining of West Pit and applications for Stage 3 of the mine were examined in the following lecture on Mining Law in Queensland, delivered on 24 March 2020 as part of a course on environmental regulation in Queensland.