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Muswellbrook Company Limited

Annual Environmental Management Report

1 July 2011 to 30 June 2012

Muswellbrook Coal Company Limited CONTENTS

1 INTRODUCTION ...... 1 1.1 Consents, Lease and Licences ...... 2 1.1.1 Development Consents ...... 2 1.1.2 Mining Leases ...... 2 1.1.3 Licenses ...... 3 1.1.4 Mining Operation Plan ...... 3 1.1.5 Environmental Management Plans 5-year Review ...... 3 1.2 Mine Contacts ...... 4 1.3 Inspection by Department of Industry and Investment NSW (DTIRIS) ...... 4

2 OPERATIONS DURING THE REPORTING PERIOD ...... 4 2.1 Exploration ...... 4 2.2 Land Preparation ...... 4 2.3 Construction ...... 5 2.4 Mining ...... 5 2.5 Mineral Processing ...... 7 2.5.1 Coal Crushing and Classification Process ...... 7 2.5.2 Coal Preparation Plant ...... 8 2.6 Waste Management ...... 9 2.6.1 General Waste Disposal ...... 9 2.6.2 Waste Stream Inspection, Classification and Recycling ...... 9 2.7 Overburden & Production ...... 11 2.8 Ore and Product Stockpiles ...... 12 2.9 Water Management ...... 12 2.9.1 Water Management System ...... 12 2.9.2 Water Classification ...... 13 2.9.3 Site Water Catchments ...... 14 2.9.4 CPP and Product Stockpile Water Management ...... 15 2.9.5 Fuel Storage ...... 15 2.9.6 Chem Alert System ...... 15 2.9.7 Explosives ...... 15 2.10 Other Infrastructure Management ...... 16

3 ENVIRONMENTAL MANAGEMENT & PERFORMANCE ...... 17 3.1 Air Quality Management ...... 17 3.1.1 Dust Management ...... 17 3.1.2 Air Quality Monitoring Network & RTEMS ...... 18 3.1.3 Real Time Environmental Monitoring System ...... 18 3.1.4 Depositional Dust Gauges ...... 22 3.1.5 TSP High Volume Air Samplers ...... 22 3.1.6 Tapered Element Oscillating Microbalance (TEOM) ...... 22 3.1.7 PM10 High Volume Air Samplers ...... 23 3.1.8 Meteorological Monitoring Stations ...... 24 3.1.9 Meteorological Monitoring Results ...... 25 3.1.10 Depositional Dust Monitoring Results ...... 31 3.1.11 Total Suspended Particulate (TSP) Monitoring Results ...... 36 3.2 Erosion and Sediment Control ...... 38 3.3 Surface Water Management ...... 39 3.3.1 Surface Water Monitoring ...... 39 3.3.2 Monthly Surface Water Monitoring Results ...... 43 3.3.3 Quarterly Surface Water Monitoring Results ...... 46 3.4 Ground Water Management ...... 48 3.4.1 Ground Water Monitoring ...... 48

Annual Environmental Management Report July 2011 – June 2012 Muswellbrook Coal Company Limited

3.4.2 Ground Water Monitoring Results ...... 48 3.4.3 Ground Water Extraction ...... 54 3.4.4 Water Balance ...... 54 3.5 Contaminated Land ...... 55 3.6 Flora & Fauna Management ...... 55 3.7 Fauna Management for Site Rehabilitation ...... 57 3.8 Weeds ...... 57 3.8.1 Further Weed Control Improvements ...... 58 3.9 Blasting ...... 58 3.9.1 Blast Criteria ...... 58 3.9.2 Best Practice Drill & Blast ...... 59 3.9.3 Blast Monitoring ...... 59 3.9.4 No.1 Open Cut Extension and No. 2 Open Cut Blast Results ...... 62 3.10 Operational Noise ...... 62 3.10.1 Real Time Directional Noise Monitoring ...... 64 3.10.2 Periodic Noise Monitoring Program ...... 65 3.10.3 Periodic Noise Monitoring Results ...... 66 3.11 Visual, Stray Light ...... 71 3.12 Aboriginal Heritage ...... 71 3.12.1 Cultural Management ...... 71 3.12.2 Aboriginal Consultation ...... 72 3.13 European Heritage ...... 72 3.14 Spontaneous Combustion ...... 73 3.14.1 Quarterly Spontaneous Combustion Reports ...... 74 3.14.2 Bushfire ...... 76 3.15 Mine Subsidence ...... 76 3.16 Hydrocarbon Contamination ...... 76 3.17 Methane Drainage/Ventilation ...... 76 3.18 Public Safety ...... 77 3.19 Other Issues and Risks ...... 77

4 COMMUNITY RELATIONS ...... 78 4.1 Environmental Complaints ...... 78 4.2 Community Consultation ...... 80 4.2.1 Community Consultative Committee ...... 80 4.3 Community Participation ...... 80 4.3.1 Incentives Program – Buffer Land Rehabilitation ...... 82

5 REHABILITATION ...... 84 5.1 Buildings ...... 84 5.2 Rehabilitation of Disturbed Lands ...... 85 5.2.1 Rehabilitation Process ...... 85 5.2.2 Species Selection ...... 86 5.2.3 Wildlife Corridor ...... 87 5.2.4 Description of Areas Rehabilitated ...... 87 5.3 Rehabilitation Monitoring ...... 90 5.4 Rehabilitation Trials and Research ...... 92 5.5 Further Development of the Final Rehabilitation Plan ...... 92

6 ACTIVITIES PROPOSED IN THE NEXT AEMR PERIOD ...... 94

Annual Environmental Management Report July 2010 – June 2011 Muswellbrook Coal Company Limited

APPENDICES Appendix 1 AEMR Plan Appendix 2 Dust Monitoring Results Appendix 3 Water Monitoring Results Appendix 4 Blast Monitoring Data Appendix 5 Summary of Complaints

Annual Environmental Management Report July 2010 – June 2011 Muswellbrook Coal Company Limited DEFINITIONS:

ACHMP Archaeology and Cultural Heritage Management Plan AEMR Annual Environmental Management Report BL Bore Licence BMP Bushfire Management Plan BVMP Blast-Vibration Management Plan BOM Bureau of Meteorology CCC Community Consultative Committee CCL Consolidated Coal Lease CHPP Coal Handling and Preparation Plant CPP Coal Preparation Plant CSIRO Commonwealth Scientific and Industrial Research Organisation DA Development Application DMP Dust Management Plan DWE Department of Water and Energy EC Electrical Conductivity EEA Eastern Emplacement Area EIS Environmental Impact Statement EL Exploration Lease EMP Environmental Management Plan EMS Environmental Management Strategy EP&A Environmental Planning and Assessment Act 1979 EPL Environment Protection Licence ESCP Erosion and Sediment Control Plan FFMP Flora and Fauna Management Plan HCRCMA Hunter Central Rivers Catchment Management Authority HVAS High Volume Air Sampler INP Industrial Noise Policy LFA Landscape Function Analysis LGA Local Government Area LiMP Lighting Management Plan LMP Land Management Plan MCC Muswellbrook Coal Company MIA Mine Infrastructure Area ML Mining Lease or Megalitre MMS Meteorological Monitoring Stations MOP Mining Operations Plan NERDDC National Energy Research, Development and Demonstration Council NMP Noise Management Plan OC Open Cut OGM Organic Growth Medium PM Particulate Matter RL Relative Level RLPB Rural Lands Protection Board ROM Run of Mine RTEMS Real Time Environmental Monitoring System SGMP Surface and Groundwater Monitoring Plan

Annual Environmental Management Report July 2011 – June 2012 Muswellbrook Coal Company Limited

SL Surface-water Licence SWMP Site Water Management Plan TEOM Tapered Element Oscillating Microbalance TPH Tonnes per Hour TPI Transpacific Industries TSP Total Suspended Particulates TSS Total Suspended Solids VAMP Visual Amenity Management Plan WMP Waste Management Plan

Government Authorities DEC Department of Environment and Conservation DECC Department of Environment and Climate Change DECCW Department of Environment, Climate Change and Water DII Department of Industry and Investment – New South Wales Department of Trade & Investment, Regional Infrastructure and DTIRIS Services DPI Department of Primary Industries DRE Division of Resources & Energy (NSW Trade & Investment) DLWC Department of Land and Water Conservation DNR Department of Natural Resources EPA Environment Protection Authority MSC Muswellbrook Shire Council NPWS National Park and Wildlife Service OEH Office of Environment and Heritage

Annual Environmental Management Report July 2011 – June 2012 Muswellbrook Coal Company Limited

1 INTRODUCTION

The Muswellbrook Coal Company mining operations are located approximately 3 km to the northeast of the Township of Muswellbrook, in the Hunter Valley of New South Wales, Australia. Muswellbrook Coal Company Limited (MCC) is a wholly owned subsidiary of Idemitsu Kosan Co. Ltd. Group. Idemitsu Kosan Co. Ltd. is a Japanese energy company with commercial interests in various parts of the world.

MCC has a long association with in Muswellbrook and was one of the first open cut coal mines in Australia. The Greta Coal Measures, currently mined at Muswellbrook Coal, were encountered by chance during water boring operations on the Muswellbrook Common in 1907. Underground mining commenced in 1908 and finished in 1997 with the closure of the No.2 Underground mine. Open cut mining commenced in 1944 in the No.1 Open Cut (OC) and still continues in the No.2 Open Cut and the No.1 Open Cut Extension.

The No.2 Open Cut commenced operations in 1972 and was operational until a major highwall failure occurred in January 2005. Mining activities remobilised in the No.2 Open Cut during September 2007 to stabilise the highwall. There is a small amount of coal (approximately 15,000t) still remaining in No.2 Open Cut which will be mined early in 2013. Shaping and dumping of overburden will continue in No.2 until mine closure. Currently, mining operations remain focused on the No.1 Open Cut Extension which was granted approval on 1 September 2003 and began operations on 8 March 2005.

The No.1 Open Cut Extension is an expansion of the No.1 Open Cut that was closed in 1970, re-opened in 2000 and re-closed in 2002 after removing a seam of coal that had been left unmined below the pit floor. Mining in the No.1 Open Cut Extension progresses eastwards away from the Muswellbrook township, between the existing No.1 Open Cut void and the previous western mining limits of the No.2 Open Cut, almost joining the two pits together. The No.1 Open Cut Extension mines through old underground workings created by the No.2 Underground and St Helier’s Colliery. Mining operations in the No.1 Open Cut Extension are planned until 2018, to a maximum approved 2 million tonnes per annum of product coal.

A Mining Operation Plan (MOP) is currently approved and is due to expire on 31 December 2013.

Information in this Annual Environmental Management Report (AEMR) relates to the MCC No.1 Open Cut Extension and the No. 2 Open Cut and reports on mining operations for the past year (July 2011 to June 2012). The AEMR is prepared in accordance with the DPI - Mineral Resources “Guidelines to the Mining, Rehabilitation and Environmental Management Process” document EDG03, Version 3, January 2006, and meets the requirements of the MCC Development Consent for the No.1 Open Cut Extension.

As per Condition U1.2 and U1.4 of the revised Environment Protection Licence (EPL), issued 2 December 2012, MCC prepared and submitted the report Muswellbrook Coal Company Particulate Matter - Best Practice Pollution Reduction Program to the Office of Environment and Heritage (OEH) on 29 June 2012.

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MCC’s current workforce as of 30 June 2012 consisted of 101 full time employees, including, administration, technical services, production, maintenance and open cut staff. There is also an average of 28 contractors and casuals on site who primarily perform production and maintenance orientated duties. The percentage of MCC employees residing in the Muswellbrook LGA is 58%, 27% in the Upper Hunter LGA, 9% in the Singleton LGA, and the remaining 6% in Maitland LGA.

1.1 Consents, Lease and Licences

1.1.1 Development Consents The MCC platform of planning approvals is shown in Table 1.

TABLE 1 - DEVELOPMENT CONSENTS

Development Date Consent Consent Number Minister for Surface facilities for the Underground Mine 11 Aug 1982 Planning and (since decommissioned and removed) Environment Muswellbrook Shire Offices, bathhouses and coal handling facilities 16 Aug 1985 Council (MSC) at the No.2 Open Cut Coal Washery as part of existing coal handling 16 Aug 1985 DA 721 (MSC) facilities 13 Apr 1989 DA 18/88 (MSC) Coal Haul Road and Road Haulage 14 Oct 1992 DA 78/92 (MSC) Eastern Area of No.2 Open Cut DA 205/2002 Approval for Extension of MCC No.1 Open Cut 1 Sep 2003 (MSC) DA 205/2002 (MSC) – Power line relocation and additions to 19 Dec 2005 Amendment to Workshop Condition 1.1 DA 205/2002 (MSC) – Relocate office buildings, workshop and 13 July 2009 Amendment to 1.1 bathhouse and 11.3 DA 205/2002 (MSC) – 23 December 2010 Extension of mining into Area C Amendment to Condition 1.1

1.1.2 Mining Leases MCC has operated under a succession of mining titles issued under the relevant legislation since underground mining operations commenced in 1907.

The No.1 Open Cut Extension operates under mining lease 1562. The No.2 Open Cut and the No.2 Underground operations were conducted under CCL713 and ML1304. Prior to 2005, the No.1 Open Cut operated under numerous individual mining leases before their consolidation in 1991 into CCL713. Mining leases are shown in Table 2.

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TABLE 2 - MINING LEASES Instrument Authority Validity Periods Consolidated Coal Lease 5 April 1990 – 24 November 2024 DRE 713 (renewed on 4 December 2008) Mining Lease 1304 DRE 12 January 1993 - 12 January 2014 Mining Lease 1562 DRE 16 February 2005 – 16 February 2026

1.1.3 Licenses MCC operates under the following licenses: . Environmental Protection License (EPL) No. 656 issued under the Protection of the Environment Operations Act 1997 . In accordance with EPL (2 December 2012), MCC prepared and submitted the report Muswellbrook Coal Company Particulate Matter - Best Practice Pollution Reduction Program to the Office of Environment and Heritage (OEH) on 29 June 2012. . License for Keeping Dangerous Goods No. 35/021999 . NSW Office of Water (NOW), Hunter Region license issued under Part 5 of the Water Act, 1912 (WA) for extraction of groundwater – 20BL169014, 20BL169037, 20BL169038 and 20BL170473 . NSW Office of Water (NOW) licence issued under Section 10 of the Water Act, 1912 for cutting an unnamed watercourse – 20SL061536.

1.1.4 Mining Operation Plan An amended Open Cut Mining Operation Plan (MOP) was approved in March 2011 and covers a two year period to December 2012. An extension to the MOP was also granted in December 2012 by DRE to December 2013. The MOP applies to mining operations in both the No.1 Open Cut Extension and No.2 Open Cut.

1.1.5 Environmental Management Plans 5-year Review In accordance with Section 3.2(f) of the No.1 Open Cut Extension Development Consent (205/2002), a 5-year review of Environmental Management Plans was conducted during the previous reporting period. Copies of the revised documents were submitted to each of the relevant approval authorities for consultation. Only one response was received and the documents were adopted as final revisions on 31 January 2012.

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1.2 Mine Contacts Site personnel responsible for mining, rehabilitation and environmental management, planning and support functions are provided in Table 3.

TABLE 3 – GENERAL MANAGER, OPERATIONS MANAGER AND ENVIRONMENTAL MANAGER CONTACT DETAILS Name Position Contact Number John Furner General Manager (02) 6543 2799

Kim Nguyen Operations Manager (02) 6543 2799

Coal & Environmental Manager Chris Knight (02) 6543 2799 and Environmental Officer

1.3 Inspection by Department of Industry and Investment NSW (DTIRIS) There were no environmental inspections conducted by NSW Department of Trade & Investment – Division of Resources and Energy (DRE), during the AEMR reporting period.

2 OPERATIONS DURING THE REPORTING PERIOD

The AEMR Plan (Appendix 1) shows the current status of operations including active mining areas, overburden emplacement areas and rehabilitated areas. This plan is a combination of plans required by DRE: Plan 3 - Land Preparation, Plan 4 - Proposed Mining Activities and Plan 5 - Proposed Rehabilitation.

2.1 Exploration During the reporting period a total of ten holes were drilled within CCL 713, ML 1304 and ML 1562, totaling 624 metres. Two holes, DDH647 and DDH648, were drilled for the purpose of attaining valuable coal quality and geotechnical data. The remaining eight boreholes were drilled to monitor atmospheres in previous underground workings.

2.2 Land Preparation Land preparation is the process of preparing the land for open cut mining. Land preparation includes vegetation clearing, topsoil stripping and topsoil stockpiling. In this reporting period, there was 7.14 hectares of land preparation conducted in the No.1 Open Cut Extension and none carried out in the No.2 Open Cut.

Areas to be cleared of vegetation are delineated in the field by survey. Bulldozers are used to fell the timber, leaving behind habitat trees in accordance with the clearance plan. Felled timber is windrowed or stockpiled for mulching and subsequent reuse on rehabilitation.

Where possible, soil horizons A1 and A2 were stripped and stockpiled separately (refer to Figure 1) and strategically placed for ease of recovery or direct use on rehabilitation. All topsoil stockpiles are signposted, and inspections were undertaken by MCC’s Environmental Staff to assess vegetative cover and weed infestation. Weed control was required on some topsoil stockpiles during this monitoring period principally for Galenia and Paterson’s Curse.

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Soil stripping methods are considered acceptable at this point in time and will continue to be used on-site. Areas where the noxious weed Mother-of-Millions was found to occur were not disturbed and the soil taken directly to the overburden emplacement area and buried. While this may cause a loss of some topsoil, it is considered a better option than spreading the noxious weed across the rehabilitation.

Figure 1 - A1 Horizon Topsoil Stockpile

The volume of soil recovered, soil directly respread on rehabilitated areas, soil currently stockpiled, and soil recovered from stockpiles and respread on rehabilitated areas is displayed in Table 4.

TABLE 4 – APPROXIMATE TOPSOIL VOLUMES FOR THE NO.1 OPEN CUT EXTENSION AND NO.2 OPEN CUT

No.1 Volume No.2 Volume (m3) (m3) Soil Recovered at Start AEMR (topsoil in inventory) 72,500 30,000 Soil Stockpiled at End AEMR (topsoil in inventory) 48,739 30,000 Soil Directly Respread on Rehabilitated Areas (AEMR) 0 0 Soil Recovered from Stockpiles and Spread on 23,761 0 Rehabilitated Areas (AEMR)

2.3 Construction No construction activities occurred during the reporting period.

2.4 Mining Mining operations at MCC are conducted in the following sequence:

1. Removal of vegetation; 2. Topsoil Stripping; 3. Removal of overburden; and 4. Excavation of coal from the exposed coal seams.

Mining of the No.1 Open Cut Extension began on 8 March 2005 and continued throughout this reporting period, with operations taking place as required within a 24-hour day, 7 days per week period. Blasting operations were carried out between 9:00 am to 5:00 pm Monday

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to Friday, except on public holidays. Mining is achieved through open cut methods utilising an electric shovel, hydraulic face shovel, excavators, front-end loaders and rear dump trucks. Mining commenced in Strip 1, in the northern portion. Operations then proceeded to the east, working down through the Fleming through to the Loder Seam. Mining during the reporting period progressed northwards into Strips 14 to 23.

During the reporting period coal mining operations continued in No.2 Open Cut. There is only a section of Lewis coal left in No.2 Open Cut that will be uncovered by dozer push when water level allows. Waste from No.1 Open Cut was emplaced into both the No.1 and No2 open cut mining areas.

The current fleet used for mining the No.1 Open Cut Extension is provided in Table 5.

Most overburden/interburden is drilled and blasted prior to being removed by a P&H 2800 Rope Shovel, CAT 5230 Hydraulic Shovel or a Komatsu PC 3000 Hydraulic Excavator. However, if the interburden layer is too thin the material will be ripped and pushed by a CAT D11 or Komatsu 475 dozer. It is then hauled by a fleet of Komatsu 730E 190 tonne rear dump trucks and sequentially emplaced in the existing No.1 and No.2 Open Cut voids. Material is placed selectively to encapsulate carbonaceous material to minimise the occurrence of spontaneous combustion in the overburden waste dumps. Figure 2 provides a view of the No.1 Open Cut Extension in August 2010.

Coal seams are drilled and blasted or ripped with dozers. coal is removed by hydraulic excavators, the hydraulic shovel or loaders, and transported to the coal crushing plant and product stockpile by rear dump trucks.

Figure 2 - No.1 Open Cut Extension View West Facing (June 2012)

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TABLE 5 - MINING FLEET

Equipment Model No. Work Area

P&H 2800 Electric Shovel 1 Overburden removal Shovel CAT 5230 Hydraulic Face Overburden, interburden and coal 1 Shovel removal Komatsu 3000-6 Hydraulic Overburden, interburden and coal Excavator 2 Excavator removal Overburden, interburden and coal Komatsu 730E (190 Ton) 11 Dump Truck removal CAT 777C (85 Ton) 3 Overburden, coal and rejects

CAT 992G 1 Coal Mining Front End Loader CAT 990H 1 Coal stockpile management Drilling for blasting in overburden, Gardiner Denver 25C 1 interburden and coal Blast Hole Drill Drilling for blasting in overburden, I.R. DML45 1 interburden and coal Surface preparation, road Grader CAT 16H Grader 2 maintenance Water Cart (CAT 777) 70,000 Water Cart 2 Dust suppression, road maintenance litre Dumps, roads, coal and overburden CAT D11R 3 area preparation Dumps, roads, coal and overburden CAT 690D RTD 1 area preparation Dozer Dumps, roads, coal and overburden Komatsu D275-5ax 1 area preparation Komatsu D475-5 Dumps, roads, coal and overburden 2 area preparation

2.5 Mineral Processing MCC produces thermal coal for the export market. High ash coal is mined, crushed and washed through Coal Preparation Plant (CPP) while low ash coal bypasses the CPP.

2.5.1 Coal Crushing and Classification Process Run of Mine (ROM) coal is dumped into a 400 tonne raw coal receival bin by rear dump trucks. The bin has a 450 x 450 mm grizzly to prevent coal choking the chute. Coal is fed from the bin by a variable speed controlled chain feeder onto the No.1 belt conveyor passing under an ERIEZ self-cleaning magnet to remove any ferrous material prior to crushing. Figure 3 displays a photo of the coal crushing area.

The conveyor feeds into a rotary breaker which crushes the coal to a size of minus 50 mm. The rated capacity of the crushing system is 450 tph. Due to the varying qualities and hardness of the coal, the feed rate can be varied by the chain feeder to allow efficient

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operations of the . There was a total of 1,057,027 tonnes of coal crushed during the reporting period.

After crushing, the No.2 belt conveyor system has two ERIEZ self-cleaning electromagnets positioned across the coal stream to remove any ferrous materials. Coal passes under a Coalscan belt ash analyser. If the Coalscan detects high ash coal, it is directed to a high ash stockpile in the Coal Handling & Preparation Plant (CHPP) area. Low ash coal is directed to a bypass bin of 300 tonne capacity. The cut point of the diversion depends upon product specifications of purchase contracts. Product coal is hauled by a CAT 777 truck from the product bin to stockpiles (Refer to Section 2.8 Ore and Product Stockpiles). After passing the coal scan unit, the coal passes under a dual head DETEC metal detector which directs the coal to the washery stockpile for processing if any residual ferrous material is detected. There was a total of 693,458 tonnes of coal that was directed to bypass over the AEMR reporting period.

Figure 3 - Coal Crushing Plant Coal is placed into a receival bin then fed into a rotary breaker.

2.5.2 Coal Preparation Plant Coal that is not designated as bypass is washed in the Coal Preparation Plant (CPP) to reduce ash content to meet contract requirements. The CPP uses a jig as the main method of separation, and has a maximum capacity of approximately 300 tonnes per hour but averages about 150 tonnes per hour. The CPP removes stone and other contaminants from the coal, producing a reject stream and a product stream. The CPP is a closed circuit plant that does not require a settlement pond for recycling of water and disposal of fines slurry. Separation of fine reject material is achieved by using a thickener tank and flocculating the material. Raw pit water is used in the flocculation process at a rate of approximately 100 litres per minute with usage totalling around 12 megalitres per year. A band press filter dewaters the tailings which are then discharged as a solid reject material known as “cake”. The water reclaimed by this process is then recycled in the CPP. Both coarse and fine reject material is trucked back into the pit for disposal at a low level in the mining void. Figure 4 displays a photo of the CPP. During the reporting period, there was a total of 363,569 tonnes of coal washed.

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Figure 4 - Coal Preparation Plant Crushed coal is reclaimed and processed in the CPP.

2.6 Waste Management The main objective of waste management is to minimise the amount of waste generated and ensure responsible handling of all wastes. Waste management services at MCC are conducted by Transpacific Industries (TPI), an OEH approved contractor, who provides a total waste management program to the mine site.

MCC does not receive waste from outside sources unless under the approval of a waste exemption. Such exemptions include organic growth medium and gypsum for mine site rehabilitation.

2.6.1 General Waste Disposal Oil & Grease Containment & Disposal Waste oil from the workshop is contained in a waste oil container and removed from site by Transpacific Industries (TPI). Oily water runoff from the re-fuelling bay drains into a sub- surface 20,000 litre tank. Runoff from the hardstand and wash-down bay passes through a three-staged silt trap and an oil/water separator. The collected silt is routinely removed and waste oil and oily water is removed as required by TPI. The Final Settling Pond contains an oil boom which collects any remnant oil that may be present in the dam.

Rubbish Disposal The disposal of rubbish generated on site is undertaken in accordance with the local ordinances and within existing regulatory guidelines. Currently, scrap steel, plastic bottles and containers (PET), cardboard, wooden pallets, used batteries and aluminium cans are recycled. Putrescible waste is collected bi-weekly and disposed of by TPI.

Sewage Treatment Waste water from the bathhouse, office and workshop facilities is processed through a septic tank system and the effluent is pumped out and disposed of offsite by TPI.

2.6.2 Waste Stream Inspection, Classification and Recycling The WMP identifies and classifies waste streams at MCC and their applicable management, storage and disposal requirements. To ensure that the correct classification is applied to

Annual Environmental Management Report Page 9 July 2011 – June 2012 Muswellbrook Coal Company Limited waste, an inspection of all waste streams are undertaken every six months as well as a weekly service audit conducted by a TPI site representative. Quantities of waste generated are quantified in a monthly report supplied by TPI. Waste classifications in these reports include the following:

Sewerage Printer/Toner Cartridges Oily Sludge Paper Oily Water Plastic Containers/Bottles (PET) Oil Oily Rags General Waste Oil Filters Cardboard Tyres Confidential Paper Documents Rebates (batteries, timber, and scrap metal) There was a significant reduction (2.4%) in general waste, sewerage and hydrocarbon contaminated materials during the reporting period when compared to the previous AEMR period, as demonstrated below in Table 6. Overall, the figures indicate there is awareness among MCC staff and employees to separate and recycle waste materials when possible to reduce the amount of waste going to the local landfill.

Table 6 – Annual Waste Stream Generation (tonnes) Waste Description 2010-2011 2011-2012 General Waste 43.1 33.1 Sewerage 1485.0 1459.3 Oil Filters 2.5 1.1 Oily Rags 0.2 0.2 Fixation Treatment (hydraulic hoses) 3.6 3.4 TOTAL WASTE 1534.4 1497.1 (2.4%)

RECYCLED MATERIALS Co-mingle/Paper-Cardboard 6.384 4.04 Confidential Docs/Secure Destruction 0.54 3.96 Timber 8.78 8.04 TOTAL RECYCLED 15.704 16.04 (2.1%)

REBATE MATERIALS Steel - heavy gauge 22.19 8.7 Steel - light gauge 7.36 0 Batteries 5.676 5.256 Waste Oil 120.4 97.8

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2.7 Overburden & Production Overburden from the No.1 Open Cut Extension was placed in the existing No.1 Open Cut and No.2 Open Cut voids. There was no out of pit emplacement of overburden material during the reporting period. Figure 5 displays in-pit emplacement in the No.1 Open Cut Extension and Table 7 provides production and waste generated over the reporting period.

Figure 5 – No.1 Open Cut Extension In-pit Emplacement (August 2012)

TABLE 7 - PRODUCTION AND WASTE SUMMARY

ANNUAL PRODUCTION

End Next Reporting Reporting Period Period (Estimate) Topsoil Stripped (m3) 6,854 0

29,985 Topsoil Used/Spread (m3) 30,600

Waste Rock (Overburden/Interburden) (kbcm) 6,183 7,099

ROM Coal (kt) 1,065 1,397 Saleable Coal (tonnes) 956,935 1,100,000

The amount of saleable coal produced (bypass + washed) during the reporting period was below the maximum of 2.0 mtpa as specified in Consent Condition 2.3.

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2.8 Ore and Product Stockpiles Product coal is hauled from the product bin by a CAT 777 truck to the stockpiles. There are five product stockpiles with a total capacity of 250,000 tonnes. Product coal is trucked off site (refer to Figure 6) via Muscle Creek Road and the New England Highway to the Ravensworth Coal Terminal (RCT) for train loading. This coal is then transported to the port of Newcastle.

Figure 6 - Product Coal Stockpile

2.9 Water Management The Development Consent for the No.1 Open Cut Extension contains specific requirements for the preparation of a Site Water Management Plan (SWMP) and a Surface and Groundwater Monitoring Plan (SGMP). The primary objective of these two plans is to enable the effective management of on-site water to minimise the impact of mining operations on surface and groundwater resources both on and adjacent to the mine site. There were no changes to the water management system in the reporting period and MCC propose to continue using the Surface and Ground Water Management Plan (SGWP) in 2012-2013.

2.9.1 Water Management System The water management system encompasses seven catchments within the current mining area. Refer to the AEMR Plan in Appendix 1 for an outline of the MCC water management system. Table 8 lists MCC’s water management structures.

The water management system at MCC principally consists of: . Use of the No.1 Open Cut as storage until the end of the No.1 Open Cut Extension project – water level kept below RL150; . Use of the No.2 Open Cut as water storage after completion of mining – groundwater inflows into the pit will gradually decrease because of the head of water in the underground workings; . Gradual reduction of the No.2 Open Cut in-pit emplacement catchment by up to 50%, reducing the amount of water entering the mine water system;

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. Use of the underground workings as water storage; and . Water storage in mine dams for use in dust suppression.

The water management system achieves the effective management of on-site water by: . Meeting the water supply needs of the mine; . Separating clean water runoff produced by undisturbed catchments from sediment laden and contaminated runoff from disturbed catchments; . Using appropriate sediment controls for dirty water; . Recycling and reusing dirty and contaminated water for dust suppression and wash down activities; . Using disused open cuts and underground workings as mine water storage; . Ensuring nil discharge by containing all saline mine water on site and minimising the risk of accidental off site discharge; and . Monitoring surface and ground waters to determine significant impacts to water quality or beneficial use and undertaking remedial action where required. F - Water Management System Diagram TABLE 8 - WATER MANAGEMENT STRUCTURES Restricted Catchment Groundwater Sediment & Erosion Control Dams Recirculation Dams Management Structures (Mine Water) East Emplacement Dam North (MCC25) Dam 1 No.1 Open Cut Void East Emplacement Dam South (MCC23) Dam 2 No.2 Open Cut Void Old Underground East Haul Road Dam Workshop Dam Workings – water storage Final Settling Pond Coal Stockpile Dam Brickworks Dam 1 (MCC 9) Brickworks Dam 2 Blues Crusher Dam (MCC 26) Dam 3 (MCC 27) West Emplacement Dam

2.9.2 Water Classification Water at MCC is classified as either clean water, saline/mine water, dirty water, or potable water.

Clean Water Clean water is water which runs off from undisturbed catchments. Clean water is separated, where practicable, from dirty, saline or contaminated water streams. Clean water may be collected and used under the harvestable rights allowance.

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Saline / Mine Water Saline water generally has elevated salinity and suspended sediment generated from disturbed catchments where coal is mined or handled, including the open cut voids, coal stockpiles, CPP, workshop and haul roads. During the reporting period saline water was kept separate from clean water runoff and was collected and reused for processing water or dust suppression.

Dirty Water Dirty water is stormwater with increased sediment loads principally from disturbed catchments and rehabilitation areas not fully vegetated. Dirty water runoff is collected from disturbed areas using drains and bunds, and minimised by diverting clean water from upslope. It is then stored until suitable for use in dust suppression or processing.

Potable Water Potable water is supplied via a 75 mm diameter pipeline connected to the MSC town water supply. This water is used for amenities in the workshop, washery, office, and bathhouse. Potable water is also used for a high pressure/low volume equipment wash down facility. During the reporting period the average daily consumption was approximately 14 kL per day.

2.9.3 Site Water Catchments To provide more accurate data in recording volumes of water transferred around the site, MCC has installed flow meters in key areas around the mine site.

Volumes of stored water available at MCC are provided in Table 9.

Annual Environmental Management Report Page 14 July 2011 – June 2012 Muswellbrook Coal Company Limited

TABLE 9 - STORED WATER VOLUMES HELD (cubic metres) as of 30 June 2012 Start End Storage Capacity Reporting Period Reporting Period CLEAN WATER Bimbadeen Dam - - - DIRTY WATER Blues Crusher Dam (MCC26) 8,500 8,500 8,500 Brickworks Dam 1 (MCC9) 15,000 12,000 30,000 Brickworks Dam 2 4,000 4,000 20,000 East Emplacement Dam South 9,000 8,000 10,000 (MCC23) East Emplacement Dam North 10,000 8,000 10,000 (MCC25) East Haul Road Dam (MCC24) 6,000 6,000 5,400 Final Settling Pond 9,000 3,000 10,100 Dam 3 (MCC27) 7,600 7,600 8,000 SALINE OR MINE WATER Dam1 30,000 30,000 30,000 Dam 2 19,000 19,000 20,000 Workshop Dam 8,600 8,600 8,600 Open Cut Sump (No.1 Void) 1,000 20,000 varies

Open Cut Sump (No.2 O/C Void) 100,000 100,000 100,000 CONTAMINATED WATER 0 0 0

2.9.4 CPP and Product Stockpile Water Management The existing stockpile water management system continued to be used in 2011 - 2012. Post- stockpile catchment dams were desilted and maintained throughout the reporting period.

2.9.5 Fuel Storage Diesel fuel is contained in five, Class C1 above ground tanks, with a capacity of 110,000L each. The tanks are located 100m from any major buildings and are bunded with earth walls. They are currently listed under MCC’s License for Keeping Dangerous Goods No. 35/021999, issued by Workcover NSW.

2.9.6 Chem Alert System MCC use a web based Chem Alert system to manage chemical use at the mining operation and system users can access the database from the MCC intranet site. The Chem Alert system is a chemical hazard management tool that contains information on the storage, transportation, use and disposal of chemicals. A Dangerous Goods manifest and safe operating procedures for chemical selection and use can be readily accessed from the MCC intranet server. Audits are undertaken with a focus on safe chemical use and storage by the Occupational Health and Safety Committee representatives.

2.9.7 Explosives Explosives are kept on site and are securely stored in accordance with all relevant legislation. A blasting contractor is employed to carry out charging and blasting activities.

Annual Environmental Management Report Page 15 July 2011 – June 2012 Muswellbrook Coal Company Limited

2.10 Other Infrastructure Management A series of investigations into a possible bypass route around Muswellbrook have taken place over a number of years. At least one of the alternative routes is close to the existing No.1 Open Cut overburden emplacement area but there was no notification received by MCC regarding the bypass during the term of this AEMR.

Annual Environmental Management Report Page 16 July 2011 – June 2012 Muswellbrook Coal Company Limited

3 ENVIRONMENTAL MANAGEMENT & PERFORMANCE

3.1 Air Quality Management

3.1.1 Dust Management

The primary objective of air quality management on the mine site is to manage and minimise the impact of dust from mining operations on the environment and nearby residences.

Dust mitigation measures have been divided into control procedures for wind-blown dust and mining generated dust sources.

The main sources of wind-blown dust are from areas disturbed by mining, coal handling facilities and stockpiling areas. Control procedures for wind-blown dust include: . Disturbing only the minimum area necessary for mining; . Reshaping, topsoiling and rehabilitating overburden emplacement areas as soon as practicable after the completion of overburden tipping; . Maintaining coal handling areas in a moist condition using water carts to minimise wind-blown and traffic generated dust; . Promptly cleaning up after any spillage; and . Operating water carts around the coal stockpile area to suppress dust on roadways and the coal stockpiles.

Mining generated dust sources include, haul roads, minor roads, topsoil stripping, topsoil stockpiling, drilling, blasting, removing overburden, mining coal and raw coal receival bin. Control procedures for mining generated dust include: . Watering all roads and traffic areas using water carts; . Sheeting haul roads with hard wearing material; . Controlling haul roads, using marker posts to clearly define edges; . Ripping and revegetating obsolete haul roads and minor roads; . Limiting the development of minor roads and clearly defining their location; . Watering minor roads that are used regularly for access etc.; . Watering access tracks used by topsoiling machinery, during loading and unloading; . Shaping and locating topsoil stockpiles to minimise area exposed to prevailing wind; . Revegetating long term topsoil stockpiles, not used for over 3 months; . Lowering dust aprons during drilling; . Equipping drills with dust extraction cyclones or water injection systems; . Using adequate stemming at all times; . Ensuring blasting occurs in accordance to the Blast & Vibration Management Plan relating to meteorological conditions; . Using automatic sprays when tipping raw coal into the receival bin; and . Fitting automatic sprays and shielding at conveyor transfer points.

Annual Environmental Management Report Page 17 July 2011 – June 2012 Muswellbrook Coal Company Limited

Further control procedures are implemented during periods of high dust emissions and for short term episodic events.

Dust emissions from the premises are controlled by implementing the appropriate dust control methods detailed in the approved Dust Management Plan (DMP).

3.1.2 Air Quality Monitoring Network & RTEMS The current Air Quality Monitoring Network is displayed in Figure 7 and details are provided in Table 10. The PM10 HVAS unit located on the ‘Nisbet’ property is not required by the Development Approval or Environment Protection Licence but is an additional dust management tool undertaken by MCC.

TABLE 10 - AIR QUALITY MONITORING NETWORK Parameter Monitored No. Apparatus Unit / Measured 17 Dust Gauges Depositional dust g/m2.month

TSP High Volume Air Samplers Total suspended 3 3 µg/m (HVAS) particulates (TSP)

Tapered Element Oscillating Fine particulate matter 3 3 µg/m Microbalances (TEOM) (PM10)

PM High Volume Air Samplers Fine particulate matter 3 1 10 µg/m (HVAS) at ‘Nisbet’ (PM10)

Wind speed m/s Wind direction Degrees Temperature oC Meteorological Monitoring 4 Rainfall mm Stations (MMS) Barometric pressure hPa Temperature inversion oC/100m elevation Humidity %

3.1.3 Real Time Environmental Monitoring System The Real Time Environmental Monitoring System (RTEMS) consists of: . Tapered Element Microbalance System (TEOMS) . Meteorological Monitoring Stations (MMS) . A Real-Time Directional Noise Monitoring System . 4 Blast Monitors

There are four RTEMS sites surrounding MCC mining operations. Site locations are displayed in Figure 7, and the monitoring equipment situated at each site is provided in Table 11. Photographs of each site are displayed in Figures 8 to 11.

Annual Environmental Management Report Page 18 July 2011 – June 2012 Muswellbrook Coal Company Limited

Figure 7 – Air Quality Monitoring Network

Annual Environmental Management Report Page 19 July 2011 – June 2012 Muswellbrook Coal Company Limited

Figure 8 – Site 1 Real Time Environmental Monitoring System

Site 1 is located adjacent to Queen Street, North Muswellbrook.

Figure 9 - Site 2 Real Time Environmental Monitoring System

Site 2 is located adjacent to Sandy Creek Road, Muswellbrook.

Annual Environmental Management Report Page 20 July 2011 – June 2012 Muswellbrook Coal Company Limited

Figure 10 - Site 3 Real Time Environmental Monitoring System

Site 3 is located opposite St Heliers Road intersection on Sandy Creek Road, Muswellbrook.

Figure 11 - Site 4 Real Time Environmental Monitoring System

Site 4 is located on an old overburden emplacement west of the No.1 Open Cut Extension

Annual Environmental Management Report Page 21 July 2011 – June 2012 Muswellbrook Coal Company Limited

TABLE 11– MONITORING EQUIPMENT AT REAL TIME ENVIRONMENTAL MONITORING SYSTEM SITES

RTEMS Site 1 RTEMS Site 2 RTEMS Site 3 RTEMS Site 4 Tapered Element Tapered Element Tapered Element Oscillating Microbalance Oscillating Microbalance Oscillating Microbalance - (TEOM) – Fine Particulates (TEOM) – Fine (TEOM) – Fine (PM10) Particulates (PM10) Particulates (PM10) Meteorology Monitoring Meteorology Monitoring Meteorology Monitoring Principal MMS Station (MMS) Station (MMS) Station (MMS) Real-Time Directional - - - Noise Monitoring System Blast Monitor – Queen St - - -

Monitoring Equipment Not Available Real Time: High Volume Air High Volume Air High Volume Air Sampler Sampler (HVAS) – Total Sampler (HVAS) – Total (HVAS) – Total Suspended - Suspended Particulates Suspended Particulates Particulates (TSP) (TSP) (TSP) Dust Deposition Gauge Dust Deposition Gauge Dust Deposition Gauge #7 - #30 #24

3.1.4 Depositional Dust Gauges The monitoring of depositional dust has occurred in the area surrounding the MCC No.2 Open Cut since 1983. Currently there are a total of 17 dust gauges positioned around the No.2 Open Cut and the No.1 Open Cut Extension. All gauges are analysed for insoluble solids, ash residue and combustible matter. The annual average OEH maximum for depositional dust on non-mine owned land is 4.0 g/m2.month. Dust Deposition gauge locations are displayed in Figure 7.

All dust gauges were sampled on a monthly basis and sent to a NATA accredited laboratory for analysis. Samples with excessive contamination, including bird droppings, insects and vegetation, were excluded from the annual average. Contamination was determined on the basis of field observation and laboratory analysis.

3.1.5 TSP High Volume Air Samplers Three TSP HVAS units are located at each of the three TEOM monitoring stations and have been operational since March 2005. Samples are collected over a 24-hour period on the OEH nominated six-day run cycle. Filter papers are then collected and sent to a NATA accredited laboratory for analysis. The locations of the HVAS are detailed in Figure 7.

3.1.6 Tapered Element Oscillating Microbalance (TEOM) Three TEOM’s have been operational since March 2005. The TEOM units continuously

monitor fine suspended particulates (PM10) at three of the Real Time Environmental Monitoring Stations (RTEMS). The data collected by each of the TEOMs is transmitted to Muswellbrook Coal by telemetry on a real time basis.

A picture of a TEOM sampling inlet is provided in Figure 12 and TEOM locations are displayed in Figure 7. An example of the Real Time PM10 data display is provided in Figure 13.

Annual Environmental Management Report Page 22 July 2011 – June 2012 Muswellbrook Coal Company Limited

Figure 12 - TEOM PM10 Monitor

Figure 13 - Real Time PM10 (TEOM) Trend Data Screen

3.1.7 PM10 High Volume Air Samplers

A PM10 HVAS was maintained on a voluntary basis at the dust gauge DM18 location on the ‘Nisbet’ property which is approximately 1km north of Limestone Road just off Sandy Creek Road. Samples are collected over a 24-hour period on the OEH nominated six-day run cycle, and then the filter papers are sent to a NATA accredited laboratory for analysis.

Annual Environmental Management Report Page 23 July 2011 – June 2012 Muswellbrook Coal Company Limited

3.1.8 Meteorological Monitoring Stations During the reporting period, MCC continued to maintain a principal Meteorological Monitoring Station (MMS) on rehabilitated land to the immediate west of the No.1 Open Cut. This station is part of the Real Time Environmental Monitoring System (RTEMS). Three other Meteorological Monitoring Stations, located around the perimeter of the mine property at the TEOM sites, provide supplemental information. All four weather stations continuously relay weather data by telemetry to MCC.

The principal MMS provides 10m elevation wind speed and direction, 2m elevation air temperature, rainfall, humidity, barometric pressure and calculated atmospheric temperature inversion. The inversion calculation is based on the 2m elevation air temperature from the principal MMS and the supplementary MMS at Site 2. These sites were selected due to the RL difference of 88m between the sites, allowing the temperature inversion to be extrapolated and reported over a 100m elevation interval. The supplementary MMSs provide 2m elevation wind speed, direction, and air temperature for the purpose of interpreting TEOM results. Wind direction is referenced to magnetic north.

Photographs of the four RTEMS Sites are provided in Figures 8 to 11. Real-Time meteorological data computer screens are displayed in Figure 14 and Figure 15

Figure 14 - Real Time Meteorological Overview Computer Screen

Annual Environmental Management Report Page 24 July 2011 – June 2012 Muswellbrook Coal Company Limited

Figure 15 - Real Time Temperature Inversion Trend Chart Computer Screen

3.1.9 Meteorological Monitoring Results Meteorological data provided in this report was sourced from the principal Meteorological Station at Site 4 (RTEM 4). Wind, rainfall and temperature results are summarised below. Data recovery for the monitoring period was 99.0%.

Wind Speed and Direction Quarterly wind roses are provided in Figures 16 to 19. Prevailing wind directions were from the southeast during the cooler month of the year (July-September 2011 and April-June 2012) and the north-westerly in the warmer months (October-December 2011 and January- March 2012). These results are generally consistent with the predominant wind patterns in the Hunter Valley.

Annual Environmental Management Report Page 25 July 2011 – June 2012 Muswellbrook Coal Company Limited

Figure 16– Wind rose July to September 2011

Figure 17– Wind rose October to December 2011

Annual Environmental Management Report Page 26 July 2011 – June 2012 Muswellbrook Coal Company Limited

Figure 18 – Wind rose January to March 2012

Figure 19 – Wind rose April to June 2012

Annual Environmental Management Report Page 27 July 2011 – June 2012 Muswellbrook Coal Company Limited

Rainfall Total annual rainfall recorded during the reporting period was 677.1mm, which is above the long-term average of 620.7mm recorded at the nearest Australian Bureau of Meteorology (BOM) site in Muswellbrook (Lower Hill Street). A summary of rainfall during the reporting period, compared to the annual average rainfall at the closest BOM station in Muswellbrook, is provided in Figure 20. MCC recorded rainfall greater than the Muswellbrook historical average in 5 out of the 12 months with November 2011 having the largest difference of 92.3ml.

Muswellbrook Coal 12-month Rainfall Summary July 2011 - June 2012

140 800 125.2

119.7 677.1ml 120 700

600 100

83.4 500 (mm) (mm) 80 74.4 69.2 68.7 400 61.9 60.2 59.8 59.6 56.5 56 60 55.4

46.7 300 44.8 Millimeters Millimeters 43.9 39.2 38.7 36.2 40 35.8 31.7

28.4 200 15.4 20 13.4 100

0 0 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 MCC Monthly Rainfall Total Muswellbrook Historical Avg. MCC Cumulative Rainfall (September 1870) Figure 20 - MCC Monthly Rainfall Total Compared with Muswellbrook Historical Monthly Rainfall Average 2011-2012

Annual Environmental Management Report Page 28 July 2011 – June 2012 Muswellbrook Coal Company Limited

Temperature Maximum temperature recorded was 36.8 °C and the minimum was -0.1 °C. This is within the long term minimum and maximum recorded by the Australian Bureau of Meteorology site at Scone, -4.9 °C and 43.3 °C. A summary of minimum, maximum and average monthly temperatures during the reporting period is provided in Figure 21.

Figure 21 – Temperature Range at MCC 2011-2012

Inversion Monitoring

Inversion strength is measured between the Open Cut meteorological station (Site 4) and the Sandy Creek Road station (Site 2). The sites have an elevation difference of 88 metres and recorded temperatures are used to calculate the temperature differential per 100 metres (inversion strength). Temperatures normally decrease with increase in height above the ground. A temperature inversion is a temperature increase with height. Meteorological conditions, such as temperature inversion, may increase noise levels by focusing sound- wave propagation paths at a single point. The effect on noise levels can be significant. The trend line displayed in Figure 22 illustrates typical inversion data that is available on the MCC’s Real Time Environmental Monitoring System (RTEMS) on a continual basis. Inversions over 3 °C per 100 metres are considered to be strong and occur primarily during the evening to early morning in the cooler months.

Over the reporting period, inversions were monitored and the daily maximum recorded. The days in each month that recorded an inversion level of 3°C/100m or greater (strong inversion) are displayed in Figure 23. There was a total of 61 days during the 12-month period that a strong inversion was recorded, August 2011 being the highest with 12 days.

Annual Environmental Management Report Page 29 July 2011 – June 2012 Muswellbrook Coal Company Limited

Inversion Levels April 26-27, 2006

6

5

4

3 Strong Inversion C/100m)

o Level 2

1

Inversion ( 0

-1

-2

1:50 PM 3:10 PM 4:30 PM 5:50 PM 7:10 PM 8:30 PM 9:50 PM 1:50 AM 3:10 AM 4:30 AM 5:50 AM 7:10 AM 8:30 AM 9:50 AM 1:50 PM 3:10 PM 4:30 PM 5:50 PM 12:30 PM 11:10 PM 12:30 AM 11:10 AM 12:30 PM Time

Figure 22 - MCC Typical Inversion Trend

Temperature Inversion - Days Over 3.0oC per 100m July 2011 - June 2012

14

12 12

10 10 9 8 7 7

Days Days Over 3.0oC 6 5

4 3 3

2 2 2 1 0 0 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Month

Figure 23 – Temperature Inversion – Days Over 3.0 oC/100m 2011-2012

Annual Environmental Management Report Page 30 July 2011 – June 2012 Muswellbrook Coal Company Limited

3.1.10 Depositional Dust Monitoring Results All gauges conformed to the OEH's maximum annual dust criteria of 4 g/m2.month. The mean dust deposition rate for insoluble solids from July 2011 to June 2012 for all monitoring sites was 1.7 g/m2.month. This average is a slight increase from the average reported in 2010-2011 AEMR (1.6 g/m2.month). This level is still substantially lower than those reported in both the 2008-2009 AEMR and the 2007-2008 AEMR (2.0 g/m2.month and 2.4 g/m2.month, respectively). The main reasons for the decrease in depositional dust levels are likely to be due to lower waste production and higher annual rainfall.

Annual average values and historical average values are displayed in Figure 24. The results of the depositional dust monitoring program for the reporting period are presented in Appendix 2. A contour plot showing the annual average dust deposition isopleths based on the available monitoring sites is shown in Figure 25.

As expected, the contour plot indicates higher dust deposition rates near the No.1 Open Cut mining area but the levels quickly drop outside of this area to levels well within the Development Consent criteria.

Annual Average Depositional Dust Results July 2011 - June 2012

4.5 OEH Criteria 4g/m2.month 4.0 3.8

3.5

3.2 3.0 2.9

2.5 2.5 2.3 2.3 2.1 2.0 2.0 2.0 2.0 1.9 1.9 1.9 2.0 1.8 1.8 1.7

Insoluble Soilds (g/m2.month) Soilds Insoluble 1.7 1.6 1.61.6 1.4 1.5 1.4 1.4 1.4 1.3 1.3 1.2 1.1 1.1 1.2 1.1 1.1 1.0 1.0

0.5

0.0 DM2 DM7 DM10 DM14 DM15 DM16 DM17 DM18 DM19 DM20 DM22 DM23 DM24 DM26 DM28 DM29 DM30 Dust Gauge Number

Current YTD Average Historical Average Criteria

Figure 24 - Annual Average (g/m2.month) Depositional Dust Results

Dust deposition gauges outside of the mining lease on privately owned land have shown increases above background from 0.3 to 0.9 at an average of 0.5g/m2.month. The nearest affected residence (Residence 13) dust gauge (DM24) returned an annual average insoluble solids for this reporting period of 1.9 g/m2.month and the background at this site was 1.9 g/m2.month This is less than the background +0.5 g/m2.month for Years 4-9 of the project at this site. Overall, dust deposition insoluble solids levels are within the EIS predictions and the OEH criteria of background +2 g/m2.month.

Annual Environmental Management Report Page 31 July 2011 – June 2012 Muswellbrook Coal Company Limited

Insoluble Solids (g/m2.month) 3.0 2.5 2.0 1.5 1.0 0.5

Figure 25 - Annual Average (g/m2.month) Depositional Dust Insoluble Solids Contour Plot Note: Dust deposition contours are based on the annual average dust deposition gauge data at specific sites and do not show representative levels in the open cut.

Fine Particulate Matter (PM10) Monitoring Results TEOM

Particulate matter less than 10µg mean aerodynamic diameter (PM10) was continuously monitored utilising three Tapered Element Oscillating Microbalances (TEOM). PM10 data collected by the TEOMs was transmitted by telemetry to the on-site RTEMS.

Data Recovery and Results Discussion The TEOMs are a continuous electronic monitoring system that is subject to equipment faults, communication losses, power outages and maintenance time. High data recovery is considered essential and data recovery levels obtained in 2011-2012 were 100%..

Annual average PM10 results for the reporting period were below the Development Consent and OEH short term 24-hour average criteria of 50 µg/m2 maximum at all sites. The long term 2 24-hour annual average PM10 did not exceed the 30 µg/m . Table 12 displays the average PM10 value at each site during the reporting period.

Annual Environmental Management Report Page 32 July 2011 – June 2012 Muswellbrook Coal Company Limited

TABLE 12 - TEOM PM10 AVERAGES - 1 JULY 2011 TO 30 JUNE 2012 Development Consent & Annual Average PM 10 OEH Long Term 24-hour Data Site Number Concentration 3 Annual Average Criteria Recovery % (µg/m ) 3 (µg/m ) 1 13.9 30 98

2 13.9 30 97

3 14.6 30 97

Average of all Sites: 14.0 97.5

A display of the 24-hour average PM10 results for each site during the reporting period is shown in Figures 26 to 28. A table of comprehensive PM10 results is provided in Appendix 2.

3 There was no exceedence of the OEH short term 24-hour average PM10 criteria of 50 µg/m or the long term criteria of 30 µg/m3 at any of the TEOM monitoring sites during the reporting period. The National Environment Protection Measures (NEPM) goal within 10 years is a 3 maximum PM10 >50 µg/m of up to 5 days per year. Monitoring results indicate compliance of the NEPM at all three monitoring locations as well.

Figure 26 - Site 1 TEOM PM10 Monitoring Results

Annual Environmental Management Report Page 33 July 2011 – June 2012 Muswellbrook Coal Company Limited

Figure 27 - Site 2 TEOM PM10 Monitoring Results

Figure 28 - Site 3 TEOM PM10 Monitoring Results

Annual Environmental Management Report Page 34 July 2011 – June 2012 Muswellbrook Coal Company Limited

Nisbet PM10 HVAS

The Nisbet PM10 HVAS is not a compliance monitor required by the Development Consent or EPL but is operated for additional site dust management data. The annual average PM10 HVAS recorded over the reporting period was 11.2µg/m3. Results are displayed in Figure 29 and Table 13 and show the recorded average is well below the OEH maximum annual average of 30µg/m3. The location of the ‘Nisbet’ monitor is indicated on Figure 7.

TABLE 13 - PM10 HVAS AVERAGE – 1 JULY 2011- 30 JUNE 2012

Annual Average PM10 Development Consent & OEH Site 3 3 Data Recovery % Concentration (µg/m )* Annual Average Criteria (µg/m )

Nisbet 11.2 30 100 Notes: * Results are total contribution from all sources.

3 The annual average PM10 is below the predicted impact level of 22.6 µg/m provided in the EIS.

Please note that this monitor only operates on a 6-day schedule which may explain why the annual average was slightly lower at this site compared to the MCC continuous TEOM sites.

Nisbet PM10 July 2011 - June 2012 60

Short Term OEH Criteria 50ug/m3 (24-hr average) 50

40 3 Long Term OEH Criteria 30ug/m3 (Annual Average)

ug/m 30 10 PM

20

10

0 1-Jul-11 7-Jul-11 3-Jan-12 9-Jan-12 1-Jun-12 7-Jun-12 5-Oct-11 2-Apr-12 8-Apr-12 5-Sep-11 2-Feb-12 8-Feb-12 4-Dec-11 6-Aug-11 13-Jul-11 19-Jul-11 25-Jul-11 31-Jul-11 4-Nov-11 3-Mar-12 9-Mar-12 2-May-12 8-May-12 15-Jan-12 21-Jan-12 27-Jan-12 13-Jun-12 19-Jun-12 25-Jun-12 11-Oct-11 17-Oct-11 23-Oct-11 29-Oct-11 14-Apr-12 20-Apr-12 26-Apr-12 11-Sep-11 17-Sep-11 23-Sep-11 29-Sep-11 14-Feb-12 20-Feb-12 26-Feb-12 10-Dec-11 16-Dec-11 22-Dec-11 28-Dec-11 12-Aug-11 18-Aug-11 24-Aug-11 30-Aug-11 10-Nov-11 16-Nov-11 22-Nov-11 28-Nov-11 15-Mar-12 21-Mar-12 27-Mar-12 14-May-12 20-May-12 26-May-12

PM10 Daily (ug/m3) Long Term Criteria Short Term Criteria PM10 Annual Average YTD (ug/m3)

Figure 29 – ‘Nisbet’ HVAS PM10 Monitoring Results

There was no exceedence of the 24-hour short term 50 µg/m2 criteria at this site.

Annual Environmental Management Report Page 35 July 2011 – June 2012 Muswellbrook Coal Company Limited

3.1.11 Total Suspended Particulate (TSP) Monitoring Results Annual Average TSP results for the reporting period were well below the Development Consent, OEH and the National Health and Medical Research Council (NHMRC) long term 2 criteria of 90 µg/m at all sites. The ratio of PM10 to TSP on TSP run days is 48%. This is a similar ratio to those found at other sites in the Hunter Valley. Table 14 displays the average TSP value at each monitoring location during the reporting period. Figures 30 to 32 displays the 24-hour TSP results over the monitoring period. A comprehensive table of TSP results is provided in Appendix 2.

TABLE 14 - TSP AVERAGES - 1 JULY 2011 - 30 JUNE 2012 Annual Average TSP Development Consent & OEH Site Concentration 3 Data Recovery % 3 Annual Average Criteria (µg/m ) (µg/m )* 1 28.7 90 100

2 29.7 90 100

3 30.7 90 100 Average of 29.7 100 all Sites Note: *Results are total contribution from all sources.

The annual average TSP results at all three monitoring sites are below the annual average TSP predictions in the EIS of 53.6µg/m3. The Annual Average remains below maximum criteria.

Figure 30 - Site 1 TSP Monitoring Results

Annual Environmental Management Report Page 36 July 2011 – June 2012 Muswellbrook Coal Company Limited

Figure 31 - Site 2 TSP Monitoring Results

Figure 32 - Site 3 TSP Monitoring Results

Annual Environmental Management Report Page 37 July 2011 – June 2012 Muswellbrook Coal Company Limited

3.2 Erosion and Sediment Control The main objective of Erosion and Sediment Control Plan (ESCP) is to prevent the erosion of soil from the site and its transport downstream resulting in sedimentation of watercourses. This is achieved through the implementation of the following strategies:

. Separating clean water runoff produced by undisturbed catchments from dirty and contaminated runoff from disturbed catchments; . Reducing water runoff velocity; . Controlling flow volume and path; . Constructing sediment control dams at the base of rehabilitated emplacement areas and rehabilitated disturbed areas to improve quality of discharged water; and . Implementing control structures that promote stable landforms.

There are two main natural catchments in the area of mining, associated with Muscle Creek and Sandy Creek. The No.1 Open Cut Extension area contains undisturbed land surfaces that drain towards Sandy Creek; however, some of the runoff is captured by dams. Water from undisturbed catchments in the No.1 Open Cut Extension area is diverted around mining operations by diversion banks and channelled into adjacent watercourses.

Drainage from mine infrastructure areas, including the coal crushing plant and stockpile area, is collected in a dam and is re-used around the mine site for dust suppression. All disturbed or newly rehabilitated areas contain diversion banks (major and minor graded banks) to control the flow of water from catchment areas and to contain dirty runoff on the mine site.

Runoff from disturbed or newly rehabilitated areas is directed to sediment control dams, constructed at the base of spoil emplacement areas, or along graded banks or waterways as appropriate. Sediment control dams are regularly cleaned out to maintain maximum volume and ensure efficient settlement of solids from stormwater.

Sediment mobilisation and erosion is minimised by the incorporation of the following controls:

. The installation of erosion and sediment controls, if required, prior to disturbance of any land; . The restriction of the extent of disturbance to the minimum that is practical and in accordance with the MOP; . The progressive rehabilitation of disturbed land and the construction of drainage controls to improve the stability of rehabilitated land; . The protection of natural drainage lines and watercourses by the construction of erosion control devices such as diversion banks and channels and sediment retention dams as necessary; . The restriction of access to rehabilitated areas; . Management of erosion and sediment control of affected surface watercourses/water bodies, including creek lines within or adjacent to the DA area; and

Annual Environmental Management Report Page 38 July 2011 – June 2012 Muswellbrook Coal Company Limited

. Regular inspection of dams to monitor their efficiency and any required maintenance.

Revegetation of pasture areas, tree plots and tree corridors in the East Emplacement rehabilitation area is preforming well. The rock-lined waterways and the sediment dams are also operating effectively.

3.3 Surface Water Management

3.3.1 Surface Water Monitoring MCC has been monitoring the quality of surface water for many years. The surface water monitoring program includes the following in accordance with the Surface and Groundwater Monitoring Plan (SGMP). . Monthly monitoring of mine site storage dams (Dam 1, Final Settling Pond, and the No.1 and No.2 Open Cut voids) for pH, Electrical Conductivity (EC) and Total Suspended Solids (TSS); . Quarterly monitoring of MCC 7, MCC8, MCC9, MCC23, MCC24, MCC25, MCC26 and MCC27 for pH, EC and TSS; and . Comprehensive water quality analysis is conducted annually at these sites and results can be found in Appendix 3.

Refer to Figures 33 and 34 for the location of surface water monitoring sites. Site descriptions are provided in Table 15.

TABLE 15 – WATER MONITORING LOCATIONS AND DESCRIPTIONS

Site Description of Structure Classification of Structure Reference Restricted Catchment – Mine Water Dam 1 Dam 1 – overflows to Dam 2 Recirculation Dam Restricted Catchment – Mine Water Dam 2 Dam 2 Recirculation Dam No.1 OC Void In Pit Catchment Groundwater Management Groundwater Management No.2 OC Void In Pit Sump Structure Small Borehole pump, Intersects DDH 529 Groundwater Bore St. Heliers Seam, 202 Panel No.2 Underground Intersects the St. Helier’s seam in RDH522 Groundwater Bore the No.2 Underground DDH 604 Groundwater Bore Cut 17 Highwall Large Borehole Pump, Intersects St DDH 607 Groundwater Bore Heliers Seam, No.2 Underground Mine Natural ground surface to Loder RDH 615 Water Monitoring Piezo Seam

Annual Environmental Management Report Page 39 July 2011 – June 2012 Muswellbrook Coal Company Limited

TABLE 15 (CONT) – WATER MONITORING LOCATIONS AND DESCRIPTIONS

Site Description of Structure Classification of Structure Reference MCC7 Muscle Creek Upstream Surface Water Monitoring

MCC8 Muscle Creek Downstream Surface Water Monitoring

MCC9 Brickworks Dam 1 Sediment and Erosion Control Dam

MCC12 Final Settling Pond Sediment and Erosion Control Dam MCC23 East Emplacement Dam South Sediment and Erosion Control Dam MCC24 East Haul Road Dam Sediment and Erosion Control Dam MCC25 East Emplacement Dam North Sediment and Erosion Control Dam MCC26 Blues Crusher Dam Sediment and Erosion Control Dam MCC27 Dam 3 Sediment and Erosion Control Dam MCC1003 Groundwater well Alluvial Aquifer - Sandy Creek MCC1005 Groundwater well Alluvial Aquifer - Sandy Creek MCC1006 Groundwater well Alluvial Aquifer - Sandy Creek MCC1015 Groundwater well Alluvial Aquifer - Sandy Creek MCC1017 Groundwater bore Hard Rock Aquifer - Sandy Creek MCC1018 Groundwater well Hard Rock Aquifer - Sandy Creek RDH616 Groundwater bore Hard Rock Aquifer - Sandy Creek RDH617 Groundwater bore Hard Rock Aquifer - Sandy Creek

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Figure 33 – Surface and Ground Water Monitoring Locations

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Figure 34 – Sandy Creek Ground Water Monitoring Locations

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3.3.2 Monthly Surface Water Monitoring Results Annual average pH, EC and TSS results and range are displayed for monthly surface water monitoring sites in Figures 35 to 37. Monthly and annual comprehensive surface water monitoring results are provided in Appendix 3. Maximum and minimum values are shown in each chart.

pH The annual average pH levels for monthly surface water monitoring sites (Dam 1, Final Settling Pond, and the No.1 & No.2 Open Cut Voids) were slightly alkaline, ranging from 7.8- 8.0. The minimum and maximum pH levels recorded during the reporting period were 7.4 and 8.2 respectively. The pH levels at monthly monitoring sites were within recommended ecosystem pH levels of 6.5 – 9.5 throughout the reporting period.

Figure 35 - Monthly Surface Water Monitoring Annual Average pH Chart

Electrical Conductivity Annual average EC results for monthly surface water monitoring sites (Dam 1, Final Settling Pond, and No.1 & No.2 Open Cut Voids) ranged from 5103 µS/cm to 7854 µS/cm. Across all four monitoring sites, the minimum and maximum EC levels recorded during the reporting period were 3550 µS/cm and 12,100 µS/cm, respectively. Typically, EC levels for mine water are greater than 4000 μS/cm, similar to previous results.

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Figure 36 - Monthly Surface Water Monitoring Annual Average EC Chart

Total Suspended Solids Annual average TSS results for monthly surface water monitoring sites (Dam 1, Final Settling Pond, and No. 1 & No.2 Open Cut Voids) ranged from 13 mg/L to 49 mg/L. The minimum and maximum TSS levels recorded during the reporting period were 6 mg/L and 151 mg/L. TSS results were below 30 mg/L for approximately 75% of the monitoring period.

The Final Settling Pond can receive water of high suspended solids however, water is pumped back to mine water storage areas by a permanent electric pump. This water is used for dust suppression. The No.1 and No.2 Open Cut Voids collect run-off from un-rehabilitated spoil and can show high TSS levels. The No.1 OC Void also intercepts groundwater from the underground storage. The Open Cut Void water is used for spontaneous combustion suppression and recirculated around the open cut which can lead to high TSS values, This water is not released off-site.

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Figure 37 - Monthly Surface Water Monitoring Annual Average TSS Chart

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3.3.3 Quarterly Surface Water Monitoring Results Annual average pH, EC and TSS results and range are displayed for quarterly surface water monitoring sites in Figures 38 to 40. Details of sampling results are provided in Appendix 3. Refer to Figure 33 for the location of the surface water monitoring sites.

pH The annual average pH levels for quarterly surface water monitoring sites (MCC7, MCC8, MCC9, MCC23, MCC24, MCC25, MCC26 and MCC27) were alkaline ranging from 7.9 to 8.4. The minimum and maximum pH levels recorded during the reporting period were 7.4 and 9.2, respectively. Annual average pH levels at quarterly monitoring sites were within recommended ecosystem pH levels of 6.5 – 9.5, throughout the reporting period.

Figure 38 - Quarterly Surface Water Monitoring Annual Average pH Chart

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Electrical Conductivity Annual average electrical conductivity (EC) results for quarterly surface water monitoring sites (MCC7, MCC8, MCC9, MCC23, MCC24, MCC25, MCC26 and MCC27) ranged from 1,255 µS/cm at MCC7, to 7,763 µS/cm at MCC27. The minimum and maximum EC levels recorded during the reporting period were 943 µS/cm at MCC7 and 8,800 µS/cm at MCC27, respectively.

Figure 39 - Quarterly Surface Water Monitoring Annual Average EC Chart

Total Suspended Solids (TSS) Annual average TSS results for quarterly surface water monitoring sites (MCC7, MCC8, MCC9, MCC23, MCC24, MCC25, MCC26 and MCC27) ranged from 8.0 mg/L to 31.0 mg/L. The minimum and maximum TSS recorded during the reporting period were 5 mg/L and 80 mg/L, respectively. TSS for all quarterly monitoring sites was well below the recommended guidelines of less than 120 mg/L for ecosystems and undisturbed surface water.

Figure 40 - Quarterly Surface Water Monitoring Annual Average TSS Chart

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3.4 Ground Water Management The coal seams are the main aquifers in the coal measure strata. The No.1 Open Cut Extension mines through strata and groundwater regimes already disturbed by mining. The disused underground mine workings constitute the major source of groundwater in this area. The No.1 Open Cut Extension extracts remnant coal from the Muswellbrook No.2 and St Heliers Colliery underground workings.

Mining will lower the water levels in the Greta Coal Measures to the base of the Loder Seam over a small area.

Historically, as detailed in the 2002 EIS, groundwater quality parameters (pH and EC) within the No.1 Open Cut Extension area were determined through the analysis of samples from 12 wells which intersect un-worked Greta Coal Measures. Mean EC was 5,535 µS/cm and mean pH was 7.6. The water is not suitable for potable uses or irrigation, and is generally only potentially useful for stock consumption and therefore is considered an unproductive groundwater resource.

Mining the No.1 Open Cut Extension should improve the groundwater regime in the area, because a large portion of mined workings will be removed and replaced with spoil. This will create a better environment for groundwater recovery and may improve groundwater quality in the long term.

The approved Site Water Management Plan (SWMP) continued to apply to the MCC mine site during the reporting period 2011-2012.

3.4.1 Ground Water Monitoring The groundwater monitoring program is based on two bores intersecting the Muswellbrook No.2 Underground workings (Bore DDH529 – Lewis Seam) and St Heliers Colliery workings (Bore RDH615 – Loder Seam). During the reporting period, the monitoring of RDH615 ceased due to mining operations moving through the area of the bore. The ground water monitoring program is conducted on a monthly basis, measuring:

. Groundwater level; . pH; and . EC.

An annual comprehensive water quality analysis is normally undertaken from Bore DDH529 during the month of March, but sampling could not be conducted in March 2012 due to maintenance on the borehole pump and was rescheduled for August 2012 when the pump was operational again. Lab results can be found in Appendix 3.

3.4.2 Ground Water Monitoring Results Historical groundwater results are provided in Appendix 3. Relative level, pH and Electrical Conductivity sampling results for Borehole DDH529/RDH522(piezometer) are shown in Figures 41-42.

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Figure 41 – Relative Level for Underground Workings (Lewis Seam – RDH522)

A groundwater contour plot could not be generated due to insufficient data across the open cut site however a caternary transect plot from the open cut to the Sandy Creek alluvial monitoring bores is provided in section 3.4.2.1.

Figure 42 – Water Quality for RDH522 (Lewis Seam)

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As shown in Table 16, historical ground water quality results, as presented in the 2002 EIS, were compared against the results obtained in this and the previous AEMR periods. Ground water levels (Lewis seam) and water quality on average, including 2011-2012, are similar to the historical results reported in the 2002 EIS.

TABLE 16 - GROUND WATER MONITORING PROGRAM Average Relative Level Average EC Range RDH 522 EC (RL) pH μs/cm (μs/cm) (AHD metres) 2002 EIS- Historical 7.6 5535 154 2007-2008 AEMR 7.4 4881 4510-5710 108-127 2008-2009 AEMR 7.1 4811 4540-5000 131-153 2009-2010 AEMR 6.8 4960 4350-5950 148-158 2010-2011 AEMR 7.2 5119 3590-5930 147-154 2011-2012 AEMR 7.6 5245 4720-5530 135-147

3.4.2.1 Ground Water Monitoring Results - Sandy Creek Area

The alluvial and hard rock aquifers in the Sandy Creek area are a significant lateral distance from the open cut footprint and no impacts have been determined. However, after consultation with the NSW Office of Water, the Site Water Management Plan was revised in June 2011 to incorporate a monitoring and trigger response plan. Ground water depths and quality results are presented in Figures 43-45 and trigger levels in Table 17.

Figure 43 – Sandy Creek Groundwater Depth (metres) History

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Figure 44 – Sandy Creek Groundwater Quality History – pH

Figure 45 – Sandy Creek Groundwater Quality History – Electrical Conductivity (EC)

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TABLE 17 – SANDY CREEK GROUND WATER MONITORING TRIGGER LEVELS WATER LEVELS Lower Upper Historical Water Trigger Trigger Bore/Well Aquifer Level Range Level Level (m)TOC (m)TOC (m)TOC MCC1003 Alluvial 2.3 - 7.9 2.17 8.34

MCC1005 Alluvial 6.6 - 10.9 6.27 11.46

MCC1006 Alluvial 4.2 - 9.7 4.00 10.14

MCC1015 Alluvial 3.4 - 13.3 3.27 13.97

MCC1017 Hardrock 15.5 - 17.7 14.71 18.53

MCC1018 Hardrock 14.8 - 18.8 14.10 19.69

TOC = Top of case reference point. pH

Lower Upper

Bore/Well Aquifer Historical pH Trigger Trigger

pH pH

MCC1003 Alluvial 6.8 - 8.3 6.3 8.8 MCC1005 Alluvial 6.4 - 7.8 5.9 8.3 MCC1006 Alluvial 6.7 - 7.6 6.2 8.1 MCC1015 Alluvial 6.8 - 7.6 6.3 8.1

EC Lower Upper Historical EC Bore/Well Aquifer Trigger EC Trigger EC (µS) (µS) (µS) MCC1003 Alluvial 1030 - 2140 876 2461 MCC1005 Alluvial 1780 - 6550 1513 7533 MCC1006 Alluvial 900 - 1400 765 1610 MCC1015 Alluvial 1758 - 3240 1494 3726

The trigger levels are initiated if monitored conditions are outside the upper and lower trigger levels for 3 continuous monthly results. There were no exceedances of the water level or quality triggers in this reporting period.

A sectional plan depicting the location of the monitoring sites in the Sandy Creek area is shown in Figure 46. To assist in determining if any reversal in ground water gradient or other consequences to depressurisation in the ground water is occurring, a catenary transect has been developed and is presented in Figure 47. The transect clearly indicates there has been no sign of a drawn-down affect in the Sandy Creek area during the reporting period.

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Figure 46 – Sandy Creek Groundwater Monitoring Network – Sectional Plan

Sandy Creek Groundwater Level Transect Topography 30 June 2012 Hard Rock Aquifer Water Level Alluvial Aquifer Water Level

260 No.2 Open Cut 240 *chart is not to horizontal scale *horizonal axis not to scale ) 220

200 metres (AHD 180

LevelRelative 160

140

120

RDH617 MCC1017 MCC1018 MCC1015 MCC1003 MCC1006 MCC1005

HARD ROCK BORES ALLUVIAL BORES

Figure 47 – Sandy Creek Groundwater Level Catenary Transect for 2011-2012

There appears to be no connection between the alluvial and hard rock aquifer.

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3.4.3 Ground Water Extraction MCC holds four licences to extract ground water under Part 5 of the Water Act 1912. The following volumes of groundwater were extracted in this reporting period.

2011-2012 Annual Extraction Entitlement Licence No. Extraction (ML per Annum Limit) Volume (ML) 20BL169014 (borehole DDH529) 498 1,000 20BL169037 (No.1 O/C Void) 0 2,000 20BL169038 (No.2 O/C Void) 975 2,000 20BL170473 (borehole DDH607) 837 3,000

Extraction entitlements were not exceeded during the reporting period.

3.4.4 Water Balance The calculated water balance for 2011-12 was prepared and is provided in Table 18. The water balance indicates a slight water deficit for the year, as predicted in the EIS for a median to wet Year 7 of the No.1 Open Cut Extension. The slight deficit is not considered a major risk to future operations. Sufficient water storage is available in underground workings, site dams and mine voids for future operational requirement.

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TABLE 18 – WATER BALANCE 2011-2012

INPUTS ML/year ML/day No.1 Ground Water Seepage 0.0 2.66 No.1 Surface Water Runoff 0.0 0.00 No.2 Open Cut Void - water pumped to dams (includes surface water runoff and seepage) 975.0 0.00 Change in No.2 Open Cut Void (storage start/end year) 0.0 0.00 Return to Brickworks Dam 48.0 0.13 Return to Final Settling Dam 0.1 0.00 Underground Workings - Dewatering Bores (pumped to surface storage) 1335.0 3.65 TOTAL 2358 6.44 OUTPUTS CHPP Usage 48 0.13 Discharge Off Site 0 0 Dust Suppression - water infusion and sprays (spontaneous combustion) 539 1.47 Dust Suppression - water carts 538 1.47 Evaporation from Dams 16 0.04 Pumped to Council Void 1377 3.76 Return Water to Underground Workings 0 0.00 TOTAL 2518 6.88

2011-2012 Balance -0.44 EIS Prediction for No.1 Open Cut Extension Only - Year 7 -0.43

Overall, the site dams and underground water storage have remained at similar levels to 2010-2011; indicating that site water requirements are currently being met.

3.5 Contaminated Land There are no known areas of contaminated land at Muswellbrook Coal.

3.6 Flora & Fauna Management

The assessment flora and fauna assessment conducted as part of the EIS for the No.1 Open Cut Extension identified existing and potential threatened species. The objectives of the approved Fauna and Flora Management Plan (FFMP) are:

. Comply with the development consent conditions for DA205/2002; . Define the existing environment, including details of any strategic vegetation; . Identify any strategic habitat areas on site; . Outline the strategic mitigation measures to be adopted in the FFMP; . Detail timeframes for clearing and revegetation activities; . Establish methods to manage remnant vegetation;

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. Establish a process for the approval of clearing activities that recognises sensitive hibernation and breeding periods and incorporates pre-clearance inspections; . Detail the process to be adopted if any threatened flora and fauna not identified in the EIS are encountered; . Establish a process for the care of injured animals; . Define the post-mining landscape; . Detail how the post-mining flora will be established; and . Define the measures to protect, monitor and maintain revegetated areas.

The operational controls detailed in the approved FFMP that have been implemented for tree clearing include:

. Restricted clearance of vegetation through areas adjacent to the old Bimbadeen homestead area between March and August due to potential breeding of Grey- Crowned Babbler and Eastern False Pipistrelle; . Collection and stockpiling of topsoil, vegetation and arboreal habitat features; . Implementing feral animal, wild dog and weed control programs; . Assessing kangaroo population and planning a culling program; . Pre-clearance inspections for threatened species and leaving identified hollow bearing trees for 24 hours after adjacent clearing for fauna escape; . Stockpiling of selected felled hollow trees for use in revegetation or relocation to areas adjacent to mining; and . Establishment of roost, den and nest boxes in areas adjacent to mine operations. The site environmental induction presentation includes a section covering the Flora and Fauna Management Plan and highlights the identification of specific threatened species.

A sample of the booklet that is distributed during the induction is shown in Figure 48.

Figure 48 - MCC Threatened Species and Aboriginal Object Identification Booklet

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Inspections of nesting boxes were performed every 6 months during the reporting period (26 October 2011 and 10 April 2012). Results are shown below.

Sugar Glider (2) –no signs of sugar glider activity were observed, but there was a resident mouse observed in the April inspection. Bat (4) – not occupied and no signs of activity were observed Brushtail Possum (2) – one of the two nest boxes had a resident brushtail possum that was observed in the April inspection as shown in Figure 49.

Figure 49 – Brushtail Possum found in Nestbox on 10 April 2012

3.7 Fauna Management for Site Rehabilitation A cull of 100 Eastern Grey (Macropus giganteus) kangaroos was conducted during the reporting period on MCC property primarily around the perimeter of the mine site between February and June 2012. This was conducted under the approval of NPWS.

3.8 Weeds The Land Management Plan (LMP) contains a section on weed control, and specifies that all noxious weeds will be managed and controlled as per the requirements of the Noxious Weeds Act 1993, in consultation with the Rural Lands Protection Board (RLPB) and the Upper Hunter Weeds Authority, utilising a combination of control strategies.

Weed control and eradication techniques used at MCC include: . Promotion of vigorous growth of pasture to out-compete weeds; . Minimisation of area available for weed infestation, through prompt revegetation of bare areas; . Spraying with selective herbicides; and . Physical removal by chipping/slashing.

Mother-of-Millions, classified as a noxious weed, was treated by spraying with selective herbicide in areas near and beside Coal Road. Other noxious weeds treated around the mine site included Prickly Pear, African Boxthorn, Noogoora Burr, Blackberry, Sweet Briar and Paterson’s Curse. Buffer lands and rehabilitated areas of the mine were also sprayed with selective herbicides for Galenia, Castor Oil Bush and Bathurst Burr. There was a total of approximately 12 hectares treated to control noxious weed species around the mine site. MCC maintains records of all herbicides used on the property in accordance Pesticides Amendment (Records) Regulation, Pesticides Act 1999.

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3.8.1 Further Weed Control Improvements Muswellbrook Coal is in the process of preparing a Weed Eradication Plan. The Plan will include: . Consultation with interested parties; . Desktop study and field assessment of weed distribution, density and species occurrence; . List noxious weeds present; . Mapping of the abundance and distribution of noxious and environmental weeds present; . Management and control methodologies including timing of works, control methods, work priorities, and constraints; . Works program linking weed control to rehabilitation, feral animal control, and erosion and sediment control; and . Implementation of a six monthly weed inspection and report (currently in place).

A weed survey on areas to be stripped of topsoil is currently undertaken. Through clearing permits, control mechanisms are implemented, such as weed spraying before stripping to reduce weed seed contamination of topsoil stockpiles. Furthermore, suitable strategies are implemented to reduce weed infestation on stockpiles before and after its use as a topdressing material for rehabilitation.

3.9 Blasting MCC continues its commitment to ensuring that both ground vibration and airblast overpressure continues to comply with the Development Consent and OEH blast criteria. A Blast Information Service Line, phone number 1800-772-799, is advertised in local newspapers and is updated at approximately 9am Monday through Friday. The recorded message gives information regarding the scheduled blast time, location of the blast (No.1 or No.2 Open Cut), maximum instantaneous charge and expected vibration at Queen Street.

3.9.1 Blast Criteria MCC Development Consent Conditions for overpressure level and ground vibration are listed below.

The overpressure level from blasting operations on the premises must not:

i. Exceed 115dB (Linear Peak) for more than 5% of the total number of blasts over a period of 12 months; and ii. Exceed 120dB (Linear Peak) at any time, when measured at any residence or noise sensitive location (such as a school or hospital) that is not owned by the licensee, or subject of a private agreement between the owner of the residence, or noise sensitive location and the licensee as to an alternative overpressure level.

Ground vibration peak particle velocity from the blasting operations at the premises must not:

i. Exceed 5mm/s for more than 5% of the total number of blasts over a period of 12 months; and

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ii. Exceed 10mm/s at any time, when measured at any residence or noise sensitive location (such as a school or hospital) that is not owned by the licensee, or subject of a private agreement between the owner of the residence, or noise sensitive location and the licensee as to an alternative overpressure level.

To achieve compliance with blast criteria, MCC aims to design every blast pattern so as not to exceed 2mm/s of ground vibration at the nearest non-mine owned residence, which is 20% of the OEH maximum ground vibration limit of 10mm/s.

If a blast criteria exceedance is confirmed from Muswellbrook Coal operations, OEH and MSC will be notified immediately.

3.9.2 Best Practice Drill & Blast MCC has adopted best practice drill and blast activities to demonstrate its commitment to blast criteria compliance. The intent of best practice in drill and blast activities is to deliver a high degree of reliability that the actual outcomes of the blast conform to the predicted outcomes.

Best practice drill and blast activities include: . A high degree of accuracy in the placement of drill holes to ensure that design spacing and burden is achieved; . Management of water in the drill holes to reduce fume and dust; . Regular inspections to identify any geological abnormalities that may create a path for the premature release of gaseous products from explosive material; . Loading of the explosive material to ensure that holes are not loaded in excess of the design; . Proper placement of decking charges if required; . Effective placement of good quality stemming material to ensure containment of the blast; . Minimise the sleep time of the blast pattern to minimise the potential for deterioration of the explosive material; . Take into account any adverse meteorological conditions that may be prevailing at the time of the blast (e.g. winds greater than 5m/s averaged over 10 minutes from the mining operation towards residential areas) and, if possible, defer or modify the blast to accommodate those conditions; and . Regular video recording of blasts as a tool to compare actual blast results with predicted outcomes.

3.9.3 Blast Monitoring All blasts are monitored by four automatically triggered blast monitors. The ‘Nisbet’ Monitor (B4) is the closest blast monitor to the No.2 Open Cut and the Queen Street monitor (B1) is the closest to the No.1 Open Cut Extension. The monitors are maintained in accordance with the relevant standards and calibrated annually. Daily testing is conducted by an independent blast consultant to confirm that communication links are active.

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At least 90% of blasts are recorded on video. Each blast is reviewed to compare the actual monitoring results with the predicted results from the blast design.

A photo of a blast monitor is provided in Figure 50. The blast monitoring network is provided in Table 18 and locations are displayed in Figure 51.

TABLE 18- BLAST MONITORING NETWORK

Blast Monitor Location B1 (Queen St) In the vicinity of the nearest non-company owned residence B2 (School) At the Muswellbrook Public School, Roger St, North Muswellbrook B3 (99 Queen St) At the northern end of Queen St, North Muswellbrook B4 (Nisbet) Sandy Creek Rd, approximately 1.2km to the north of the No.2 Open Cut

Figure 50 - Blast Monitor (microphone & geophone) at Queen Street (B1)

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Figure 51 – Blast and Noise Monitoring Locations

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3.9.4 No.1 Open Cut Extension and No. 2 Open Cut Blast Results During the reporting period, 90 blast events occurred, 76 at the No.1 Open Cut Extension and 14 blasts in the No.2 Open Cut.

All four blast monitors were operational throughout the reporting period however a small amount of data was lost due to equipment malfunction or communication issues. The annual data recovery from all units combined was 99.6%.

All blasts during the reporting period were below the Development Consent Condition criteria for maximum overpressure of 120dB(L) and maximum ground vibration of 10mm/s. All blasts were below MCC’s self-imposed 2mm/s vibration criteria for Queen Street. The percentage of the total number of blasts resulting in an overpressure above 115dB(L) during the reporting period was 1.1%. The allowed criteria of blasts above 115dB(L), but not exceeding 120dB(L), is 5%.

Over the reporting period, the maximum ground vibration of 1.00 mm/s and the maximum overpressure 116.5 dB(L) was recorded at the B4 monitor.

A summary of B1 blast monitoring results are displayed in Figure 52. Blast data for all monitors are provided in Appendix 4.

Figure 52 - Queen Street (B1) Blast Monitor Results

3.10 Operational Noise The main objective of the Noise Management Plan (NMP) is to ensure that activities conducted at the mine are undertaken in an appropriate manner and in compliance with the EPL and Consent Conditions. Noise limits are listed in Table 19.

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TABLE 19 - EPL AND CONSENT CONDITION NOISE LIMITS Day Evening Night Location LAeq(15 minute),dB(A) LAeq(15 minute),dB(A) LAeq(15 minute),dB(A) L (1 minute),dB(A) R7 - Watts 36 36 36 44 R13 - McMaster 40 40 40 51 R15 - Collins 35 35 35 46 R16 - Tuckey 35 35 35 46 R17 - Colvin 35 35 35 46 R20 - Gordon 38 38 38 48

The locations of the noise monitoring sites are displayed in Figure 51.

In general, the infrastructure associated with mining operations is well concealed from the public due to the surrounding topography. The industrial areas that have potential for noise generation, including the Workshop and Coal Handling Plant, are well isolated from neighbouring residences. As a result, any concern from neighbouring residents is generally from the operations of mining equipment.

A number of mitigation measures are implemented to reduce the operational noise impacts on surrounding landholders, which include: . Height of the rehabilitation area known as the ‘saddle’ at RL224 and the in-pit overburden emplacement area at RL264, both located to the west of the No.1 Open Cut, act as acoustical barriers to noise transmission towards North Muswellbrook; . The loading of large rocks onto mine trucks is undertaken outside the night time period where possible. The loading procedure for oversized material requires fine material to be loaded into trucks prior to placement of large rocks; . Mining operations are modified or shut down during unfavourable climatic conditions; . MCC’s fleet of Komatsu 730E dump trucks have been retro-fitted with sound attenuation, along with other selected plant which has been identified as emitting excessive noise; . Mobile plant and machinery is maintained and operated in a proper and efficient manner; . Regular road maintenance is carried out to minimise noise associated with corrugated or deteriorated road conditions; . The haul road from the No.1 Open Cut Extension to the ROM area has been planned to follow as much as practicable, gullies and lower elevation areas to minimise the emission of noise to residential areas; . MCC has developed procedures and has conducted training of operators in working methods that minimise noise impacts; . Excavators are used in backhoe configuration to allow larger material and rocks to be carefully ‘placed’ into the back of trucks; and . The dumping of overburden is “in pit” and noise from this operation is shielded from North Muswellbrook by the walls of the pit and the existing spoil emplacement to the west of the Open Cut.

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3.10.1 Real Time Directional Noise Monitoring Noise is continually being monitored through the voluntary installation of a Real Time Directional Noise Monitoring System (BarnOwl), located at MCC RTEMS Site 1 adjacent to Queen Street, North Muswellbrook. The system measures noise from the direction of the No.1 Open Cut Extension providing an accurate representation of mine related noise. Total and spatial selective noise levels are relayed to MCC’s office instantaneously. With regular monitoring of the results, mining operations can be modified or stopped as required to ensure noise criteria is met. Refer to Figures 53 to 55 for examples of the noise monitoring system and computer screen displays.

Figure 53 – Real Time Noise Monitor Microphone Assembly

Noise from the direction of the mine

Total Noise

Noise Criteria

Figure 54 - Noise Trend Screen

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Figure 55 – Directional Noise (BarnOwl) Screen

3.10.2 Periodic Noise Monitoring Program All noise surveys are performed in accordance with the DECC “Industrial Noise Policy (INP)” guidelines, the Periodic Noise Monitoring programme and Australian Standard 1055 “Acoustics, Description and Measurement of Environmental Noise” as specified in the NMP. Two 6-monthly attended noise surveys were undertaken during the reporting period by Global Acoustics.

Each attended noise survey was conducted over a 24-hour period so that each of the Day, Evening and Night-time periods were monitored. Generally, each residence was surveyed twice during the Day period, once during the Evening period, and twice during the Night period for a total of five measurements at each location.

Noise levels during the attended survey were conducted in accordance with the OEH “Industrial Noise Policy (INP)” guidelines and Australian Standard AS 1055 “Acoustics, Description and Measurement of Environmental Noise”. Measurements were taken in third- octave bands with an instrument that has Type 1 characteristics as defined in AS1259-1990 “Acoustics – Sound Level Meters”. The instrument had a current calibration as per manufacturer’s instructions and calibration was also confirmed prior to and at the completion

of measurements with a Sound Level Calibrator. The LAeq (15 minute) noise emission levels, at each monitoring site, were determined.

The actual noise level received at individual residences may vary as a result of:

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. The location of mining equipment; . The elevation of mining equipment; . Impacts from other noise sources; . Prevailing wind conditions; and . Prevailing meteorological conditions.

3.10.3 Periodic Noise Monitoring Results Attended noise monitoring was conducted by Global Acoustics during 15-16 December 2011 and 27-28 June 2012. The purpose of the measurements was to quantify the overall noise levels at the nominated noise monitoring locations and determine the proportion contributed from MCC mining operations.

Noise levels from the December 2011 and June 2012 survey complied with the day, evening

and night DIPNR Consent LAeq(15minute) and also the night LA1(1minute) noise limits at all monitoring locations during the monitoring period. Noise measurement results for both of these surveys are summarised in Table 20-22.

Wind speed and/or temperature inversion conditions may result in development consent criteria not always being applicable. Chapter 7 of the OEH ‘Industrial Noise Policy’ deems a development to be in non-compliance only when the “monitored noise level is more than 3dB above the statutory noise limit specified in the consent or licence condition.” During the first night of the June monitoring there was an exceedance of the LAeq, 15min impact assessment criterion of 35dB at R15 (Table 21). A rear dump truck/engine/exhaust/fan continuum from MCC was regularly audible throughout the measurement with frequent transmission noise surges and impact noise. These sources were responsible for MCC LAeq, 15min of 37dB. This

exceedance of the LAeq impact assessment criterion is not considered significant as it is less than 3dB above the criterion.

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TABLE 20 – DECEMBER 2011 NOISE SURVEY RESULTS (THURSDAY 15 DEC TO FRIDAY 16 DEC 2011)

Location Date And Time Wind VTG Criterion Criterion MCC Exceedance6,8 o 3,7 4,5 Speed C per dB Applies? LAeq dB m/s1 100m2 R7 15/12/11 14:09 3.9 0.5 36 N 33 NA R7 15/12/11 17:17 2.3 0.5 36 Y NM Nil R7 15/12/11 20:13 2.0 3.0 36 N NM NA R7 16/12/11 00:20 2.6 3.0 36 N 27 NA R7 16/12/11 02:33 1.6 3.0 36 N 30 NA R13 15/12/11 13:50 3.8 3.0 40 N IA NA R13 15/12/11 16:51 7.1 0.5 40 N NM NA R13 15/12/11 19:46 3.3 3.0 40 N 36 NA R13 15/12/11 23:57 3.3 3.0 40 N 35 NA R13 16/12/11 02:10 1.6 4.1 40 N 35 NA R15 15/12/11 13:06 6.2 -1.0 35 N NM NA R15 15/12/11 16:17 7.9 -1.0 35 N NM NA R15 15/12/11 19:14 2.6 3.0 35 N <30 NA R15 15/12/11 17:17 3.2 0.5 35 N 35 NA R15 16/12/11 01:28 1.8 4.1 35 N 35 NA R16 15/12/11 12:50 4.8 4.1 35 N IA NA R16 15/12/11 16:01 5.3 05 35 N IA NA R16 15/12/11 17:17 3.3 0.5 35 N IA NA R16 15/12/11 22:25 2.4 3.0 35 N 25 NA R16 16/12/11 01:08 1.5 4.1 35 N <30 NA R17 15/12/11 12:32 6.1 0.5 35 N IA NA R17 15/12/11 15:44 5.7 4.1 35 N IA NA R17 15/12/11 18:33 3.8 0.5 35 N IA NA R17 15/12/11 22:04 3.4 0.5 35 N <25 NA R17 16/12/11 00:48 1.9 4.1 35 N IA NA R20 15/12/11 12:02 4.6 4.1 38 N IA NA R20 15/12/11 15:15 4.8 3.0 38 N IA NA R20 15/12/11 18:00 4.2 0.5 38 N IA NA R20 15/12/11 22:00 3.4 0.5 38 N IA NA R20 16/12/11 02:01 1.3 3.0 38 N IA NA

Annual Environmental Management Report Page 67 July 2011 – June 2012 Muswellbrook Coal Company Limited

Notes: 1. Wind speed in metres per second, data from MCC open cut meteorological station; 2. VTG - Vertical temperature gradient in degrees Celsius per 100 metres altitude, data from MCC open cut meteorological station; 3. Noise emission limits apply for winds up to 3 metres per second (at a height of 10 metres above ground level) and vertical temperature gradients of up to 3 degrees/100m; 4. These are results for MCC in the absence of all other noise sources; 5. NM denotes audible but not measurable, IA denotes inaudible; 6. Bolded results in red are those greater than the relevant criterion (if applicable); 7. Y denotes Yes, N denotes No; and 8. NA in exceedance column means atmospheric conditions outside conditions specified in development consent and so criterion is not applicable.

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TABLE 21 – JUNE 2012 NOISE SURVEY RESULTS (WEDNESDAY 27 JUNE TO THURSDAY 28 JUNE 2012)

Location Date And Time Wind VTG Criterion Criterion MCC Exceedance6,8 o 3,7 4,5 Speed C per dB Applies? LAeq dB m/s1 100m2 R7 27/06/12 14:31 3.9 -0.5 36 N <25 NA R7 27/06/12 17:11 3.9 0.0 36 N 32 NA R7 27/06/12 18:00 2.3 0.1 36 Y 30 Nil R7 27/06/12 22:00 1.9 0.5 36 Y 33 Nil R7 28/06/12 00:35 3.0 0.8 36 Y 26 Nil R13 27/06/12 14:09 4.9 -0.2 40 N IA NA R13 27/06/12 16:40 4.0 0.2 40 N NM NA R13 27/06/12 18:24 2.7 0.5 40 Y 31 Nil R13 27/06/12 22:20 3.7 0.7 40 N 39 NA R13 28/06/12 00:54 2.4 0.0 40 Y 31 Nil R15 27/06/12 13:13 4.0 -0.2 35 N <30 NA R15 27/06/12 16:14 4.0 0.0 35 N NM NA R15 27/06/12 19:47 2.4 0.7 35 Y 34 Nil R15 27/06/12 23:24 2.5 0.4 35 Y 37 2 R15 28/06/12 01:22 1.6 0.5 35 Y 35 Nil R16 27/06/12 13:37 4.0 -0.2 35 N IA NA R16 27/06/12 15:52 4.2 0.2 35 N IA NA R16 27/06/12 19:26 2.7 0.6 35 Y <25 Nil R16 27/06/12 23:06 2.4 0.7 35 Y 34 Nil R16 28/06/12 01:41 1.4 0.6 35 Y 33 Nil R17 27/06/12 12:53 4.9 -0.4 35 N IA NA R17 27/06/12 15:33 5.4 -0.3 35 N IA NA R17 27/06/12 18:54 2.8 0.3 35 Y IA Nil R17 27/06/12 22:48 3.6 1.0 35 N 35 NA R17 28/06/12 01:59 1.7 0.8 35 Y <25 Nil R20 27/06/12 12:25 4.7 -0.6 38 N IA NA R20 27/06/12 15:06 4.1 -0.2 38 N IA NA R20 27/06/12 20:20 3.6 0.6 38 N IA NA R20 28/06/12 00:07 2.4 0.2 38 Y IA Nil R20 28/06/12 02:22 2.6 0.4 38 Y IA Nil

Annual Environmental Management Report Page 69 July 2011 – June 2012 Muswellbrook Coal Company Limited

Notes: 1. Wind speed in metres per second, data from MCC open cut meteorological station; 2. VTG - Vertical temperature gradient in degrees Celsius per 100 metres altitude, data from MCC open cut meteorological station; 3. Noise emission limits apply for winds up to 3 metres per second (at a height of 10 metres above ground level) and vertical temperature gradients of up to 3 degrees/100m; 4. These are results for MCC in the absence of all other noise sources; 5. NM denotes audible but not measurable, IA denotes inaudible; 6. Bolded results in red are those greater than the relevant criterion (if applicable); 7. Y denotes Yes, N denotes No; and 8. NA in exceedance column means atmospheric conditions outside conditions specified in development consent and so criterion is not applicable.

TABLE 22– JUNE 2012 NOISE SURVEY RESULTS (WEDNESDAY 27 JUNE TO THURSDAY 28 JUNE 2012) – additional sampling

Location Date And Time Wind VTG Criterion Criterion MCC Exceedance6, o 3,7 8 Speed C per dB Applies? LA1,1min 1 2 m/s 100m dB 4,5 Night-Time R7 27/06/12 22:00 1.9 0.5 44 Y 43 Nil R7 28/06/12 00:35 3.0 0.8 44 Y 35 Nil R13 27/06/12 22:20 3.7 0.7 51 N 48 NA R13 28/06/12 00:54 2.4 0.0 51 Y 45 Nil R15 27/06/12 23:24 2.5 0.4 46 Y 46 Nil R15 28/06/12 01:22 1.6 0.5 46 Y 41 Nil R16 27/06/12 23:06 2.4 0.7 46 Y 39 Nil R16 28/06/12 01:41 1.4 0.6 46 Y 35 Nil R17 27/06/12 22:48 3.6 1.0 46 N 41 NA R17 28/06/12 01:59 1.7 0.8 46 Y 28 Nil R20 28/06/12 00:07 2.4 0.2 48 Y IA Nil R20 28/06/12 02:22 2.6 0.4 48 Y IA Nil

Notes: 1. Wind speed in metres per second, data from MCC open cut meteorological station; 2. VTG - Vertical temperature gradient in degrees Celsius per 100 metres altitude, data from MCC open cut meteorological station; 3. Noise emission limits apply for winds up to 3 metres per second (at a height of 10 metres above ground level) and vertical temperature gradients of up to 3 degrees/100m; 4. These are results for MCC in the absence of all other noise sources; 5. NM denotes audible but not measurable, IA denotes inaudible; 6. Bolded results in red are those greater than the relevant criterion (if applicable); 7. Y denotes Yes, N denotes No; and 8. NA in exceedance column means atmospheric conditions outside conditions specified in development consent and so criterion is not applicable.

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3.11 Visual, Stray Light The main objectives of Lighting Management Plan (LiMP) on site include the following: . To ensure that sufficient lighting is provided on site to facilitate safety and security to mining operations; . To ensure that lighting is of an appropriate standard and appropriately directed; . To minimise the impact of on-site lighting sources on residents or road users; and . To outline a process to address light spillage issues.

During the reporting period there was minimal impact on the community at night time from lighting at the No.1 Open Cut Extension. MCC’s operations are screened from direct view of residents or the travelling public by existing overburden emplacement areas, and the natural topography of the surrounding area.

3.12 Aboriginal Heritage The main objectives of the Archaeology and Cultural Heritage Management Plan (ACHMP) are: . Minimise disturbance to existing cultural resources within the No.1 Open Cut Extension; . Retrieve cultural information from the identified cultural resources before they are destroyed by open cut mining development; and . Comply with the legal obligations under Federal and State statutes.

As part of the EIS process, Aboriginal cultural heritage surveys were conducted in the No.1 Open Cut Extension area using archaeological consultants and Aboriginal community representatives. Four Aboriginal sites were identified and described as occupation sites being scatters or isolated finds of stone artefacts. Consent to destroy was obtained from the DECC and the artefacts recovered and placed at one site location.

As part of DA205/2002, Section 96 Modification for Area C, Consent Condition 57 states that an Aboriginal Cultural Education program must be developed in collaboration with the Aboriginal community for the induction of MCC personnel and contractors. During the reporting period a program draft was completed and sent to Aboriginal parties, recommended by the DECCW that were likely to have interest in MCC projects, for consultation. Their responses have been reviewed and MCC is currently working with Ungooroo Aboriginal Corporation to finalise and present the programme.

3.12.1 Cultural Management Management of an Aboriginal cultural site at MCC involves the following:

. Site is kept intact and preserved until they are ready to be salvaged; . Site is actively managed to avoid accidental impacts; . Staff (including contractors) are trained and made aware of their responsibilities concerning aboriginal sites and objects by attending the site induction and reading the Aboriginal Object Identification Booklet (refer to Figure 48);

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. The ACHMP spells out clear roles and responsibilities of all staff in managing cultural resources; . Site is clearly identified in the field. Area is fenced and appropriate signage used, where relevant (refer to Figure 54); . Supervisors and plant operators are made aware of the location of the site and the boundaries; and . All plans and operation notes show the location of known sites.

MCC is ultimately faced with the task of managing cultural information by removing it from the landscape. To achieve this, it must devote enough time and financial resources to rescue or salvage cultural information. The cultural information salvaged described in the archaeological salvage report provides educational material, explaining the mine site’s Aboriginal history and cultural significance.

Figure 56 – Aboriginal Cultural Site CB1

3.12.2 Aboriginal Consultation MCC consults with the original Aboriginal community groups involved in the No.1 Open Cut Extension site assessment in accordance with Section 3.3(d) of the No.1 Open Cut Extension Development Consent (205/2002). MCC use consultation principles and strategies consistent with those outlined in the “Guidelines for Best Practice Community Consultation in NSW Mining and Extractive Industries” and will consult with all available aboriginal stakeholder groups. During the reporting period no ground disturbance operations required consultation with Aboriginal groups,

3.13 European Heritage With the approval of Muswellbrook Shire Council, the old Brickworks site, classified as “Local Heritage Significance” was demolished in late May 2012.

No other European Heritage was impacted this reporting period.

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3.14 Spontaneous Combustion The main objective of the Spontaneous Combustion Management Plan (SCMP) is to minimise the occurrence and manage the effect from spontaneous combustion by identification, control, removal, mitigation and prevention in the following areas: . Existing open cut and underground workings; . Drilling and blasting; . Mining of overburden; . Mining of coal; . Emplacement of overburden; . Emplacement of washery reject; and . Coal stockpiles.

The Greta Coal Measures are mined at the No.1 Open Cut Extension and No.2 Open Cut. These measures have a history of spontaneous combustion. Spontaneous combustion has been a long term issue at MCC.

Incidents of spontaneous combustion have taken place over a number of years, particularly in the spoil piles on the western side of the No.1 Open Cut. During the 1980’s this was successfully dealt with by sealing both the burning area and the material liable to spontaneous combustion with up to 20 metres of inert overburden.

Prior to mining in the No.1 Open Cut Extension, there were existing areas of surficial spontaneous combustion caused by previous underground mining. During mining operations these areas have been remediated.

MCC has assisted with ACARP and NERDDC projects investigating spontaneous combustion, including:

. NERDDC Self Heating of Spoil Piles in Open Cut Mines . C1609 Self Heating in Spoil Piles: A Field Trial of Grouting and an Assessment of Cover Materials . C3055 and C6003 Continuation of Monitoring Probes . C9031 Rehabilitation of Spontaneous Combustion Prone Spoil Piles . C9062 Infra Red Thermography for Monitoring Spoil Piles During the reporting period between 30 October 2011 to 30 September 2012, MCC attempted to close off underground drifts between the St Heliers and Muswellbrook underground workings. The goal was to prevent oxygen from getting to an area where spontaneous combustion was occurring underneath the eastern highwall of the No.1 Open Cut. During this time 3,865 tonnes of wet fly ash, sourced from the Bayswater power station, was pumped down hole number 1 at the top of the drift. Refer to Figure 57. Because of the proximity between the Muswellbrook and St Heliers workings, and the slope of the drift, the fly ash did not stay in the intended position and the desired effect was not achieved. After the decision was made to cancel the wet fly ash program, hole number 4 was filled with dry fly ash. This was successful and the decision was made to seal another 3 headings to the north

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of number 4 hole. A total of 517 tonnes of fly ash was pumped down over 4 days to seal these workings.

Figure 57 – Underground Workings (St. Heliers & Muswellbrook) Fly Ash Program Sealing Locations

3.14.1 Quarterly Spontaneous Combustion Reports Quarterly spontaneous combustion reports are provided to both the DTIRIS and OEH. Reports identify existing and new incidents of spontaneous combustion, mitigation procedures and improvements to these procedures, effectiveness of actions, areas capped, areas mined, areas under water infusion and complaints received. The report also includes a plan showing the extent and location of problem areas.

Four quarterly spontaneous combustion reports were submitted to DTIRIS and OEH for the reporting periods July-August 2011, October-December 2011, January-March 2012 and April-June 2012. The majority of affected areas were within the open cut and overburden emplacement areas. Controls were successfully completed on all affected areas. There was a decrease in the occurrence of spontaneous combustion affected areas over the reporting period and all were classified in the “C” category (“Minor: visible steam or smoke – area affected is less than 200m2”) Overall, spontaneous combustion has decreased in comparison to previous AEMRs. A historical comparison, along with a summary of all the quarterly reports during the reporting period, is provided in Tables 23 and 24.

While some new outbreaks occurred in the reporting period, they have been managed to reduce the long term issues associated with spontaneous combustion.

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TABLE 23 – HISTORICAL SUMMARY OF AREAS AFFECTED BY SPONTANEOUS COMBUSTION Total Area Affected by Spontaneous Combustion (m2) 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 July - September 16405 3721 1076 34 135 85 October - December 7690 3918 646.5 70 45 64 January - March 6694 1726 641.5 40 215 71 April - June 25546 661 187 85 95 53 Yearly Average 14084 2507 638 57 123 68

TABLE 24- SPONTANEOUS COMBUSTION (SC) MONTHLY REPORT SUMMARY JULY 2011 – JUNE 2012

SC Areas Capped SC Areas Mined 2 2 No. 1 O/C - Area (m ) (m ) Complaints Reporting Under Water Relating to Month Infusion 2 SC No. 1 O/C No. 2 O/C No. 1 O/C No. 2 O/C (m )

Jul-11 100 0 0 0 0 0 Aug-11 12700 0 0 0 0 0 Sep-11 700 8000 0 0 0 2 Oct-11 0 0 0 0 0 0 Nov-11 0 0 0 0 0 0 Dec-11 4 0 0 0 0 0 Jan-12 0 0 4 0 0 0 Feb-12 1000 0 0 0 0 0 Mar-12 0 10 0 0 0 0 Apr-12 3500 0 0 0 0 0 May-12 4000 0 0 0 4300 0 Jun-12 0 0 8 0 4300 0 * SC = Spontaneous Combustion

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3.14.2 Bushfire The main objectives of the Bushfire Management Plan (BMP) are as follows: . Activities on site are managed to minimise the risk of outbreak of fire; . Fuel loads are contained to acceptable levels to moderate any fire intensity; . Hazard mitigation measures are in place to contain an outbreak of fire should one occur; and . Arrangements are in place to liaise with and support the Rural Fire Service (RFS) should an outbreak of fire occur within the DA area.

There were no incidences of bushfire threat or outbreak on the mine site during the reporting period. The annual Bushfire Site Inspection Risk Assessment was conducted on 2 August 2011.

3.15 Mine Subsidence There is mine subsidence caused by previous underground mining operations within the No.1 Open Cut Extension area. The area requires ongoing inspections and monitoring of spontaneous combustion due to ‘potholing’ of collapsed underground workings.

Any subsidence cracks or ‘potholing’ identified are promptly filled with inert material and compacted, to minimise air transmission to the underground workings.

3.16 Hydrocarbon Contamination Above ground fuel storage tanks are bunded with earth walls to contain any spillage which may occur. Waste oil from the workshop is stored in a waste oil tank. Oily water runoff from the re-fuelling bay drains into a sub-surface 20,000 L tank. Runoff from the hardstand wash- down bay passes through a three-staged silt trap and an oil/water separator. The collected silt is routinely cleaned out, and waste oil is removed as required by an OEH approved contractor.

The Final Settling Pond Dam has an oil boom which contains any oil that may be present on the dam’s surface. Surface water monitoring of the Final Settling Pond Dam demonstrates that hydrocarbon contamination controls were successful. Oil and grease results were less than 2 mg/L on all sampling occasions during the reporting period.

Hydrocarbon management controls were successful with no reportable hydrocarbon contamination incidents during the reporting period. MCC adopts continuous improvement in developing additional management systems and safe operating procedures for hydrocarbon storage.

3.17 Methane Drainage/Ventilation There were no methane drainage or ventilation issues associated with the No.1 or No.2 Open Cut operations in this reporting period. There are a number of boreholes intersecting the underground workings that are used for gas and water monitoring. These boreholes are capped and opened only for monitoring purposes.

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3.18 Public Safety During the reporting period public safety was managed in accordance with current MCC procedures. Fences surrounding the Open Cut operational areas were inspected. Repairs including the replacement of sections were undertaken to provide a minimum standard of 5 strand wire rural fence (or equivalent), with sign posting warning of mining operations.

A security patrol is conducted by a local security firm over weekends and other nominated periods (Christmas, shutdowns, etc.) when the site is not manned.

Fences along the Muswellbrook Coal property boundary adjacent to Queen St in North Muswellbrook and along Sandy Creek Road were maintained during the term of this report.

3.19 Other Issues and Risks Prior to the advancement of each mining strip an assessment for potential infrastructure damage from mining operations was carried out. The assessment includes blast vibration design and impact studies (fly-rock, blast design, etc.) for infrastructure, including buildings, fuel storage and coal processing facilities.

No incidents of damage to surface infrastructure were recorded in this AEMR reporting period.

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4 COMMUNITY RELATIONS

MCC undertakes community consultation by way of ongoing direct contact with nearby neighbours through meetings, telephone contact, Community Consultative Committee and operating a toll free 24-hour Environmental Contact Line (1800 600 205).

4.1 Environmental Complaints Muswellbrook Coal operates a toll free 24-hour Environmental Contact Line, where residents can be connected with the mine personnel directly or leave details about an enquiry or complaint. The Environmental Contact Line number is 1800 600 205, and is advertised bi- weekly in the Hunter Valley News and the Muswellbrook Chronicle.

On receiving a complaint, MCC Technical Services staff promptly investigates and isolates the source of the complaint and reports back to the complainant with the findings. The recording of environmental complaints and the operation of the Environmental Contact Line is conducted in accordance with the MCC Environmental Protection Licence and Development Consent Conditions.

During the reporting period MCC was responsible for: . maintaining the complaint recording system; . ensuring that an initial response was provided to the complainant immediately or within 24 hours of receipt of complaint; and . ensuring all complaints were entered into a database and logbook.

The MCC complaints logbook and database includes the following details for all complaints: . Date and time of complaint; . Any personal details the complainant wishes to provide; . The nature of the complaint, including time and duration of incident; . Action taken by MCC in relation to complaint, including any follow-up contact with the complainant; and . If no action was taken by MCC, the reason why no action was taken.

A summary of the complaints are provided in Appendix 5. Figure 58 displays the number of complaints in each category that were received and Figure 59 shows the distribution of complaints by complainant.

There were a total of 13 complaints recorded during the reporting period. In comparison, this was a slight increase in the number of complaints recorded during the previous AEMR period, but generally, represent a downward trend since 2006.

• 2010-2011 (10 complaints) • 2009-2010,(14 complaints) • 2008-2009 (29 complaints) • 2007-2008 (46 complaints) • 2006-2007 (101 complaints)

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The complaints were lodged by 9 individual complainants with one complainant registering 4 of the complaints (31%).

Six complaints concerning operational noise activities were recorded during the reporting period. This represents 46% of the total number of complaints received. MCC received 4 of these complaints from one individual. To address the concerns of this resident, attended noise monitoring was conducted on several occasions to check that noise levels were compliant. Noise is continually monitored using the Real Time Directional Noise Monitoring System which is located at Site 1 adjacent to Queen Street, North Muswellbrook. The Real Time Directional Noise Monitoring System detects noise from the direction of the No.1 Open Cut Extension. Mining operations are modified or ceased if noise reaches elevated levels. Sound attenuation and broad spectrum reversing alarms are installed on operating plant to reduce noise impacts.

Blasting noise/vibration complaints during the reporting period comprised 23% of the total number of complaints received. All three complaints were from 3 different blast events. All blasts complied with EPL and Development Consent conditions.

There was 1 odour and 1 smoke complaint during the reporting period which comprised 15.5% of the total number of complaints received. These complaints were associated with the dust/smoke and smell that arises from mining of spontaneous combustion affected areas.

2 complaints (15.5% of total received) was recorded as “Other” and dealt with road truck safety and accidental spillage from one of MCC’s coal haulage contractors.

There were no complaints registered during the reporting period regarding lighting.

Figure 58 - Complaint Categories

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Figure 59– Complainant Breakdown

4.2 Community Consultation MCC personnel maintain contact with nearby residents and are committed to continually fostering and developing strong links with the community.

4.2.1 Community Consultative Committee MCC utilises a Community Consultative Committee (CCC) to provide information regarding mine operations to the local community. The CCC is comprised of 3 council representatives, three community representatives and two MCC representatives. The aim of the committee is to provide an effective communication mechanism to ensure members of the local community have adequate information on mining and environmental matters. CCC meetings are held quarterly at the MCC office and committee members are actively involved in the review of environmental monitoring data and are kept up to date on mining operations through presentations and site visits.

Meetings were held on the:

• 6 September 2011; • 13 December 2011; • 6 March 2012; and • 5 June 2012.

4.3 Community Participation Muswellbrook Coal contributed time and resources for several community activities during the reporting period.

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• MCC participated in the “Bursting with Energy Expo” as part of the Upper Hunter Regional Show held in March 2012. The marquee, manned by community representatives from all the mining operations in the Muswellbrook Shire, presented activities, displays and information about the mining industry (Figure 60). • Sponsorship to support the Beef Cattle Section at the 2012 Upper Hunter Regional Show • MCC was a Sponsor and active participants in MSC’s Solar Boat Challenge for local schools in October 2011 (Figure 61).

Figure 60 – Bursting with Energy Expo marquee displays and activities – Upper Hunter Regional Show 23-24 March 2012

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Figure 60 – Solar Boat Challenge held at the Denman Pool on 19 October 2011

• Other community donations made through the reporting period: o McCully’s Gap Hall Association – replacement of flooring o Muswellbrook Chamber of Commerce – Creative Arts Fair o Scone Arts & Crafts – kitchen refurbishment project o Variety Children’s Charity “Visions for Life” – unit at Muswellbrook Hospital o Muswellbrook Oncology Unit – chemo equipment for Muswellbrook Hospital o Scone Arts & Crafts Centre – kitchen upgrade o Roger Street School o Dunmore Lang School o St Josephs High School o Muswellbrook Polocrosse – sponsorship for 2012 Carnival Polocrosse o Muswellbrook Shire Community Carols by Candlelight – programme booklet o Muswellbrook Public School - Annual Prize Giving Day o Muswellbrook High School – year end presentations o Upper Hunter Community Services – MOOSH program o Upper Hunter Shire Council – Young Endeavour Scheme o Upper Hunter Conservatorium of Music – music scholarships o Upper Hunter Education Foundation – University scholarship programme o Hunter Valley Research Foundation – research o Westpac Rescue Helicopter – Black Coal Cup Charity Golf Day 4.3.1 Incentives Program – Buffer Land Rehabilitation MCC applied for and obtained a grant from the Hunter Central Rivers Catchment Management Authority (HCRCMA) for a salinity reduction land rehabilitation program in the Muscle Creek catchment area in 2008. The funding for the project was jointly provided by MCC and the HCRCMA. The land was located along Muscle Creek and the New England Highway.

The project involved the exclusion and management of cattle from riparian and groundwater recharge areas by fencing, providing off stream cattle watering, reducing the population of the invasive weed Juncus acutus (Spikey Rush) and planting over 3000 native trees and shrubs (May-June 2008).

HCRCMA representatives conducted an inspection of the project areas in December 2011 and reported that the progress after 3.5 years was exceptional. Refer to Figure 62 for photo of tree development and Juncus acutus control in project areas near New England Highway.

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Figure 62 – Juncus acutus control and native tree development

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5 REHABILITATION

The objectives of the Land Management Plan (LMP) are to reduce the impact of mining operations on existing native flora and fauna species, implement sustainable land practices and enhance habitat connectivity within the site and surrounding areas. This will be achieved by: . Preventing land degradation and rehabilitating areas that have been subjected to land degradation; . Progressively rehabilitating disturbed areas; . Controlling weeds and feral animals; . Ensuring that all suitable topsoil is recovered and segregated according to soil properties; and . The enhancement of agricultural productivity across the entire site.

The extension of the No.1 Open Cut is set amongst an area that has been affected by previous open cut and underground mining activities: . No.1 Colliery (underground) – 1907 to 1980; . No.1 Open Cut – 1944 to1977 and 2001 to 2002; . No.1 Open Cut Extension – 2005 to current; . Common Open Cut – January 1992 to June 1992; . St Heliers Colliery (underground) – 1923 to 1966; . No.2 Colliery (underground) – 1980 to 1997; and . No.2 Open Cut – 1965 to current.

Surrounding land uses include a combination of agricultural activities (beef cattle grazing), light industrial and rural-residential.

All overburden mined during the No.1 Open Cut Extension will either be placed back in the No.1 Open Cut void and ensuing work areas, or the No.2 Open Cut. The areas disturbed as part of the No.1 Open Cut Extension will be rehabilitated as an integral part of the open cut mining process. Methods of rehabilitation used for the No.1 Open Cut Extension will be very similar to those used for the No.2 Open Cut and will follow guidelines originally recommended by the Department of Primary Industries (Mineral Resources).

The original No.1 Open Cut MOP was approved in February 2005 and the No.2 Open Cut MOP variation now entitled “Muswellbrook Coal Company Open Cut Operations” was approved by DPI in May 2007. In addition, A MOP amendment was granted approval by DTIRIS on 4 March 2011 that allows MCC to extend operations to an area north of that currently approved. This area was called “Area C”. Rehabilitation was conducted generally in accordance with the MOP.

5.1 Buildings During the reporting period a cover was installed over the lube bay.

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5.2 Rehabilitation of Disturbed Lands

5.2.1 Rehabilitation Process The existing strategy at Muswellbrook Coal for rehabilitation is as follows: • Overburden waste dumps are initially shaped by D11 or 475D tracked dozers. • Rock raked with a D6 sized tracked dozer to remove rocks greater than 20cm in size. Raked rock is later used to construct rock lined drains. • Contour banks were constructed in accordance with the Erosion and Sediment Control Plan. • Major drains are constructed in accordance with Department of Natural Resources Draft Guidelines for Establishing Stable Drainage Lines on Rehabilitated Mine Sites (1999). • Topsoil is recovered by front end loader or excavator and hauled by trucks from topsoil stockpiles and spread by a D6 tracked dozer to a depth of approximately 10cm. • Gypsum is applied to the topsoil at a rate of 7-10 tonnes per hectare. The area is then ripped by a D6 dozer along the contour in preparation for planting. • Where available, green-waste mulch, compost or organic growth medium (OGM) is spread at a rate of approximately 100 tonnes per hectare. • Prior to seeding, the area is ploughed with a stubble bladed plough to incorporate topsoil and ameliorative materials. If ground conditions require, a light harrow may be needed following pasture seeding operations. • Rehabilitated areas are planted with a combination of pasture and native trees (refer to Figure 63). Native trees are typically planted via direct seeding in plots, situated at strategic locations throughout the shaped landform. MCC is currently planting an increased percentage of trees to allow development of wildlife corridors between Skelletar Ridge and Bells Mountain. Overall percentage of trees across the entire site will be over 50%.

Figure 63 – Contour Bank and Tree Seed Plots

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5.2.2 Species Selection A number of vegetation species are utilised in the rehabilitation, refer to Table 25. Species vary depending upon the seasonal requirements and the type of cover that is required due to topography and other physical factors. Areas that are prone to spontaneous combustion or situated on steep slopes are sown to pasture using a variety of vigorous growing pasture species. The pasture seed mix is applied at a rate of 60 kg/Ha. Fertiliser (Granulock 15) is mixed into pasture mix at a rate of 200 kg/ha.

The tree seed mix, applied at 8 kg/ha, contains a combination of Acacia and Eucalypt species and is pre-treated and blended with fertiliser (Dynamic Lifter) at 50kg/Ha at time of seeding. Forested areas are an important component of mine site rehabilitation, refer to Figure 64. Trees provide a stable long term landform and add to the visual amenity of the surrounding area. Trees also provide the necessary habitat for the reconstruction of valuable ecosystems that assist in the re-colonisation of fauna across the mine site and provide a corridor for movement into adjacent remnant vegetation.

Acacia saligna has been removed from the MCC rehabilitation species list. DTIRIS does not support the use of Acacia saligna for mine rehabilitation in the Hunter Valley. The species is non-endemic to the Hunter Valley and there is concern that the species may become a dominant monoculture. MCC has not removed any previously sown Acacia saligna but will monitor the spread of the plant.

TABLE 25 - REHABILITATION SPECIES LIST NATIVE TREE SPECIES PASTURE SPECIES Botanical Name Common Name Botanical Name Common Name Eucalyptus camaldulensis River Red Gum Cynodon dactylon Couch Eucalyptus citriodora Lemon Scented Gum Chloris gayana Pioneer Rhodes Eucalyptus cladocalyx Sugar Gum Lolium rigidum Wimmera Rye Kangaroo Valley Eucalyptus crebra - Lolium perenne Perennial Rye Broad-leaved Red Eucalyptus fibrosa Medicago sativa Lucerne Ironbark Eucalyptus molucanna - Trifolium repens Haifa White Clover Trifolium Eucalyptus punctata - Subterranean Clover subterraneum Eucalyptus tereticornis Forest Red Gum Rye Corn and/or Millet Acacia concurrens - Acacia deccurrens Black Wattle Acacia falcata - Acacia decora -

Acacia filicifolia Fern Leaf Wattle Casarina glauca - Corymbia maculata - Note: Legumes are inoculated and lime coated.

Annual Environmental Management Report Page 86 July 2011 – June 2012 Muswellbrook Coal Company Limited

5.2.3 Wildlife Corridor MCC intends to link existing remnant vegetation in Bells Mountain and Skelletar Ridge areas north and south of the lease area by planting corridors of native vegetation across the lease area, creating a viable wildlife corridor. This strategy was developed in the Land Management Plan and is based on the Department of Primary Industries Synoptic Plan. Sections of the corridor are currently in place across the No.2 Open Cut and infill tree plantings will be conducted to complete a continuous corridor, refer to Figure 64 for a photograph of a typical corridor planting at MCC. Rehabilitation planning for the No.1 Open Cut includes the incorporation of native vegetation areas to continue the corridor from the No.2 Open Cut.

Figure 64 – Existing Wildlife Corridor Area at MCC

5.2.4 Description of Areas Rehabilitated There was a total of 4 hectares of new rehabilitation completed during the reported period. Some older rehabilitated areas in both the No.1 and No.2 Open Cut, classified as “dehab”, were removed as part of the planned progression of mining operations. This area totalled 7.47 hectares. In addition, some of the older rehab, previously reported as pasture (11.48 hectares), was planted with trees in June 2012. Details of these areas, including a rehabilitation maintenance summary for the reporting period, can be found in Table 26 and Table 27, respectively.

As noted in the 2010-2011 AEMR, the estimated rehabilitation target for the 2011-2012 reporting period was 377.05 hectares. At the end of June 2012, the total area rehabilitated was 93% of this target, which was mainly due to wet weather conditions (accessibility) and the fact that 7.47 hectares of “dehab” was not accounted for in the estimate.

The AEMR Plan, which includes rehabilitation details, is provided in Appendix 1.

The rehabilitation commitments indicated in the amended MCC Open Cut Operations MOP (March 2011), specified a total rehabilitated target of 365.4 hectares would be reached by 31 December 2012. At the end of this reporting period, 30 June 2012, the rehabilitated area on site totalled 350.76 hectares, which is 94.7% of the MOP rehab target.

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A rehabilitation trial conducted in 2007-2008 to evaluate soil structure and fertility with use of composted green waste from the Muswellbrook Shire Council Waste facility indicated that the compost was very effective in helping to establish newly seeded pasture areas and young tree seedlings. With this success, the application of 100 tonnes per hectare of composted green waste, when available, has become an option for MCC’s rehabilitation process.

In 2007, Organic Growth Media (OGM) was applied to a rehabilitation area in No.2 Open Cut in place of topsoil before seeding operations for both pasture and trees commenced. OGM is designed to assist plant growth and plant nutrient and water retaining properties. As shown in Figure 65, the use of this material has proven to be quite successful and has become another viable option when topsoil is in short supply.

Figure 65 – View of the Western Area Rehab of the No.2 Open Cut – OGM Trial Area

Annual Environmental Management Report Page 88 July 2011 – June 2012 Muswellbrook Coal Company Limited

TABLE 26 - REHABILITATION SUMMARY 2011-2012

AREA AFFECTED / REHABILITATED (hectares)

Next Report To Date Last Report (Estimated) A MINE LEASE AREA A1 Mine Lease Area: CCL 713, ML 1304 and ML1562 1778 1778 1778 B DISTURBED AREAS B1 Infrastructure Area (total No.1 and No.2) 54.8 55.8 49.4 Active Mining Area No.1 O/C 46.5 35.9 41.4 B2 (excuding items B3-B5 below) No.2 O/C 46.1 46.1 46.1 Waste Emplacements No.1 O/C 22.2 28.0 40.0 B3 (active/unshaped/in or out-of-pit) No.2 O/C 63.1 63.1 63.1 Tailing Emplacements No.1 O/C 0 0.0 0.0 B4 (active/unshaped/uncapped) No.2 O/C 0 0.0 0.0 Shaped Waste Emplacement No.1 O/C 21.2 16.9 6.4 B5 (awaits final vegetation) No.2 O/C 1.5 1.5 1.5 No.1 O/C 144.7 136.6 137.2 ALL DISTURBED AREAS No.2 O/C 110.7 110.7 110.7 C REHABILITATION PROGRESS Total Rehabilitation Area C1 350.66 346.65 357.5 (except for maintenance) D REHABILITATION ON SLOPES

D1 10 to 18 degrees 45.7 45.7 45.7

D2 Greater than 18 degrees 0 0 0 E SURFACE OF REHABILITATED LAND No.1 O/C 82.6 89.2 83.2 E1 Pasture and grasses No.2 O/C 159.2 167.6 159.2 No.1 O/C 37.9 24.9 52.7 E2 Native forest/ecosystems No.2 O/C 71.0 64.9 62.4 E3 Plantation and crops 0 0 0

E4 Other (include non-vegetative outcomes) 0 0 0

F DE-HAB - disturbed areas previoulsly rehabilitated, figures reflected in Section E No.1 O/C 5.14 0.0 0.60 F1 Pasture and grasses No.2 O/C 0.0 0.0 0.0 No.1 O/C 0.0 0.0 0.0 F2 Native forest/ecosystems No.2 O/C 2.33 0.0 8.65 G SURFACE CONVERSION - previously reported pasture (cover crop) areas planted to trees, hectares reflected in Section E) No.1 O/C 11.48 0.0 0.0 G1 Pasture/Cover Crop areas planted to Trees No.2 O/C 0.0 0.0 0.0

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TABLE 27 - MAINTENANCE ACTIVITIES ON REHABILITATED LAND 2011-2012 AREA TREATED (Ha) Comment / Control Strategies / NATURE OF TREATMENT Report Next Treatment Detail Period Period Additional erosion control works 0 0 NA (drains, re-contouring, rock protection) Re-covering (detail - further topsoil, subsoil 0 0 NA sealing etc.) Soil Treatment (detail - fertiliser, lime gypsum 0 0 NA etc.) Treatment / Management Slashing was conducted along fire breaks (detail - grazing, cropping, 0 0 in accordance with the Bushfire slashing) Management Plan Re-seeding / Replanting (detail - species density, season 0 0 etc.) Areas of major occurrence of weeds (Galenia, Castor Oil Bush, Patterson’s Adversely Affected by Weeds 12 12 Curse) were treated with selective (detail – type and treatment) herbicide and will continue during the next reporting period Feral Animal Control Not undertaken during this reporting (detail – additional fencing, 0 0 period trapping, shooting, baiting etc.)

5.3 Rehabilitation Monitoring In November 2008 MCC commenced a detailed program of rehabilitation monitoring which would assist in demonstrating some of the key indicators/criteria required for mine closure. In assessing a self-sustainable ecosystem, the program provides a mechanism to identify positive recovery trends and rapid detection of rehabilitation failure, along with detailed remedial action as required. This program includes both Reference and Rehabilitation Monitoring sites as indicated on the location map in Figure 66.

A total of six Permanent Reference sites have been established on MCC property representing both native woodlands (3) and exotic grazing pasture (3). Sites are spread out where possible to maximize the spatial distribution and subsequent variations in community composition across the local landscape, but were not situated on areas subjected to subsidence.

Rehabilitation Monitoring sites were also selected to represent final land use, vegetation community type and year of establishment. These sites were considered to be representative of the rehabilitation area as a whole or were similar to and representative of other smaller areas of rehabilitation and include 4 Woodland and 3 Pasture rehabilitation monitoring sites situated on the Eastern Emplacement area (2), No.2 Open Cut In-pit dump area (2), and No.1 Open Cut rehab areas (3).

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Monitoring activities at these sites were conducted by DnA Environmental and Carbon Based Environmental from 2008-2010. The methodology used for monitoring was originally developed by CSIRO and has been accepted and widely utilised for ecological assessment on mine rehabilitation areas. These methodologies are a combination of Landscape Function Analyses (LFA), comprehensive soil analyses, and an assessment of ecosystem characteristics.

A review of the monitoring program to-date was conducted during the reporting period. The review concluded that previous results indicated that the majority of woodland and pasture rehabilitation sites were establishing well but there was a general trend of a lack of vegetation diversity with respect to the native species when compared to reference sites, across all rehabilitation sites.

In the review, it was recommended that all rehabilitation sites be re-monitored. This would include 6 reference sites and 12 rehabilitation sites. A suggestion was also made to give consideration to only measuring and reporting on the revised set of completion performance indicators presented in the review in addition to addressing the shortfalls of each site with respect to meeting completion targets.

Rehabilitation progression against mine closure criteria will be provided in the 2012-2013 AEMR.

Annual Environmental Management Report Page 91 July 2011 – June 2012 Muswellbrook Coal Company Limited

Figure 66 – Location of 2010 Rehabilitation and Reference Monitoring Sites

5.4 Rehabilitation Trials and Research MCC has participated in a number of ACARP trials into the sealing and rehabilitation of material which is liable to spontaneous combustion. These reports include the following:

. Development of Rehabilitation Completion Criteria for Native Ecosystem Establishment on Coal Mines in the Hunter Valley (C13048) . Rehabilitation of Spontaneous Combustion – Prone Spoil Piles (C9031) . Infra-red Thermography for Monitoring Spoil Piles (C9062)

5.5 Further Development of the Final Rehabilitation Plan Once final mine closure has been completed the creation of a multi-layered vegetation community will provide wildlife habitat and protected corridors for fauna movement between the mine site and adjacent remnant vegetation areas. This will encourage the re-population

Annual Environmental Management Report Page 92 July 2011 – June 2012 Muswellbrook Coal Company Limited

of the area by a range of native fauna. On final completion it is anticipated that tree corridors will run from Bells Mountain into the eastern emplacement area and across the mine site to Skelletar Ridge.

Habitat reinstatement areas across the mine site are at various stages of development. The majority of tree areas on the mine site are healthy and in some areas quite vigorous growth has occurred (refer to Figure 67).

There was no further refinement of the final landform in this AEMR period.

Figure 67 – Typical Tree Plot Displaying Vigorous Growth

Annual Environmental Management Report Page 93 July 2011 – June 2012 Muswellbrook Coal Company Limited

6 ACTIVITIES PROPOSED IN THE NEXT AEMR PERIOD

During the next reporting period, the following activities are planned;

 Rehabilitation of the No.1 Open Cut Extension will continue in the in-pit emplacement area;  Overburden from the No.1 Open Cut will be used to reduce spontaneous combustion areas and allow rehabilitation to continue in the No.2 Open Cut.  Spontaneous Combustion will continue to be reviewed every 3 months with reports provided to DRE and OEH.  MCC will continue, where possible, to use organic soil treatments rehabilitation for both the No.1 and No.2 Open Cuts.  Rehabilitation monitoring will continue to establish current indicators of sustainability and allow future tracking of performance. Detailed rehabilitation and completion criteria assessment will be a continual process at MCC and remedial action will be undertaken as required.  Evaluate recommendations made in the Pollution Reduction Programme, review and implement advice from EPA.

Annual Environmental Management Report Page 94 July 2011 – June 2012 Muswellbrook Coal Company Limited

APPENDIX 1

AEMR Plan

Annual Environmental Management Report July 2011 – June 2012

Muswellbrook Coal Company Limited .

APPENDIX 2

Dust Monitoring Results

Annual Environmental Management Report July 2011 – June 2012 Muswellbrook Coal Company Limited

DEPOSITIONAL DUST RESULTS – JULY 2011 to JUNE 2012

DATE DM2 DM7 DM10 DM14 DM15 DM16 DM17 DM18 DM19 DM20 DM22 DM23 DM24 DM26 DM28 DM29 DM30 Jul-11 3.7 0.4 1.4 1.9 0.9 0.4 0.6 NR c9.3 0.7 0.5 1.9 0.7 1.6 0.4 0.4 0.3 Aug-11 1.4 1.1 8.1 0.9 0.7 0.9 1.4 1 c9.4 0.7 1.6 c5.5 c10.4 1.6 0.8 1.1 0.8 Sep-11 0.9 0.6 4 0.7 1 0.9 1.1 0.7 c22.8 0.6 2.2 0.9 1.2 4.3 c7.9 3.8 0.6 Oct-11 0.9 1.5 4.5 1.1 1.3 0.9 2 1.1 10 3.6 1.5 1.1 1.8 c11.5 2 1.5 1.2 Nov-11 0.6 1.3 3.5 0.6 NR 1.9 2.5 1.9 c31.2 4 2.4 NR 3.2 c6.9 0.9 1.1 1.1 Dec-11 1.4 0.9 1.2 1 2.9 c4.9 1.3 1.1 c26.1 2 2.5 c4.4 c26.7 2.5 1.3 c5.2 0.8 Jan-12 1.5 1.2 2.8 0.9 3.8 3.1 1.4 1.4 1.9 4.6 1.7 1 2.1 2.2 c6.6 c8.7 1.1 Feb-12 0.8 0.7 1.3 0.5 0.4 1.1 2 1.1 5.4 1.1 2.6 0.6 2.1 1 0.6 1.1 1.8 Mar-12 0.9 0.9 2.2 0.9 1 1.1 1.2 0.8 0.5 1.2 1.2 0.8 1.2 NR 3.8 0.8 1.2 Apr-12 1.1 2 2.6 1.6 3.1 1.4 2.3 3.7 1.1 1.7 1.9 1.4 2.6 c4.8 c5.1 3.5 3.7 May-12 1.4 1.3 c6.4 0.6 c4.8 0.6 2.1 0.9 3.8 2 3.6 1 1.5 4 0.9 1.1 0.5 Jun-12 1.2 1.1 c6.7 1.3 0.6 2.8 2.4 1.4 c10.6 c4.3 1.8 NR 2.6 1.5 0.9 1.1 1.1 ANNUAL Average 1.3 1.1 3.2 1.0 1.6 1.4 1.7 1.4 3.8 2.0 2.0 1.1 1.9 2.3 1.3 1.6 1.2 (July 2011 - Jun 2012)

HISTORICAL Average 2.1 1.1 2.9 1.2 2.5 2.0 1.8 1.1 2.3 1.9 1.7 1.4 2.0 1.8 1.9 1.6 1.4 (since 1987) c = Contaminated result due to the presence of bird droppings, insects, or vegetation in sample. Contaminated results excluded from averages. NR = No result. Includes broken or missing bottles.

Annual Environmental Management Report July 2011 – June 2012 Muswellbrook Coal Company Limited

3 PM10 TEOM MONITORING RESULTS – 1 JULY 2011 to JUNE 2012 (μg/m )

July 2011 August 2011 September 2011 October 2011 SITE 1 SITE 2 SITE 3 SITE 1 SITE 2 SITE 3 SITE 1 SITE 2 SITE 3 SITE 1 SITE 2 SITE 3 SAMPLE 24-hr 24-hr 24-hr SAMPLE 24-hr 24-hr 24-hr SAMPLE 24-hr 24-hr 24-hr SAMPLE 24-hr 24-hr 24-hr DATE Average Average Average DATE Average Average Average DATE Average Average Average DATE Average Average Average (μ g/m 3 ) (μ g/m 3 ) (μg/m 3 ) (μ g/m 3 ) (μ g/m 3 ) (μg/m 3 ) (μ g/m 3 ) (μ g/m 3 ) (μg/m 3 ) (μ g/m 3 ) (μ g/m 3 ) (μg/m 3 ) 01-Jul-11 11.4 14.9 15.7 01-Aug-11 12.4 11.8 12.5 01-Sep-11 19.2 19.1 19.7 01-Oct-11 5.6 5.2 5.3 02-Jul-11 7.4 7.6 9.3 02-Aug-11 13.5 13.6 14.1 02-Sep-11 13.8 13.1 14.7 02-Oct-11 8.4 6.8 8.0 03-Jul-11 6.1 7.9 7.5 03-Aug-11 16.2 15.5 17.7 03-Sep-11 14.4 11.0 10.1 03-Oct-11 9.7 9.4 10.2 04-Jul-11 8.4 11.4 9.9 04-Aug-11 16.9 17.5 18.5 04-Sep-11 10.1 9.3 9.4 04-Oct-11 10.3 10.1 12.7 05-Jul-11 10.4 11.8 9.9 05-Aug-11 17.8 18.8 18.8 05-Sep-11 13.4 14.7 13.7 05-Oct-11 12.1 11.7 13.0 06-Jul-11 8.3 12.0 13.3 06-Aug-11 14.7 15.0 13.9 06-Sep-11 10.7 12.8 10.4 06-Oct-11 14.5 13.7 14.6 07-Jul-11 6.1 10.0 9.0 07-Aug-11 9.9 9.6 9.2 07-Sep-11 17.9 17.9 18.7 07-Oct-11 20.4 19.6 18.6 08-Jul-11 6.3 8.7 8.3 08-Aug-11 6.1 5.7 6.1 08-Sep-11 18.3 17.5 18.0 08-Oct-11 15.2 14.7 14.5 09-Jul-11 5.0 7.1 5.9 09-Aug-11 4.6 4.8 4.7 09-Sep-11 5.3 5.5 5.0 09-Oct-11 11.2 17.3 10.5 10-Jul-11 5.1 7.6 5.6 10-Aug-11 5.1 5.2 4.8 10-Sep-11 8.3 8.4 7.4 10-Oct-11 7.9 8.3 7.4 11-Jul-11 6.9 9.9 8.9 11-Aug-11 7.2 6.3 6.3 11-Sep-11 8.1 8.5 7.4 11-Oct-11 8.7 9.9 8.6 12-Jul-11 7.8 10.0 9.3 12-Aug-11 12.3 11.3 13.4 12-Sep-11 13.0 12.6 12.7 12-Oct-11 15.6 15.0 15.9 13-Jul-11 13.7 13.9 13.0 13-Aug-11 11.4 11.0 9.8 13-Sep-11 6.2 7.4 12.0 13-Oct-11 15.1 13.9 20.9 14-Jul-11 14.9 17.8 18.5 14-Aug-11 11.7 10.5 10.8 14-Sep-11 8.5 10.2 9.3 14-Oct-11 18.8 16.8 20.6 15-Jul-11 15.2 15.7 17.9 15-Aug-11 9.9 9.8 14.2 15-Sep-11 12.4 13.5 12.6 15-Oct-11 11.0 11.2 11.6 16-Jul-11 9.9 10.3 10.2 16-Aug-11 15.0 13.0 15.3 16-Sep-11 11.2 11.8 11.4 16-Oct-11 16.2 16.5 14.8 17-Jul-11 16.9 14.8 15.3 17-Aug-11 11.2 10.9 13.5 17-Sep-11 14.1 12.7 12.5 17-Oct-11 23.9 24.0 29.6 18-Jul-11 7.9 7.9 7.7 18-Aug-11 7.0 7.5 6.8 18-Sep-11 21.1 21.9 19.7 18-Oct-11 23.1 19.6 24.4 19-Jul-11 6.3 7.4 6.0 19-Aug-11 5.9 6.1 5.6 19-Sep-11 30.8 27.4 27.2 19-Oct-11 18.0 16.5 20.5 20-Jul-11 10.8 10.1 8.8 20-Aug-11 10.3 10.0 9.7 20-Sep-11 39.0 39.3 34.5 20-Oct-11 19.2 17.9 18.2 21-Jul-11 9.9 8.6 8.0 21-Aug-11 8.9 8.4 8.9 21-Sep-11 10.6 12.8 11.0 21-Oct-11 15.5 17.0 16.6 22-Jul-11 8.0 7.4 7.1 22-Aug-11 9.7 9.4 9.0 22-Sep-11 20.4 17.9 17.5 22-Oct-11 27.4 24.1 24.2 23-Jul-11 11.7 9.7 10.1 23-Aug-11 7.5 7.3 8.3 23-Sep-11 25.3 24.2 24.5 23-Oct-11 19.8 19.7 19.7 24-Jul-11 6.6 6.2 6.0 24-Aug-11 11.0 9.8 10.6 24-Sep-11 33.4 32.3 32.0 24-Oct-11 22.3 23.4 21.2 25-Jul-11 7.0 7.4 7.0 25-Aug-11 9.2 8.4 8.1 25-Sep-11 3.6 3.9 3.7 25-Oct-11 19.1 18.3 19.0 26-Jul-11 6.7 6.4 5.9 26-Aug-11 13.2 13.4 22.7 26-Sep-11 6.0 6.3 6.8 26-Oct-11 11.1 11.4 11.3 27-Jul-11 12.7 12.0 12.2 27-Aug-11 21.8 18.4 18.0 27-Sep-11 13.1 21.1 14.6 27-Oct-11 8.5 9.6 9.5 28-Jul-11 10.4 10.8 11.0 28-Aug-11 16.7 16.8 15.9 28-Sep-11 18.7 17.7 20.2 28-Oct-11 15.7 15.4 17.1 29-Jul-11 10.1 10.9 11.0 29-Aug-11 17.0 14.7 16.1 29-Sep-11 4.3 5.3 4.4 29-Oct-11 13.0 13.3 12.7 30-Jul-11 9.8 10.0 10.5 30-Aug-11 21.7 19.4 20.8 30-Sep-11 5.7 6.7 5.9 30-Oct-11 9.5 9.8 9.4 31-Jul-11 12.4 10.5 10.6 31-Aug-11 16.5 14.9 15.1 31-Oct-11 11.6 12.2 12.5

Annual Environmental Management Report July 2011 – June 2012 Muswellbrook Coal Company Limited

November 2011 December 2011 January 2012 February 2012 SITE 1 SITE 2 SITE 3 SITE 1 SITE 2 SITE 3 SITE 1 SITE 2 SITE 3 SITE 1 SITE 2 SITE 3 SAMPLE 24-hr 24-hr 24-hr SAMPLE 24-hr 24-hr 24-hr SAMPLE 24-hr 24-hr 24-hr SAMPLE 24-hr 24-hr 24-hr DATE Average Average Average DATE Average Average Average DATE Average Average Average DATE Average Average Average (μ g/m 3 ) (μ g/m 3 ) (μg/m 3 ) (μ g/m 3 ) (μ g/m 3 ) (μg/m 3 ) (μ g/m 3 ) (μ g/m 3 ) (μg/m 3 ) (μ g/m 3 ) (μ g/m 3 ) (μg/m 3 ) 01-Nov-11 15.5 15.7 18.2 01-Dec-11 10.4 12.7 13.5 01-Jan-12 14.2 10.9 11.5 01-Feb-12 6.2 6.8 7.1 02-Nov-11 15.1 16.8 16.9 02-Dec-11 15.3 15.4 16.3 02-Jan-12 14.9 15.7 16.5 02-Feb-12 4.6 5.0 5.1 03-Nov-11 23.3 21.8 23.1 03-Dec-11 16.6 14.7 15.0 03-Jan-12 12.2 14.9 20.5 03-Feb-12 7.7 7.7 8.0 04-Nov-11 21.8 18.9 18.8 04-Dec-11 14.8 15.9 15.1 04-Jan-12 24.9 28.4 27.0 04-Feb-12 26.7 18.3 18.8 05-Nov-11 17.0 15.9 16.3 05-Dec-11 13.9 16.4 17.9 05-Jan-12 19.4 20.4 21.8 05-Feb-12 19.2 18.5 19.9 06-Nov-11 16.4 19.3 16.9 06-Dec-11 9.1 11.1 12.2 06-Jan-12 9.0 10.0 10.8 06-Feb-12 22.8 24.4 23.8 07-Nov-11 19.3 17.7 24.1 07-Dec-11 9.9 10.8 11.0 07-Jan-12 18.1 18.7 19.0 07-Feb-12 11.0 10.6 11.1 08-Nov-11 24.9 25.2 25.1 08-Dec-11 7.9 8.4 8.3 08-Jan-12 27.2 23.7 23.0 08-Feb-12 16.9 17.0 18.0 09-Nov-11 23.5 23.9 24.2 09-Dec-11 9.5 10.0 12.3 09-Jan-12 0.0 11.1 10.8 09-Feb-12 16.8 16.4 19.4 10-Nov-11 23.3 23.8 24.0 10-Dec-11 10.8 10.6 12.1 10-Jan-12 8.5 10.8 11.1 10-Feb-12 18.9 19.1 23.4 11-Nov-11 16.6 17.2 17.9 11-Dec-11 8.4 8.8 9.0 11-Jan-12 16.5 19.3 17.6 11-Feb-12 11.5 12.2 13.5 12-Nov-11 26.4 26.3 25.4 12-Dec-11 7.6 8.0 8.3 12-Jan-12 25.6 20.1 21.2 12-Feb-12 15.1 12.7 13.2 13-Nov-11 22.4 21.7 22.0 13-Dec-11 12.5 13.6 15.1 13-Jan-12 25.7 18.7 18.3 13-Feb-12 17.0 18.2 19.6 14-Nov-11 21.0 22.7 22.8 14-Dec-11 15.4 15.1 16.7 14-Jan-12 26.6 20.8 21.1 14-Feb-12 13.1 12.1 15.3 15-Nov-11 28.8 29.2 29.5 15-Dec-11 16.6 15.4 16.7 15-Jan-12 13.1 8.2 7.8 15-Feb-12 12.7 11.3 13.1 16-Nov-11 22.1 24.4 25.7 16-Dec-11 13.6 11.6 12.8 16-Jan-12 12.7 12.6 9.9 16-Feb-12 18.0 17.7 22.9 17-Nov-11 6.2 7.1 7.3 17-Dec-11 13.1 11.1 11.7 17-Jan-12 16.4 14.1 22.8 17-Feb-12 19.5 18.3 21.5 18-Nov-11 18.4 19.2 19.9 18-Dec-11 16.7 17.0 17.5 18-Jan-12 14.0 9.8 10.6 18-Feb-12 24.8 24.5 25.5 19-Nov-11 15.4 18.5 16.5 19-Dec-11 15.4 16.1 15.0 19-Jan-12 17.2 13.3 15.9 19-Feb-12 24.7 24.4 24.5 20-Nov-11 23.6 25.1 24.2 20-Dec-11 14.2 14.2 14.9 20-Jan-12 23.2 17.2 18.2 20-Feb-12 9.7 10.5 10.1 21-Nov-11 14.0 14.4 16.8 21-Dec-11 13.9 12.3 13.4 21-Jan-12 22.8 16.8 15.2 21-Feb-12 9.7 10.9 10.7 22-Nov-11 12.8 15.1 13.7 22-Dec-11 31.3 11.4 11.0 22-Jan-12 17.8 12.4 11.6 22-Feb-12 17.1 16.8 17.9 23-Nov-11 5.2 5.7 5.6 23-Dec-11 10.2 10.1 9.9 23-Jan-12 12.7 9.0 8.8 23-Feb-12 15.2 14.3 15.7 24-Nov-11 5.6 5.9 5.6 24-Dec-11 9.2 6.8 6.9 24-Jan-12 17.0 12.5 12.9 24-Feb-12 14.2 13.6 16.8 25-Nov-11 3.3 3.8 3.7 25-Dec-11 7.9 7.8 8.1 25-Jan-12 7.1 4.2 4.1 25-Feb-12 15.8 14.4 16.1 26-Nov-11 2.8 5.0 3.3 26-Dec-11 7.8 9.3 9.3 26-Jan-12 7.1 4.2 3.7 26-Feb-12 14.8 14.3 16.9 27-Nov-11 13.3 13.3 14.1 27-Dec-11 12.3 13.7 12.6 27-Jan-12 10.7 7.8 9.8 27-Feb-12 16.6 14.8 15.3 28-Nov-11 15.6 15.3 17.0 28-Dec-11 17.5 18.6 19.6 28-Jan-12 10.5 6.3 5.9 28-Feb-12 15.2 18.5 15.9 29-Nov-11 16.9 18.4 18.9 29-Dec-11 12.7 12.1 12.7 29-Jan-12 12.4 9.6 10.1 29-Feb-12 19.3 20.2 19.2 30-Nov-11 11.9 13.8 12.1 30-Dec-11 15.6 13.7 14.6 30-Jan-12 11.3 9.8 8.9 31-Dec-11 11.3 11.5 10.8 31-Jan-12 6.0 6.4 7.8

Annual Environmental Management Report July 2011 – June 2012 Muswellbrook Coal Company Limited

March 2012 April 2012 May 2012 June 2012 SITE 1 SITE 2 SITE 3 SITE 1 SITE 2 SITE 3 SITE 1 SITE 2 SITE 3 SITE 1 SITE 2 SITE 3 SAMPLE 24-hr 24-hr 24-hr SAMPLE 24-hr 24-hr 24-hr SAMPLE 24-hr 24-hr 24-hr SAMPLE 24-hr 24-hr 24-hr DATE Average Average Average DATE Average Average Average DATE Average Average Average DATE Average Average Average (μ g/m 3 ) (μ g/m 3 ) (μg/m 3 ) (μ g/m 3 ) (μ g/m 3 ) (μg/m 3 ) (μ g/m 3 ) (μ g/m 3 ) (μg/m 3 ) (μ g/m 3 ) (μ g/m 3 ) (μg/m 3 ) 01-Mar-12 14.8 20.1 19.1 01-Apr-12 16.5 15.5 19.4 01-May-12 14.8 12.1 12.3 01-Jun-12 11.8 12.1 13.3 02-Mar-12 4.0 4.1 4.2 02-Apr-12 24.1 21.1 24.5 02-May-12 11.8 10.0 11.3 02-Jun-12 10.1 10.0 10.1 03-Mar-12 6.6 7.2 7.2 03-Apr-12 24.1 22.0 21.8 03-May-12 8.7 8.9 8.7 03-Jun-12 7.2 7.4 6.8 04-Mar-12 13.0 13.3 13.1 04-Apr-12 25.2 24.2 23.6 04-May-12 9.5 8.9 9.3 04-Jun-12 4.9 6.2 5.4 05-Mar-12 6.9 10.7 11.5 05-Apr-12 24.8 24.4 26.6 05-May-12 10.9 10.3 10.6 05-Jun-12 6.9 9.1 8.5 06-Mar-12 17.8 17.6 19.9 06-Apr-12 16.5 15.8 16.8 06-May-12 8.5 9.3 8.5 06-Jun-12 12.3 11.5 11.1 07-Mar-12 12.0 12.1 13.2 07-Apr-12 28.3 25.9 27.0 07-May-12 13.5 14.7 13.4 07-Jun-12 10.8 9.3 10.4 08-Mar-12 6.8 8.9 9.4 08-Apr-12 30.3 29.0 28.7 08-May-12 11.1 11.5 12.6 08-Jun-12 9.0 10.0 10.1 09-Mar-12 9.9 12.1 13.2 09-Apr-12 13.5 13.1 12.8 09-May-12 10.4 13.3 11.5 09-Jun-12 10.7 9.6 9.6 10-Mar-12 18.8 19.6 15.1 10-Apr-12 17.4 14.2 20.7 10-May-12 12.8 17.4 14.0 10-Jun-12 11.2 11.5 11.1 11-Mar-12 24.7 21.8 22.5 11-Apr-12 19.6 17.0 15.4 11-May-12 16.0 17.4 15.0 11-Jun-12 12.3 11.9 11.8 12-Mar-12 17.4 16.5 18.7 12-Apr-12 13.1 13.0 14.8 12-May-12 15.5 14.7 13.9 12-Jun-12 10.8 10.1 10.6 13-Mar-12 22.1 18.6 22.7 13-Apr-12 13.1 11.0 13.1 13-May-12 13.7 17.6 13.1 13-Jun-12 11.5 10.1 10.7 14-Mar-12 19.0 16.7 20.9 14-Apr-12 15.0 14.4 14.3 14-May-12 16.4 21.1 19.0 14-Jun-12 8.6 8.3 10.9 15-Mar-12 18.4 17.9 25.0 15-Apr-12 19.1 17.9 18.5 15-May-12 18.6 20.5 19.1 15-Jun-12 8.6 10.8 10.4 16-Mar-12 10.9 14.3 17.1 16-Apr-12 13.2 13.1 13.2 16-May-12 20.0 16.8 32.2 16-Jun-12 12.1 16.4 13.2 17-Mar-12 10.4 10.5 10.1 17-Apr-12 16.0 15.3 15.4 17-May-12 15.3 16.0 15.6 17-Jun-12 6.5 8.6 6.3 18-Mar-12 14.9 14.7 15.0 18-Apr-12 6.5 6.6 6.6 18-May-12 18.0 16.4 16.1 18-Jun-12 6.7 12.5 9.7 19-Mar-12 9.7 9.4 9.6 19-Apr-12 11.8 11.5 12.5 19-May-12 14.3 16.4 15.0 19-Jun-12 5.7 14.8 8.4 20-Mar-12 14.1 13.9 14.3 20-Apr-12 15.5 13.8 15.7 20-May-12 18.5 16.1 16.6 20-Jun-12 8.0 18.3 9.5 21-Mar-12 14.4 11.6 10.6 21-Apr-12 13.5 12.6 13.1 21-May-12 14.6 17.8 17.0 21-Jun-12 9.8 45.1 12.2 22-Mar-12 17.7 17.3 18.3 22-Apr-12 17.1 12.7 13.2 22-May-12 14.2 22.3 16.4 22-Jun-12 13.0 23.4 13.3 23-Mar-12 18.6 20.1 21.7 23-Apr-12 14.3 12.5 12.9 23-May-12 17.4 19.5 17.7 23-Jun-12 4.9 7.5 5.8 24-Mar-12 12.4 10.7 12.6 24-Apr-12 11.1 11.6 10.7 24-May-12 19.7 19.1 20.2 24-Jun-12 6.1 13.4 8.3 25-Mar-12 16.6 13.5 14.8 25-Apr-12 9.4 9.6 9.0 25-May-12 7.7 8.6 7.8 25-Jun-12 7.2 11.3 9.6 26-Mar-12 20.7 18.8 21.2 26-Apr-12 9.9 10.2 8.8 26-May-12 9.5 14.2 9.3 26-Jun-12 11.9 12.5 12.6 27-Mar-12 17.3 13.3 16.9 27-Apr-12 14.0 14.3 14.8 27-May-12 8.9 9.5 9.5 27-Jun-12 16.3 15.2 16.0 28-Mar-12 22.5 20.0 28.2 28-Apr-12 19.3 15.1 15.0 28-May-12 16.0 17.8 16.7 28-Jun-12 15.5 14.5 15.0 29-Mar-12 22.7 21.1 24.0 29-Apr-12 17.3 16.1 16.4 29-May-12 14.9 13.8 14.1 29-Jun-12 7.3 9.1 9.5 30-Mar-12 23.6 19.7 19.4 30-Apr-12 19.4 15.0 18.0 30-May-12 12.3 11.4 10.7 30-Jun-12 7.0 11.9 7.7 31-Mar-12 18.1 14.8 14.5 31-May-12 14.6 12.6 19.4

Annual Environmental Management Report July 2011 – June 2012 Muswellbrook Coal Company Limited TSP HVAS MONITORING RESULTS – 1 JULY 2011 to JUNE 2012

SITE 3 SITE 3 SAMPLE SITE 1 SITE 2 SAMPLE SITE 1 SITE 2 TSP TSP TSP TSP TSP TSP DATE DATE (μ g/m 3 ) (μ g/m 3 ) (μ g/m3 ) (μ g/m 3 ) (μ g/m 3 ) (μ g/m3 ) 1-Jul-11 25.0 16.0 28.0 3-Jan-12 43.0 45.0 67.0 7-Jul-11 7.0 17.0 9.0 9-Jan-12 36.0 37.0 36.0 13-Jul-11 14.0 15.0 13.0 15-Jan-12 24.0 24.0 23.0 19-Jul-11 16.0 15.0 10.0 21-Jan-12 56.0 53.0 51.0 25-Jul-11 8.0 10.0 9.0 27-Jan-12 17.0 17.0 24.0 31-Jul-11 18.0 12.0 13.0 2-Feb-12 8.0 8.0 6.0 6-Aug-11 17.0 21.0 20.0 8-Feb-12 26.0 23.0 23.0 12-Aug-11 26.0 27.0 39.0 14-Feb-12 32.0 27.0 44.0 18-Aug-11 8.0 8.0 8.0 20-Feb-12 19.0 20.0 18.0 24-Aug-11 22.0 19.0 22.0 26-Feb-12 35.0 34.0 42.0 30-Aug-11 46.0 44.0 49.0 3-Mar-12 11.0 11.0 12.0 5-Sep-11 18.0 28.0 22.0 9-Mar-12 23.0 27.0 29.0 11-Sep-11 12.0 12.0 10.0 15-Mar-12 19.0 48.0 73.0 17-Sep-11 21.0 21.0 19.0 21-Mar-12 40.0 29.0 25.0 23-Sep-11 45.0 50.0 49.0 27-Mar-12 40.0 31.0 48.0 29-Sep-11 12.0 20.0 14.0 2-Apr-12 57.0 47.0 52.0 5-Oct-11 18.0 28.0 22.0 8-Apr-12 65.0 56.0 57.0 11-Oct-11 12.0 12.0 10.0 14-Apr-12 43.0 44.0 40.0 17-Oct-11 21.0 21.0 19.0 20-Apr-12 32.0 41.0 35.0 23-Oct-11 45.0 50.0 49.0 26-Apr-12 12.0 17.0 10.0 29-Oct-11 12.0 20.0 14.0 2-May-12 24.0 21.0 20.0 4-Nov-11 59.0 51.0 77.0 8-May-12 15.0 17.0 22.0 10-Nov-11 51.0 55.0 74.0 14-May-12 42.0 60.0 51.0 16-Nov-11 44.0 46.0 65.0 20-May-12 34.0 28.0 30.0 22-Nov-11 4.0 34.0 48.0 26-May-12 14.0 38.0 14.0 28-Nov-11 36.0 32.0 64.0 1-Jun-12 21.0 22.0 23.0 4-Dec-11 37.0 32.0 36.0 7-Jun-12 22.0 22.0 1.0 10-Dec-11 25.0 19.0 25.0 13-Jun-12 24.0 21.0 25.0 16-Dec-11 39.0 25.0 31.0 19-Jun-12 3.0 77.0 14.0 22-Dec-11 133.0 25.0 29.0 25-Jun-12 10.0 37.0 17.0 28-Dec-11 54.0 42.0 46.0 Annual Average 28.7 29.7 30.7

Annual Environmental Management Report July 2011 – June 2012 Muswellbrook Coal Company Limited

APPENDIX 3

Water Monitoring Results

Annual Environmental Management Report July 2011 – June 2012 Muswellbrook Coal Company Limited

MONTHLY SURFACE WATER MONITORING RESULTS - JULY 2011 to JUNE 2012

pH EC (μS/cm) TSS (mg/L) MCC12 MCC12 Final MCC12 Final No.2 Open No.1 Open Washdown Final No.2 Open No.1 Open Washdown No.2 Open No.1 Open Washdown DATE Dam 1/2 Dam 1/2 Dam 1/2 Settling Settling Pond Cut Void Cut Void Dam Settling Cut Void Cut Void Dam Cut Void Cut Void Dam Pond Pond 21-Jun-11 NR NR NR NR NR NR NR NR NR NR 20-Jul-11 7.72 8.0 7.74 7.86 5440 6740 4730 5480 17 13.0 20 26 23-Aug-11 7.54 7.9 7.88 7.72 6.89 5480 3840 4910 5320 1940 16 18.0 18 151 38 26-Sep-11 7.8 8.0 8.02 7.82 4720 6790 4960 4090 16 30.0 31 76 25-Oct-11 7.67 8.1 8.07 7.91 DRY 5360 6830 5190 4420 DRY 8 19.0 9 16 DRY 15-Nov-11 7.72 8.1 8.04 7.89 DRY 5400 12000 5440 5550 DRY 7 15.0 14 46 DRY 19-Dec-11 8.01 8.2 7.85 7.86 DRY 5400 7080 5500 5810 DRY 6 24.0 8 14 DRY Jan-12 no access 21-Feb-12 7.58 8.0 7.44 5430 5320 3550 13 16.0 38 21-Mar-12 7.85 8.0 7.87 7.65 5540 6940 5470 5230 16 19.0 10 289 24-Apr-12 7.7 7.7 7.89 7.35 5360 11300 5240 2840 16 90.0 108 6 23-May-12 7.71 8.0 8.11 7.67 7080 12100 6040 5730 19 15.0 8 13 20-Jun-12 7.68 8.2 5460 7450 14 13.0 Annual Average 7.7 8.0 7.9 7.8 7.3 5515 7854 5103 5200 3337 13 25 26 49 111 NR = not recorded (no access due to wet conditions)

Annual Environmental Management Report July 2011 – June 2012 Muswellbrook Coal Company Limited

QUARTERLY SURFACE WATER MONITORING RESULTS - JULY 2011 to JUNE 2012

DATE MCC7 MCC8 MCC9 MCC23 MCC24 MCC25 MCC26 MCC27 26-Sep-11 8.1 8.1 8.2 8.2 8.0 no access 8.0 8.7 20-Dec-11 7.7 7.8 8.2 8.1 8.0 7.9 8.4 8.2 pH 21-Mar-12 8.0 8.0 8.2 7.4 8.6 7.9 8.3 8.2 21-Jun-12 8.0 8.0 8.0 9.2 8.9 Dry 8.5 8.2 26-Sep-11 943 1220 4990 1340 2710 no access 2680 7720 20-Dec-11 1195 1551 4830 1890 3600 1930 6550 6650 EC S/cm) µ

( 21-Mar-12 1360 1870 4820 4690 2550 1880 6380 7880 21-Jun-12 1520 1950 4690 3120 5040 Dry 6960 8800 26-Sep-11 19 21 53 8 10 no access 15 16 20-Dec-11 11 7 10 6 6 8 12 8 TSS (mg/L) 21-Mar-12 8 8 6 6 5 8 10 80 21-Jun-12 6 5 13 6 14 Dry 14 20

Annual Environmental Management Report July 2011 – June 2012 Muswellbrook Coal Company Limited

ANNUAL COMPREHENSIVE SURFACE WATER QUALITY ANALYSIS – 21 March 2012

MCC12 No.2 Final ANALYTE Dam 1/2 Open Cut MCC7 MCC8 MCC9 MCC23 MCC24 MCC25 MCC26 MCC27 Settling Void Pond pH 7.85 8.03 7.87 7.98 7.95 8.22 7.42 8.62 7.87 8.34 8.22 EC (µS/cm ) 5540 6940 5470 1360 1870 4820 4690 2550 1880 6380 7880 TDS (mg/L) 4980 7160 4560 782 1140 4280 4210 1960 1400 7080 9070 TSS (mg/L) 16 19 10 8 8 6 6 <5 8 10 80 Hardness - total (calculation - mg/L ) <0.50 3940 2640 312 482 2490 2300 1170 602 3550 3910

Alkalinity - Carbonate (mg CaCO 3 /L) <1 <1 <1 <1 <1 <1 <1 26 <1 7 <1

Alkalinity - Bicarbonate (mg CaCO 3 /L) 350 261 298 207 215 270 92 125 153 231 347 Sulfates (mg/L) 2550 4300 2510 92 253 2440 2390 1190 515 4130 4550 Chloride (mg/L) 570 512 541 277 377 348 354 150 215 399 634 Calcium - total (mg/L) 636 406 539 72 104 317 353 118 73 240 371 Magnesium - total (mg/L) 357 712 314 32 54 413 344 212 102 717 724 Sodium - total (mg/L) 417 628 529 176 258 428 458 205 209 578 894 Potassium - total (mg/L) 36 37 30 3 3 28 16 16 5 26 28 Iron- filterable (mg/L) 3060 <0.50 <0.50 <0.05 <0.05 <0.50 <0.50 <0.05 <0.05 <0.05 <0.05 Arsenic (mg/L) 0.001 0.001 0.002 0.003 0.002 0.002 0.002 0.003 0.002 0.002 0.002 Barium (mg/L) 0.028 0.036 0.023 0.04 0.04 0.048 0.032 0.07 0.052 0.03 0.025 Cadmium (mg/L) <0.0001 <0.0001 <0.0001 <0.0001 <0.0001 <0.0001 <0.0001 <0.0001 <0.0001 <0.0001 <0.0001 Chromium (mg/L) <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 Copper (mg/L) 0.004 0.009 0.004 <0.001 <0.001 0.004 0.004 0.004 0.002 0.008 0.008 Lead (mg/L) <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 <0.001 Manganese - filterable (mg/L) 2.34 0.064 0.925 0.106 0.077 0.03 0.015 0.008 0.178 0.011 0.049 Nickel (mg/L) 0.031 0.026 0.05 <0.001 <0.001 0.009 <0.005 0.007 0.001 0.006 <0.005 Selenium (mg/L) <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 <0.01 Zinc (mg/L) 0.013 0.025 0.01 <0.005 <0.005 0.009 0.011 0.008 <0.005 0.017 0.017 Boron (mg/L) 0.34 0.4 0.4 0.1 0.1 0.12 <0.05 0.13 0.05 0.09 0.14 Iron - total (mg/L) <0.50 <0.50 <0.50 0.45 0.27 <0.50 <0.50 <0.05 0.26 0.07 <0.50 Mercury (mg/L) <0.0001 <0.0001 <0.0001 <0.0001 <0.0001 <0.0001 <0.0001 <0.0001 <0.0001 <0.0001 <0.0001 Fluoride - total (mg/L) 0.7 1.2 0.5 0.4 0.4 0.5 0.5 0.6 0.3 0.7 0.8 Nitrogen Ammonia (mg N/L) 3.17 0.22 0.72 <0.01 0.01 0.09 0.01 0.02 0.02 0.05 0.03 Nitrates (mg N/L) 0.27 <0.01 0.15 <0.01 0.03 <0.01 0.05 <0.01 <0.01 <0.01 <0.01 Oil & Grease (mg/L) <5 <5 <5 <5 <5 <5 <5 <5 <5 <5 <5 PAH (mg/L) <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 <1.0 Total Petroleum Hydrocarbons (mg/L) <70 <70 <70 <70 <70 <70 <70 <70 <70 <70 <70

Annual Environmental Management Report July 2011 – June 2012 Muswellbrook Coal Company Limited

MONTHLY GROUND WATER MONITORING RESULTS – JULY 2011 to JUNE 2012

RDH615 RDH522 (depth) /DDH529 (quality) St. Heliers Colliery Workings No.2 Underground Workings RL RL EC DATE DATE pH (Metres,AHD) (Metres,AHD) ( µ S/cm) 01-Jul-11 147.67 20-Jul-11 149.90 05-Jul-11 146.78 23-Aug-11 148.12 20-Jul-11 143.83 12-Sep-11 153.69 11-Aug-11 141.06 26-Sep-11 149.84 7.6 4720 15-Aug-11 140.33 25-Oct-11 148.99 7.7 5340 17-Aug-11 139.63 15-Nov-11 149.93 7.7 5390 12-Sep-11 136.58 20-Dec-11 147.43 26-Sep-11 135.23 04-Jan-12 150.74 October 2011 mined out 07-Feb-12 148.04 AVERAGE 141.39 21-Feb-12 148.04 7.6 5530 20-Apr-12 148.04 23-May-12 148.04 22-Jun-12 148.04 AVERAGE 149.14 7.6 5245

* Pump at DDH529 was down regularly due to maintenance issues.

Annual Environmental Management Report July 2011 – June 2012 Muswellbrook Coal Company Limited

ANNUAL COMPREHENSIVE GROUND WATER QUALITY ANALYSIS – 22 August 2012

ANALYTE DDH529 pH 7.55 EC (µS/cm ) 5880 TDS (mg/L) 4880 TSS (mg/L) 11 Hardness - total (calculation - mg/L ) 2980 Chloride (mg/L) 594 Fluoride - total (mg/L) 0.5 Sulfates (mg/L) 2850

Alkalinity - Carbonate (mg CaCO 3 /L) <1

Alkalinity - Bicarbonate (mg CaCO 3 /L) 370 Calcium - total (mg/L) 623 Magnesium - total (mg/L) 346 Sodium - total (mg/L) 443 Potassium - total (mg/L) 41 Iron- filterable (mg/L) 1.25 Arsenic (mg/L) <0.001 Barium (mg/L) 0.032 Cadmium (mg/L) <0.0001 Chromium (mg/L) <0.001 Copper (mg/L) <0.001 Lead (mg/L) <0.001 Manganese - filterable (mg/L) 2.39 Nickel (mg/L) 0.066 Selenium (mg/L) <0.01 Zinc (mg/L) 0.008 Boron (mg/L) 0.39 Iron - total (mg/L) 1.78 Mercury (mg/L) <0.0001 Nitrogen Ammonia (mg N/L) 3.72 Nitrates (mg N/L) <0.01 Oil & Grease (mg/L) <5 PAH (mg/L) <1.0

Annual Environmental Management Report July 2011 – June 2012 Muswellbrook Coal Company Limited

HISTORICAL GROUND WATER (underground workings) MONITORING RESULTS RDH522/DDH529 DEPTH (RL) DEPTH (RL) DEPTH (RL) WATER QUALITY DATE RL DATE RL 06-Jan-11 148.99 DATE pH EC 30-Jan-02 154.7 09-Jan-08 118.39 09-Feb-11 149.93 01-Jul-02 7.2 6000 07-Feb-02 154.6 20-Feb-08 125.41 08-Mar-11 147.43 09-Dec-05 6.9 3270 19-Feb-02 154.1 12-Mar-08 123.78 11-Apr-11 150.74 10-Jan-06 6.7 3250 03-Apr-02 152.5 15-May-08 121.48 10-May-11 148.04 17-Feb-06 6.9 3300 12-Apr-02 151.7 19-Jun-08 122.00 08-Jun-10 149.86 31-Mar-06 6.9 6400 19-Apr-02 152.2 17-Jul-08 130.65 08-Jul-10 151.42 12-Mar-07 6.6 6740 26-Apr-02 152.7 22-Aug-08 133.28 09-Aug-10 149.64 11-Apr-07 7.2 5110 06-May-02 153.2 11-Sep-08 135.41 12-Oct-10 154.09 15-Aug-07 6.69 4930 10-May-02 153.4 02-Oct-08 134.40 08-Dec-10 150.24 05-Sep-07 7.34 4610 18-May-02 153.7 31-Oct-08 138.36 06-Jan-11 149.29 21-Sep-07 7.14 4950 27-May-02 153.4 11-Nov-08 139.54 09-Feb-11 150.33 16-Oct-07 7.81 4510 31-May-02 153.2 24-Nov-08 142.12 08-Mar-11 147.83 14-Nov-07 7.91 4690 07-Jun-02 153.1 03-Dec-08 141.89 11-Apr-11 151.14 18-Dec-07 7.98 4740 14-Jun-02 153.1 09-Dec-08 141.45 10-May-11 148.44 09-Jan-08 7.97 4790 26-Jun-02 153.0 15-Dec-08 143.77 20-Jul-11 143.77 20-Feb-08 7.99 4770 08-Jul-02 152.5 11-Feb-09 148.73 23-Aug-11 138.83 12-Mar-08 6.7 5710 16-Jul-02 152.4 16-Feb-09 149.67 12-Sep-11 134.97 15-May-08 6.84 5110 23-Jul-02 152.3 24-Feb-09 150.16 26-Sep-11 135.19 11-Sep-08 6.7 4540 20-Dec-02 148.5 04-Mar-09 150.52 25-Oct-11 135.56 06-Jan-09 7.2 4920 16-Feb-04 137.3 12-Mar-09 151.16 15-Nov-11 136.34 16-Feb-09 7.2 4770 26-Jul-04 133.4 28-Mar-09 151.33 20-Dec-11 139.12 12-Mar-09 7.3 4810 13-Aug-04 133.0 15-Apr-09 152.51 04-Jan-12 142.84 15-Apr-09 7.0 5000 21-Jan-05 127.5 29-May-09 152.98 07-Feb-12 144.19 29-May-09 7.1 4810 08-Jul-05 124.1 22-Jul-09 153.44 21-Feb-12 144.58 15-Jun-09 7.2 4960 28-Jul-05 130.6 20-Aug-09 155.83 20-Apr-12 144.69 22-Jul-09 5.9 4350 31-Aug-05 136.1 07-Sep-09 156.85 20-Aug-09 7.0 5080 29-Sep-05 142.7 25-Sep-09 157.99 25-Sep-09 7.2 4820 10-Oct-05 145.3 15-Oct-09 157.77 15-Oct-09 6.4 4590 09-Nov-05 149.4 10-Nov-09 157.18 24-Nov-09 7.0 4930 09-Dec-05 149.2 24-Nov-09 157.33 18-Dec-09 6.3 4610 10-Jan-06 139.5 03-Dec-09 157.74 25-Jan-10 6.9 4990 17-Feb-06 148.7 08-Dec-09 157.84 04-Feb-10 7.1 5950 31-Mar-06 152.2 18-Dec-09 158.14 14-Apr-10 7.5 5300 16-Feb-07 126.92 06-Jan-10 158.15 12-May-10 6.9 4980 26-Feb-07 125.34 25-Jan-10 156.98 08-Jun-10 7.8 4670 12-Mar-07 124.55 04-Feb-10 156.25 08-Jul-10 7.0 3590 24-May-07 89.07 11-Feb-10 156.37 10-Aug-10 7.1 5275 31-May-07 92.84 26-Feb-10 155.82 14-Sep-10 7.1 5420 28-Jun-07 121.07 14-Apr-10 153.62 01-Dec-10 7.5 5270 11-Jul-07 114.95 12-May-10 148.75 06-Jan-11 7.8 4800 27-Jul-07 114.15 08-Jun-10 148.34 09-Feb-11 6.8 5150 15-Aug-07 112.58 08-Jul-10 149.90 08-Mar-11 7.4 5390 05-Sep-07 114.54 09-Aug-10 148.12 11-Apr-11 7.5 5250 21-Sep-07 108.82 12-Oct-10 153.69 10-May-11 7.0 5930 16-Oct-07 108.42 08-Dec-10 149.84 20-Sep-11 7.6 4720 14-Nov-07 106.31 25-Oct-11 7.7 5340 18-Dec-07 115.32 15-Nov-11 7.7 5390 21-Feb-12 7.6 5530

Annual Environmental Management Report July 2011 – June 2012 Muswellbrook Coal Company Limited

RDH472/RDH615 DEPTH (RL) WATER QUALITY DATE RL DATE pH EC 8-Jul-05 146.98 17-Feb-06 6.8 5290 28-Jul-05 146.74 22-Mar-06 6.8 5920 31-Aug-05 146.74 30-Mar-06 6.8 5290 17-Feb-06 147.52 11-Apr-06 7.2 4990 22-Mar-06 149.15 10-May-06 6.9 5040 30-Mar-06 149.05 08-Jun-06 6.7 5200 11-Apr-06 147.8 22-Jun-06 6.7 5200 10-May-06 150.03 12-Jul-06 6.7 5060 08-Jun-06 150.14 10-Aug-06 6.7 5040 22-Jun-06 149.66 14-Sep-06 6.8 4850 12-Jul-06 148.78 13-Oct-06 6.6 5550 10-Aug-06 147.88 09-Nov-06 7.4 5037 14-Sep-06 147.03 11-Dec-06 6.8 5420 13-Oct-06 146.74 15-Oct-09 7.2 4905 09-Nov-06 144.96 17-Nov-09 7.2 4860 11-Dec-06 140.93 21-Dec-09 7.3 4790 24-Nov-08 151.85 06-Jan-10 7.1 4960 18-Jan-09 145.9 11-Feb-10 7.2 4930 15-Jul-09 153.64 14-Apr-10 7.3 5040 17-Aug-09 155.36 12-May-10 7.6 5180 16-Sep-09 158.59 08-Jun-10 7.85 4590 15-Oct-09 158.15 08-Jul-10 7.43 3730 17-Nov-09 157.69 10-Aug-10 7.5 5165 21-Dec-09 158.82 14-Sep-10 7.4 5485 06-Jan-10 159.41 12-Oct-10 7.3 5360 11-Feb-10 156.74 08-Dec-10 7.46 5040 14-Apr-10 153.39 09-Feb-11 7.06 4950 12-May-10 149.11 08-Mar-11 7.25 5260 08-Jun-10 149.61 11-Apr-11 7.78 4780 08-Jul-10 150.13 10-May-11 7.09 5430 23-Sep-10 151.53 MINED OUT 12-Oct-10 151.23 16-Nov-10 153.93 08-Dec-10 150.49 06-Jan-11 152.73 09-Feb-11 150.18 08-Mar-11 152.23 11-Apr-11 152.73 28-Apr-11 149.73 10-May-11 148.13 21-Jun-11 148.50 01-Jul-11 147.67 05-Jul-11 146.78 20-Jul-11 143.83 11-Aug-11 141.06 15-Aug-11 140.33 17-Aug-11 139.63 12-Sep-11 136.58 26-Sep-11 135.23 MINED OUT

Annual Environmental Management Report July 2011 – June 2012 Muswellbrook Coal Company Limited

APPENDIX 4

Blast Monitoring Data

Annual Environmental Management Report July 2011 – June 2012 Muswellbrook Coal Company Limited

No.1 and No.2 OPEN CUT BLAST MONITORING RESULTS – JULY 2011 to JUNE 2012

School (B2) Nisbet (B4) 99 Queen Street (B3) Queen Street (B1) Ground Ground Ground Ground Date Time Type Overpressure Overpressure Overpressure Overpressure Vibration Vibration Vibration Vibration dB(L) dB(L) dB(L) dB(L) mm/s mm/s mm/s mm/s 1-Jul-11 16:02 O 94.6 0.09 98.2 0.496 96.2 0.25 98.2 0.18 5-Jul-11 12:42 O 100.5 0.08 106 0.403 113 0.19 112.7 0.13 6-Jul-11 12:39 O 102.7 0.09 110.3 0.966 102.7 0.25 113.9 0.2 7-Jul-11 12:40 O 97.1 0.05 110.8 0.31 103.4 0.14 107.9 0.1 8-Jul-11 12:39 O 95.7 0.12 100 0.304 94.3 0.16 96.9 0.13 12-Jul-11 12:42 O 95.7 0.03 93.8 0.05 91.8 0.06 97.6 0.05 13-Jul-11 12:40 I 90 0.05 95.1 0.167 95.3 0.09 95.3 0.11 15-Jul-11 12:31 O ther 91.1 0.04 103.3 0.204 90.2 0.06 97.6 0.05 21-Jul-11 12:39 I 90.6 0.06 102 0.105 93.1 0.08 101.3 0.1 28-Jul-11 12:41 I 88.6 0.06 100.3 0.415 93.1 0.06 92.2 0.08 1-Aug-11 12:47 O 97.4 0.09 102.4 0.403 100.8 0.18 102.1 0.15 2-Aug-11 12:44 O 95.7 0.05 102.2 0.31 102.2 0.15 99.9 0.09 5-Aug-11 12:38 I no SMS no SMS 99.4 0.626 91.8 0.08 96.1 0.08 12-Aug-11 12:40 O 90.6 0.08 95.1 0.496 95.3 0.19 94.4 0.22 16-Aug-11 12:36 I 87.9 0.04 96.2 0.062 90.2 0.06 92.2 0.08 25-Aug-11 14:10 I 95 0.17 103.5 0.551 100.3 0.23 99.9 0.19 26-Aug-11 12:44 I 87 0.13 97.2 0.13 91.8 0.08 90.8 0.13 31-Aug-11 14:40 O 90.6 0.05 101.2 0.204 96.2 0.11 94.4 0.09 31-Aug-11 14:45 O 89.3 0.09 99.5 0.415 95.3 0.22 94.4 0.24 2-Sep-11 12:10 O 95.3 0.04 105.7 0.074 99.1 0.09 99.4 0.06 5-Sep-11 13:00 I 83.9 0.03 93.4 0.056 88.3 0.05 90.8 0.06 6-Sep-11 14:15 I 97.9 0.08 101.2 0.142 94.3 0.11 100.4 0.19 9-Sep-11 10:00 O 98.6 0.17 86.1 0.025 100.3 0.27 99.4 0.28 12-Sep-11 14:21 O 90.6 0.12 108.3 0.533 102.2 0.22 96.1 0.2 14-Sep-11 12:45 I 86.1 0.06 105.3 0.186 90.2 0.14 92.2 0.17 19-Sep-11 12:47 O 96.6 0.14 101 0.452 103.4 0.27 102.9 0.23 15-Sep-11 12:39 I 90 0.03 97.4 0.18 94.3 0.05 106.6 0.05 19-Sep-11 12:44 O 106.9 0.04 103.6 0.068 106.6 0.05 106.6 0.06 22-Sep-11 12:43 I 88.6 0.03 96.4 0.142 88.3 0.05 87.3 0.06 27-Sep-11 14:05 I 87.9 0.04 90.8 0.056 94.3 0.05 93.3 0.06 28-Sep-11 12:36 I 91.1 0.04 98.9 0.074 95.3 0.08 95.3 0.08 I = Interburden O = Overburden

Annual Environmental Management Report July 2011 – June 2012 Muswellbrook Coal Company Limited

School (B2) Nisbet (B4) 99 Queen Street (B3) Queen Street (B1) Ground Ground Ground Ground Date Time Type Overpressure Overpressure Overpressure Overpressure Vibration Vibration Vibration Vibration dB(L) dB(L) dB(L) dB(L) mm/s mm/s mm/s mm/s 4-Oct-11 14:07 I 86.1 0.04 106.6 0.229 94.3 0.06 94.4 0.06 12-Oct-11 12:35 O 94.3 0.1 103.7 0.421 99.7 0.39 99.4 0.23 18-Oct-11 12:39 I 96.9 0.04 102.8 0.118 91.8 0.05 102.1 0.06 26-Oct-11 14:45 I 87 0.04 101.8 0.087 91.8 0.05 102.1 0.05 3-Nov-11 12:38 O 94.3 0.12 103.4 0.483 97.8 0.22 98.8 0.23 4-Nov-11 9:46 O ther 99.3 0.04 116.2 0.322 103.4 0.06 104.5 0.06 8-Nov-11 12:57 I 98.4 0.04 98.1 0.149 93.1 0.05 106.6 0.06 9-Nov-11 12:38 O 93.9 0.08 102 0.242 94.3 0.18 96.1 0.15 10-Nov-11 12:42 O 92.6 0.12 105.9 0.223 96.2 0.16 107.3 0.11 11-Nov-11 12:40 I 92.6 0.13 110.1 0.929 93.1 0.32 94.4 0.41 15-Nov-11 12:44 O 90 0.06 101.8 0.223 93.1 0.15 104.2 0.15 21-Nov-11 16:19 I 93.5 0.15 104.6 0.452 100.3 0.32 99.4 0.31 28-Nov-11 16:36 I 89.3 0.05 104 0.273 97 0.14 96.1 0.11 30-Nov-11 12:44 I 93.9 0.06 103.1 0.235 97.8 0.14 99.9 0.1 7-Dec-11 13:02 O 98.4 0.08 98.9 0.334 103.1 0.14 103.9 0.1 6-Dec-11 13:00 I 96 0.04 96.2 0.05 94.3 0.05 98.2 0.06 7-Dec-11 12:57 I 95 0.05 102 0.229 101.3 0.1 100.9 0.09 14-Dec-11 14:43 O 92.1 0.13 105.5 0.341 98.5 0.22 96.1 0.14 16-Dec-11 12:41 O 95 0.15 105.7 0.657 96.2 0.41 97.6 0.28 20-Dec-11 12:51 O 91.1 0.06 103.8 0.359 98.5 0.22 102.5 0.22 21-Dec-11 10:10 I 101.4 0.05 103.5 0.242 99.1 0.1 98.2 0.08 22-Dec-11 12:55 O 85.1 0.17 101.2 0.118 93.1 0.2 94.4 0.11 30-Dec-11 15:56 O 94.6 0.12 106.7 0.545 105.2 0.2 103.2 0.2 5-Jan-12 12:41 O 91.1 0.15 99.7 0.669 94.3 0.27 102.5 0.18 5-Jan-12 10:35 I 86.1 0.04 99.1 0.291 90.2 0.06 100.4 0.08 12-Jan-12 12:54 I 94.3 0.05 102.6 0.235 97.8 0.11 99.4 0.09 13-Jan-12 12:46 O 87.9 0.14 94.6 0.458 94.3 0.28 93.3 0.22 13-Jan-12 1:41 I 90 0.04 104.3 0.229 94.3 0.05 94.4 0.06 10-Jan-12 13:13 O 88.6 0.13 99 0.768 95.3 0.2 96.9 0.23 24-Jan-12 12:42 O 92.1 0.19 97.2 0.613 97.8 0.32 95.3 0.31 23-Jan-12 15:58 O 92.1 0.12 101.6 0.545 99.1 0.33 103.6 0.22 27-Jan-12 14:02 I 81 0.03 107.2 0.316 97.8 0.05 100.9 0.08 31-Jan-12 14:15 O 89.3 0.14 100.5 0.749 93.1 0.32 93.3 0.29 31-Jan-12 14:13 O 87 0.06 92.8 0.378 91.8 0.14 93.3 0.14

Annual Environmental Management Report July 2011 – June 2012 Muswellbrook Coal Company Limited

School (B2) Nisbet (B4) 99 Queen Street (B3) Queen Street (B1) Ground Ground Ground Ground Date Time Type Overpressure Overpressure Overpressure Overpressure Vibration Vibration Vibration Vibration dB(L) dB(L) dB(L) dB(L) mm/s mm/s mm/s mm/s 6-Feb-12 15:04 I 92.1 0.04 93.6 0.099 91.8 0.09 95.3 0.1 10-Feb-12 12:56 O 99.1 0.28 99.4 0.15 93.1 0.08 105.2 0.706 9-Feb-12 12:47 O 92.6 0.1 98.3 0.341 96.2 0.19 96.9 0.23 17-Feb-12 12:41 O 97.4 0.06 101.2 0.334 97 0.2 98.2 0.11 20-Feb-12 14:06 O 104.3 0.1 107.8 0.211 97.8 0.1 96.1 0.13 13-Mar-12 12:49 O 90.6 0.08 94.2 0.539 93.1 0.18 94.4 0.14 30-Mar-12 12:50 I 95 0.1 98.5 0.031 99.1 0.16 98.2 0.23 4-Apr-12 14:25 O 92.5 0.05 98 0.25 102.3 0.11 98.7 0.13 5-Apr-12 12:48 O 90.1 0.04 92.6 0.15 92.4 0.08 93.9 0.07 7-May-12 12:58 O 96.1 0.17 100 1.002 100.8 0.34 100.9 0.28 8-May-12 14:00 I 93.3 0.05 102.4 0.225 101.9 0.12 101.8 0.11 14-May-12 14:34 I 89.3 0.05 102.3 0.244 98.4 0.12 98.1 0.08 17-May-12 12:43 I 91.5 0.08 no SMS no SMS 94.3 0.13 93.9 0.9 18-May-12 12:38 I 90.1 0.16 91.5 0.822 92.4 0.33 92.7 0.42 21-May-12 12:58 I 93.9 0.07 102 0.347 100.8 0.12 99.9 0.13 22-May-12 12:51 I 96.3 0.398 90.1 0.09 93.4 0.23 103.4 0.26 23-May-12 12:56 I 92.2 0.07 100.8 0.23 99.9 0.315 99.3 0.12 30-May-12 12:40 I 88.3 0.07 97.3 0.257 93.4 0.17 98.1 0.16 30-May-12 12:43 O 90.8 0.24 96 0.912 97.8 0.48 99.3 0.37 1-Jun-12 14:29 O 91.5 0.2 102.6 0.668 98.9 0.44 96.6 0.38 8-Jun-12 13:31 I 89.3 0.05 91 0.186 88.3 0.09 92.7 0.12 14-Jun-12 12:27 I 111.5 0.07 92.9 0.103 92.4 0.07 93.9 0.08 15-Jun-12 12:10 I 111.9 0.04 109.4 0.112 98.9 0.08 105.9 0.07 21-Jun-12 12:59 O 111.3 0.17 106.4 0.854 95.2 0.4 113.3 0.24 26-Jun-12 14:13 I 104.5 0.04 97.4 0.071 97.8 0.07 95.8 0.07

Annual Environmental Management Report July 2011 – June 2012 Muswellbrook Coal Company Limited

School (B2) Nisbet (B4) 99 Queen Street (B3) Queen Street (B1) Ground Ground Ground Ground Overpressure Overpressure Overpressure Overpressure Vibration Vibration Vibration Vibration dB(L) dB(L) dB(L) dB(L) mm/s mm/s mm/s mm/s

AVERAGE 93.48 0.09 100.63 0.33 96.44 0.16 98.71 0.16 No Trigger: 0 0 0 0 No Result: 1 1 0 0 Equipment Fault: 0 0 0 0 Blast Events Recorded per Monitor: 89 89 89 89 90 90 90 90 OVERALL Total Number of Blast Events: 90 Blast Data Captured (all monitors): 538 % Data Lost (average): 99.6% 98.9% 98.9% 98.9% 98.9% 100.0% 100.0% 100.0% 100.0% Blast Overpressure >115dB: 1 0 1 0 0 Blast Overpressure >120dB: 0 0 0 0 0 Blast Vibration >5mm/sec: 0 0 0 0 0 Blast Vibration >10mm/s: 0 0 0 0 0 % of Blast Events Over 115 dB: 0.00% 0.00% 0.00% 0.00% 0.00%

Annual Environmental Management Report July 2011 – June 2012 Muswellbrook Coal Company Limited

APPENDIX 5

Complaints Summary

Annual Environmental Management Report July 2011 – June 2012 Muswellbrook Coal Company Limited

SUMMARY OF COMPLAINTS JULY 2011 to JUNE 2012

Date of Time of Complainant Nature of Mode of Complaint Complaint Comme nts Action Taken Incident Complaint ID Complaint

20/07/2011 6:08 AM 8 NOISE Environmental Hotline - EA responded constant humming noise Not required - no activity in pits due to rain. could hear loud banging and clanging 22/07/2011 12:15 AM 8 NOISE Environmental Hotline - OCE responded 2 Dozers in No.1 OC parked up. noises near miss incident at coal road and OTHER - Road Drivers of vehicles identified and statements 26/07/2011 7:00 AM 51 Direct call to MCC Office Muscle Creek Road - MCC employee Safety taken. vehicle involved with community member EO informed complainant noise testing at 1/09/2011 4:32 AM 8 NOISE Environmental Hotline - EO responded truck noise residence would be conducted on the 8th and 13th of September to evaluate impacts. Smoke excessive coming from pit, going Inspected No.1 & No.2 Pits, no odour or smoke 13/09/2011 6:45 AM 1 SMOKE Direct call to MCC Office across town where my kids are going in detected around Queen Street or perimeter of Rodger Street mine property Could smell sulfur and was quite strong at Action taken as per Spontaneous Combustion 26/09/2011 10:02 AM 6 ODOUR Environmental Hotline - OCE responded times. Management Plan Action taken as per Noise Management Plan and 4/11/2011 6:00 AM 49 NOISE Direct call to MCC Office - EA responded Could hear operations in the pit OCE's notified of environmental factors currently affecting noise impacts from mining operations Blast results below the Consent Conditions 4/11/2011 9:55 AM 32 BLAST Direct call to MCC Office - EA responded Wife at home felt the house shake. criteria - discussed with complainant

Action taken as per Noise Management Plan and 4/11/2011 12:05 PM 77 NOISE Direct call to MCC Office - EA responded could hear operational noise all night long OCE's notified of environmental factors currently affecting noise impacts from mining operations. Direct call to MCC Office - message left with 5/01/2012 12:50 PM 1 BLAST shook house Blast results all within Consent & EPL conditions. Acccounts Officer Coal truck dropping coal pieces on New OTHER - road truck 23/03/2012 2:05 PM 83 E-mail to Environmental Officer England Highway south of Muscle Creek Incident Report completed spillage Road. OCE conducted noise evaluations throughout 14/05/2012 11:55 PM 8 NOISE Environmental Hotline - OCE responded Could hear truck noise. surrounding areas. Blast results from all monitors below Consent 18/05/2012 12:45 PM 9 BLAST Direct call to MCC Office - EA responded felt house shake criteria and EPL levels.

Annual Environmental Management Report July 2011 – June 2012