Wandoan Coal Mine (“Xstrata”) case

This case involved an objection against the Wandoan Coal Mine, a major open-cut coal mine proposed to operate for 35 years in the Surat Basin of Queensland. It is commonly known as the “Xstrata Case”.

The mine was part of the Wandoan Coal Project proposed in 2007 by Xstrata Coal Queensland Pty Ltd and its joint venturers (taken over by Swiss mining gaint Glencore in 2013). It was proposed to be located west of the township of Wandoan, approximately 350 km northwest of Brisbane and 60 km south of Taroom.

The thermal coal deposits for the mine were estimated to be in excess of 1.2 billion tonnes and are located within three mining lease applications covering approximately 32,000 hectares.

Consultants for the applicants prepared an environmental impact statement that calculated that the mining and use of the coal would produce 1.3 billion tonnes of greenhouse gases.

In Queensland, the major approvals required for large 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).

The Queensland Coordinator-General declared the mine and rail project a “significant project” in 2007 (this designation later changed to being a “coordinated project”) under the State Development and Public Works Organisation Act 1971 (Qld).  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.

An EIS was prepared for the mine and rail project in 2007-2010 and the Coordinator-General issued a report in 2010 recommending the mine 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 2011.

Following the Coordinator-General’s report, the mine was publicly advertised for objections under the MRA and EPA.

The Friends of the Earth – Brisbane Co-Op Ltd (FoE), a conservation group, lodged an objection to the mine due to the contribution its emissions will make to climate change and ocean acidification.

Neighbouring landholders also objected to the mine due to noise, dust, groundwater and other issues; however, these objections are not the focus here.

The objection by FoE and other objections by neighbouring farmers was heard by the Land Court of Queensland in Brisbane, from 22 August – 31 August 2011.

In 2012 the Land Court (constituted by President MacDonald) dismissed FoE’s objection and recommended that the mining lease and environmental authority be granted. Some changes were recommended to address concerns raised by the landholders. This decision is commonly known as the “Xstrata Case”.

FoE appealed the decision to the Land Appeal Court but discontinued the appeal before a decision was reached.

The environmental authority for the mine was issued in August 2012, however, the process for the mining lease was put on hold in 2012 due to poor market conditions for coal. It was eventually issued on 8 August 2017.

The mine has been subject to separate litigation in the Land Court over compensation of landholders.

Postscript: mine delayed

In November 2012 the future of the mine was reported to be in doubt due to market conditions. The price of thermal coal decreased substantially and the market outlook was poor due to a range of factors, including global responses to climate change.

In March 2013 the mine was reported to be even less likely to proceed due to the risk of the project and market conditions.

In September 2013 the mine was reported to have been placed on indefinite hold due to market conditions and the business risks involved in proceeding.

In mid-2017 “new life” was reported to have been breathed into the project.

In early 2019 the mine was still on hold but Glencore stated it was still considering the project when announcing an overall cap on its GHG emissions from coal mining.

In early 2023, Glencore was reported to have said:

[It] “planned to use about 4 million tonnes a year from the resource for the potential production of blue hydrogen with carbon capture and storage.

We do not plan to develop the Wandoan coal resource as a traditional coal mine for the purpose of servicing the traditional coal markets.

We are investigating the potential to produce blue hydrogen and ammonia through utilising a relatively small portion of the Wandoan coal resource as feedstock.

… the project was at an early stage and no investment decision had been made. About 90 per cent of the emissions would be captured and stored.

We believe this blue hydrogen project with CCS could be an important bridge to enabling the broader uptake of hydrogen technology and applications in Australia and globally.

Subject to final approvals and final investment decision, a commercial scale blue hydrogen project with CCS located in Wandoan could provide a range of socio-economic opportunities for the surrounding region. We welcome further engagement with all stakeholders on this project.”

[It] “expected that blue hydrogen could be produced economically while green hydrogen, which uses water and has no emissions, required a ‘step-change’ in costs.”

Climate change reasoning rejected a decade later

The Land Court’s reasoning on climate change in the Xstrata Case (in 2012) – the “Drug Dealers Defence” that, if we don’t mine the coal someone else will; therefore, there is no impact on climate change – was adopted by the Land Court in the later cases involving:

• the Alpha Coal Mine (2013) (in which the Drug Dealers Defence was affirmed by the Queensland Supreme Court (in 2015) and Court of Appeal (in 2016));
• Adani’s Carmichael Coal Mine (2015);
• Kevin’s Corner Mine (2017); and
• the New Acland Mine (2017).

Each of these Queensland cases are a separate case study on this site.

The Drug Dealers Defence has been rejected in New South Wales in 2019 by Preston CJ in his seminal decision in Gloucester Resources rejected the Drug Dealers Defence (or “market substitution” argument)  as “flawed”.

The reasoning in the Xstrata Case was followed for a decade in Queensland until a new President of the Land Court, President Kingham, rejected the Drug Dealers Defence in Waratah Coal v Youth Verdict [2022] QLC 22. Her Honour summarised her rejection of this argument in the Executive Summary:

“[31] Waratah says approving the mine will make no difference to total emissions, because it will displace other lower quality coal with higher GHG emissions. I reject that submission, as well as its submissions that there will be a beneficial climate outcome if the Project is approved and an adverse climate outcome if it is not. Although the Project coal might displace other supply in its market, that is most likely to be other high rank coal, with similar GHG emissions.”

The rejection of the Drug Dealers Defence in Waratah Coal v Youth Verdict [2022] QLC 22 was a legal first for Queensland and a very substantial departure from previous decisions of the Land Court in similar cases.