Proposed Ammonium Nitrate Facility Expansion ENVIRONMENTAL ASSESSMENT June 2009

Home , Glenbawn Dam, Lostock Dam, Orica, Stockton Bridge, Tomago aluminium smelter, Tourle Street Bridge

Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island Volume 1 - Main Report

Prepared for Orica Australia Pty Ltd 1 Nicholson Street | Melbourne | Victoria | 3000 www.orica.com.au

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Proposed Ammonium Nitrate Facility Expansion S6065303_FinalEA_1June09.doc

Contents

GLOSSARY OF TERMS...... XI ACRONYMS...... XIV EXECUTIVE SUMMARY ...... 1 1.0 INTRODUCTION...... 1-1 1.1 Background...... 1-1 1.2 The Applicant...... 1-2 1.3 Project Location...... 1-2 1.4 Project Site History ...... 1-4 1.5 Current Operations ...... 1-4 1.6 Need for the Project...... 1-5 1.7 The Environmental Assessment Process...... 1-6 1.8 Major Projects...... 1-6 1.9 Environmental Assessment Scoping Report ...... 1-7 1.10 Environmental Assessment Requirements ...... 1-7 1.11 Preparation of this Environmental Assessment...... 1-7 1.12 Stakeholder Consultation ...... 1-8 1.13 EA Exhibition ...... 1-8 1.14 Purpose of this Report...... 1-8 1.15 Structure of this Environmental Assessment...... 1-8 2.0 CURRENT OPERATIONS...... 2-1 2.1 Overview...... 2-1 2.2 Primary Operational Components ...... 2-2 2.2.1 Ammonia Plant...... 2-2 2.2.2 No. 1 Nitric Acid Plant (NAP1) ...... 2-2 2.2.3 No. 2 Nitric Acid Plant (NAP2) ...... 2-2 2.2.4 No. 3 Nitric Acid Plant (NAP3) ...... 2-2 2.2.5 No. 1 Ammonium Nitrate Plant (ANP1)...... 2-2 2.2.6 No. 2 Ammonium Nitrate Plant (ANP2)...... 2-2 2.3 Outline Process Description ...... 2-2 2.4 Ammonia Production ...... 2-3 2.4.1 Background ...... 2-3 2.4.2 Desulphuriser ...... 2-3 2.4.3 Primary and Secondary Reformers...... 2-3 2.4.4 Shift Conversion...... 2-3 2.4.5 Carbon Dioxide Removal ...... 2-4 2.4.6 Final Purification...... 2-4 2.4.7 Ammonia Synthesis Loop ...... 2-4 2.4.8 Heat Recovery...... 2-4 2.5 Nitric Acid Production ...... 2-4 2.5.1 Feed Preparation...... 2-5 2.5.2 Ammonia Converter ...... 2-5 2.5.3 Absorption Column...... 2-5

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2.5.4 Tail Gas ...... 2-5 2.6 Ammonium Nitrate Production...... 2-6 2.6.1 Neutralisation ...... 2-6 2.6.2 Evaporation ...... 2-6 2.6.3 Prilling and Drying ...... 2-6 2.6.4 Granulating...... 2-6 2.6.5 Screening, Cooling and Recycle...... 2-7 2.7 Ammonium Nitrate Effluent Control...... 2-7 2.8 Material Despatch...... 2-7 2.9 Storage ...... 2-8 2.10 Stormwater Management ...... 2-8 2.11 Operating Hours ...... 2-8 3.0 THE PROJECT...... 3-1 3.1 Project Objective...... 3-1 3.2 Project Need...... 3-1 3.3 Consideration of Alternatives...... 3-2 3.3.1 Importing AN into Newcastle...... 3-2 3.3.2 Expansion of Orica’s AN Plant in Gladstone, Queensland ...... 3-2 3.3.3 Building a new Facility elsewhere in the Hunter Valley...... 3-2 3.3.4 Increasing AN capacity at Kooragang Island ...... 3-2 3.4 Preliminary Site Layout...... 3-3 3.5 Proposed Plant Expansion ...... 3-3 3.5.1 Modification of Existing Ammonia Plant...... 3-4 3.5.2 Additional Nitric Acid Plant (NAP4) ...... 3-4 3.5.3 Additional Ammonium Nitrate Plant (ANP3) ...... 3-4 3.6 Infrastructure...... 3-5 3.6.1 Cooling Towers ...... 3-5 3.6.2 Boiler for Steam Generation...... 3-5 3.6.3 Ammonium Nitrate Effluent Management ...... 3-5 3.6.4 Other Infrastructure Requirements...... 3-5 3.7 Product Storage...... 3-6 3.7.1 Pressurised Ammonia Storage ...... 3-6 3.7.2 Nitric Acid Storage...... 3-6 3.7.3 Solid Ammonium Nitrate Storage...... 3-6 3.7.4 Ammonium Nitrate Solution Storage...... 3-6 3.8 Product Dispatch ...... 3-7 3.8.1 Loading Facilities...... 3-7 3.8.2 Road Transport ...... 3-7 3.8.3 Rail Transport...... 3-7 3.8.4 Cargo Shipping...... 3-7 3.9 Site Access ...... 3-8 3.10 Facility Operational Hours ...... 3-8 3.11 Personnel...... 3-8 3.12 Security...... 3-8

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3.13 Resource Requirements / Interfaces...... 3-8 3.13.1 Natural Gas ...... 3-9 3.13.2 Water...... 3-9 3.13.3 Electricity ...... 3-9 3.13.4 Hazard Management...... 3-9 3.14 Stormwater Management ...... 3-10 3.15 Proposed Construction Activities...... 3-10 3.15.1 Program of Works ...... 3-10 3.15.2 Outline of Construction Methods...... 3-11 3.15.3 Construction Management ...... 3-11 3.15.4 Construction Hours ...... 3-12 3.15.5 Peak Construction Workforce ...... 3-12 3.15.6 Construction Traffic ...... 3-12 3.16 Raw Material Delivery...... 3-12 3.17 Decommissioning ...... 3-12 4.0 STATUTORY PLANNING ...... 4-1 4.1 Introduction...... 4-1 4.2 Environmental Planning & Assessment Act 1979 ...... 4-1 4.2.1 State Planning Matters...... 4-1 4.2.2 Local Planning Matters...... 4-4 4.2.3 Regional Planning Matters ...... 4-9 4.3 Protection of the Environment Operations Act (POEO) 1997 ...... 4-10 4.4 Roads Act 1993 ...... 4-11 4.5 Commonwealth Matters...... 4-11 4.6 Approvals Summary ...... 4-11 5.0 CONSULTATION...... 5-1 5.1 Formal Procedures for Consultation...... 5-1 5.1.1 NSW Formal Procedures ...... 5-1 5.2 Consultation with Stakeholders and Other Relevant Authorities...... 5-3 5.3 Community and Neighbouring Industries Consultation ...... 5-5 5.3.1 Kooragang Island Community Reference Group...... 5-5 5.3.2 Neighbouring Industries ...... 5-6 5.3.3 Community Consultation ...... 5-7 6.0 PRIORITISATION OF ISSUES...... 6-1 6.1 Summary of Issues Identified ...... 6-1 6.2 Prioritisation of Issues ...... 6-1 6.2.1 Approach ...... 6-1 6.2.2 Assessment...... 6-2 7.0 AIR QUALITY ...... 7-1 7.1 Introduction...... 7-1 7.2 Existing Air Quality...... 7-1 7.3 Dispersion Modelling Methodology...... 7-2 7.3.1 Meteorology...... 7-3 7.3.2 Terrain Effects...... 7-3

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7.3.3 Building Wake Effects ...... 7-3 7.3.4 Modelling Scenarios...... 7-3 7.3.5 Source Characteristics ...... 7-4 7.3.6 Emissions Inventory ...... 7-4 7.4 Sensitive Receptors...... 7-6 7.5 Assessment Criteria...... 7-6 7.6 Results...... 7-7 7.7 Impact Assessment ...... 7-7

7.7.1 NOx (as NO2)...... 7-7 7.7.2 TSP ...... 7-8

7.7.3 PM10 ...... 7-8 7.7.4 Ammonia (Odour)...... 7-9 7.8 Environmental Safeguards ...... 7-9 7.8.1 Proposed Operation and Mitigation Measures...... 7-9 7.8.2 Proposed Construction...... 7-10 7.9 Conclusion...... 7-10 8.0 GREENHOUSE GASES...... 8-1 8.1 GHG Emissions ...... 8-1 8.2 Description of Current Plant GHG Emissions...... 8-2 8.3 Description of Proposed Expansion GHG Emissions...... 8-3 8.4 Emission Calculation ...... 8-4 8.4.1 Construction Phase...... 8-4 8.4.2 Operational Phase...... 8-4 8.4.3 Transportation Related GHG Emissions...... 8-5 8.5 Conclusion...... 8-6 9.0 NOISE AND VIBRATION ...... 9-1 9.1 Introduction...... 9-1 9.2 Existing Noise Environment...... 9-1 9.3 Assessment of Existing Noise Environment...... 9-2 9.3.1 Local Meteorological Conditions ...... 9-2 9.3.2 Attended Noise Monitoring...... 9-2 9.3.3 Unattended Noise Monitoring...... 9-2 9.3.4 Measurement Results ...... 9-2 9.4 Review of Noise Assessment Goals...... 9-4 9.4.1 Nearby Residential Land Use Development (Stockton)...... 9-4 9.4.2 Neighbouring Industrial Land Use Development ...... 9-4 9.4.3 Existing Noise Licence Conditions...... 9-4 9.5 Strategies for Noise Control Planning ...... 9-4 9.5.1 Determination of Allowable Industrial Noise Limits...... 9-5 9.5.2 Sleep Disturbance Goals ...... 9-5 9.6 Proposed Expanded Facility Operational Noise...... 9-5 9.7 Operational Noise Modelling Results and Assessment...... 9-5 9.7.1 Meteorological Scenarios...... 9-5 9.7.2 Existing Orica AN Facility Activities...... 9-6

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9.7.3 Proposed Expanded Plant Noise Predictions ...... 9-6 9.7.4 Sleep Disturbance Noise Predictions...... 9-7 9.8 Road Traffic Noise Assessment ...... 9-7 9.9 Construction Noise and Vibration Assessment ...... 9-8 9.9.1 Construction Noise Goals ...... 9-8 9.9.2 Construction Noise Assessment ...... 9-8 9.9.3 Construction Vibration Assessment ...... 9-8 9.10 Environmental Safeguards ...... 9-9 9.10.1 Operation...... 9-9 9.10.2 Construction ...... 9-9 9.11 Conclusion...... 9-10 10.0 HAZARD AND RISK...... 10-1 10.1 Introduction...... 10-1 10.1.1 Risk Assessment in Land Use Planning ...... 10-1 10.1.2 Objectives of the Preliminary Hazard Analysis ...... 10-1 10.2 Preliminary Hazard Analysis Overall Methodology ...... 10-2 10.2.1 Scope ...... 10-2 10.2.2 Detailed Methodology ...... 10-2 10.3 Risk Criteria ...... 10-3 10.3.1 Individual Fatality Risk Criteria...... 10-3 10.3.2 Injury Risk...... 10-4 10.3.3 Risk of Property Damage and Accident Propagation...... 10-4 10.3.4 Societal Risk...... 10-5 10.3.5 Criteria Applied to Developments on Existing Sites...... 10-6 10.4 Hazard Identification...... 10-6 10.4.1 Hazardous Materials ...... 10-6 10.4.2 Potentially Hazardous Incidents...... 10-8 10.4.3 Risk Reduction Measures Adopted by the Project...... 10-8 10.5 Risk Assessment Results ...... 10-9 10.5.1 New Plant and Equipment Risk Performance – Compliance with HIPAP 4 Risk Criteria...... 10-9 10.5.2 Project Risk Performance – Compliance with HIPAP 4 Risk Criteria...... 10-10 10.5.3 Project Risk Performance – Comparison with 1992 Study and Current Operations...... 10-11 10.5.4 Risks to the Biophysical Environment...... 10-11 10.6 Conclusions & Recommendations...... 10-12 11.0 TRAFFIC...... 11-1 11.1 Existing Road Network ...... 11-1 11.1.1 Traffic Volumes ...... 11-1 11.1.2 Intersection Performance ...... 11-3 11.2 Existing Operations...... 11-4 11.2.1 Staff Movements ...... 11-4 11.2.2 Product Delivery and Dispatch...... 11-4 11.3 Potential Impacts ...... 11-4

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11.3.1 Construction ...... 11-4 11.3.2 Operation...... 11-6 11.4 Safeguards ...... 11-9 11.4.1 Construction ...... 11-9 11.4.2 Operation...... 11-9 11.5 Conclusion...... 11-9 12.0 SURFACE WATER QUALITY...... 12-1 12.1 Introduction...... 12-1 12.2 Existing Environment...... 12-1 12.2.1 Stormwater ...... 12-1 12.2.2 Effluent ...... 12-2 12.3 Potential Impacts ...... 12-3 12.3.1 Stormwater ...... 12-3 12.3.2 Effluent ...... 12-4 12.4 Environmental Safeguards ...... 12-4 12.4.1 Stormwater ...... 12-4 12.4.2 Effluent ...... 12-6 12.5 Conclusion...... 12-7 13.0 RESOURCE IMPLICATIONS AND INTERFACES...... 13-1 13.1 Existing Environment...... 13-1 13.1.1 Water Consumption ...... 13-1 13.1.2 Electricity Consumption...... 13-1 13.1.3 Natural Gas Consumption...... 13-1 13.2 Assessment Methodology ...... 13-2 13.3 Potential Resource Impacts...... 13-2 13.3.1 Water...... 13-2 13.3.2 Electricity ...... 13-2 13.3.3 Natural Gas ...... 13-3 13.3.4 Steam ...... 13-3 13.4 Environmental Safeguards ...... 13-4 13.5 Residual Impacts ...... 13-4 13.6 Conclusion...... 13-4 14.0 SOIL AND GROUNDWATER QUALITY...... 14-1 14.1 Background...... 14-1 14.2 Existing Groundwater and Soil Impacts ...... 14-2 14.2.1 Arsenic ...... 14-2 14.2.2 Nutrients ...... 14-2 14.2.3 Acid Sulphate Soils (ASS)...... 14-3 14.3 Remediation Activities ...... 14-3 14.3.1 Arsenic Contamination ...... 14-3 14.3.2 Ammonia Contamination...... 14-4 14.4 Potential Impacts ...... 14-5 14.4.1 Construction ...... 14-5 14.4.2 Operation...... 14-5

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14.4.3 Environmental Safeguards...... 14-5 14.4.4 Construction ...... 14-5 14.4.5 Operation...... 14-6 14.5 Conclusion...... 14-7 15.0 VISUAL ...... 15-1 15.1 Existing Environment...... 15-1 15.2 Assessment Methodology ...... 15-1 15.3 Potential Visual Impacts ...... 15-1 15.3.1 Night Time Visual Impact ...... 15-2 15.4 Potential Viewpoints ...... 15-2 15.4.1 Stockton ...... 15-2 15.4.2 Hunter River ...... 15-3 15.4.3 Newcastle City...... 15-3 15.4.4 Walsh Point Reserve...... 15-3 15.5 Environmental Safeguards ...... 15-3 15.6 Residual Impacts ...... 15-4 15.7 Conclusion...... 15-4 16.0 OTHER ENVIRONMENTAL ISSUES...... 16-1 16.1 Flora and Fauna ...... 16-1 16.1.1 Existing Environment ...... 16-1 16.1.2 Key Threatening Processes ...... 16-4 16.1.3 Potential Impacts...... 16-4 16.1.4 Mitigation Measures ...... 16-4 16.1.5 Residual Impacts...... 16-5 16.1.6 Conclusion...... 16-5 16.2 Heritage ...... 16-5 16.2.1 Existing Environment ...... 16-5 16.2.2 Potential Impacts...... 16-6 16.2.3 Safeguards ...... 16-6 16.2.4 Residual Impacts...... 16-6 16.2.5 Conclusion...... 16-7 16.3 Climate Change...... 16-7 16.3.1 Introduction...... 16-7 16.3.2 Sea Level Rise ...... 16-7 16.3.3 Temperature Increase...... 16-8 16.3.4 Water Availability...... 16-8 16.3.5 Additional Matters...... 16-9 16.4 Waste...... 16-9 16.4.1 Construction Waste...... 16-9 16.4.2 Operational Waste...... 16-9 16.4.3 Waste Management ...... 16-11 17.0 RESIDUAL RISK ANALYSIS...... 17-1 17.1 Approach ...... 17-1 17.2 Analysis ...... 17-2

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17.3 Cumulative Impacts ...... 17-3 18.0 STATEMENT OF COMMITMENTS...... 18-1 18.1 Introduction...... 18-1 18.2 Statement of Commitments ...... 18-1 19.0 PROJECT JUSTIFICATION...... 19-1 19.1 Introduction...... 19-1 19.2 Suitability of Location...... 19-1 19.3 Strategic Justification...... 19-1 19.3.1 Biophysical Considerations ...... 19-1 19.3.2 Economic Considerations ...... 19-3 19.3.3 Social Consideration ...... 19-3 19.3.4 Ecologically Sustainable Development ...... 19-4 19.4 Consequences of Not Proceeding...... 19-6 19.5 Conclusion...... 19-8 20.0 SUMMARY OF FINDINGS ...... 20-1 21.0 REFERENCES...... 21-1

List of Tables

Body Report

Table 2-1: Current Production Quantities (ktpa) ...... 2-1 Table 3-1: Current and future production capacities (ktpa)...... 3-3 Table 3-2: Proposed Schedule of Construction Works ...... 3-10 Table 4-1: Zone Objectives ...... 4-4 Table 4-2: DCP Provisions ...... 4-5 Table 5-1: Director General's Environmental Assessment Requirements...... 5-1 Table 5-2: Stakeholder Consultation...... 5-3 Table 5-3: Summary of Meeting Notes from the Kooragang Island Community Reference Group Meetings ...... 5-6 Table 5-4: Neighbouring Industries ...... 5-6 Table 6-1: Issues Prioritisation Matrix ...... 6-2 Table 6-2: Prioritisation of Environmental Issues...... 6-2 Table 6-3: Prioritisation of Issues ...... 6-4 Table 7-1: Summary Data of Ambient Air Monitoring Station ...... 7-2 Table 7-2: Emission Concentrations and Rates – Scenarios 2 and 3...... 7-5 Table 7-3: Relevant Air Quality Impact Assessment Criteria ...... 7-6 Table 8-1: Direct Process GHG Emissions and Equivalent Emissions due to Electricity Usage...... 8-5 Table 8-2: Total Expanded Plant GHG Assessment Results...... 8-5 Table 9-1: Rating Background Levels (RBL) and Ambient Noise Levels...... 9-2 Table 9-2: Attended Noise Measurement Results ...... 9-3 Table 9-3: Sleep Disturbance Assessment Goals...... 9-5 Table 9-4: Predicted Noise Levels for Existing Site Operating Conditions ...... 9-6 Table 9-5: Predicted Noise Levels for Existing and Proposed Expanded Plant ...... 9-6 Table 9-6: Predicted Intermittent Noise Levels ...... 9-7 Table 9-7: Assessment Objectives for Construction Noise...... 9-8 Table 9-8: Predicted Construction Noise Levels ...... 9-8 Table 10-1: Individual Fatality Risk Criteria (HIPAP 4 (DoP, 1992/2002))...... 10-3 Table 10-2: Fatality Risks to Individuals in NSW (HIPAP 4 (DoP, 1992/2002))...... 10-3 Table 10-3: Injury and Irritation Risk Criteria (HIPAP 4 (DoP, 1992/2002))...... 10-4

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Table 10-4: Property Damage & Accident Propagation Risk Criteria (HIPAP 4 (DoP, 1992/2002)) ....10-5 Table 10-5: Published DoP FN Curve Criteria (draft HIPAP 4 (DoP, 2008)) ...... 10-5 Table 10-6: Hazardous Materials - Orica Ammonium Nitrate Facility, Kooragang Island...... 10-6 Table 11-1: Existing Traffic Volumes...... 11-2 Table 11-2: Summary of traffic movements during operation of the facility...... 11-7 Table 13-1: Primary Areas of Current Potable Water Consumption ...... 13-1 Table 13-2: Allocation of Increased Potable Water Consumption ...... 13-2 Table 13-3: Allocation of Annual Electricity Consumption...... 13-3 Table 15-1: Approximate Dimensions of Proposed Infrastructure of Visual Significance...... 15-2 Table 16-1: Summary of DECC Atlas of NSW Wildlife report for threatened species within 10km of the site ...... 16-3 Table 16-2: Summary of EPBC Act Protected Matters Search Tool Report within 10 km of proposal site ...... 16-3 Table 16-3: AHIMS Registered Sites Search Results within 14 km of the Site ...... 16-5 Table 16-4: Wastes from New Operation...... 16-9 Table 17-1: Residual Risk Matrix ...... 17-2 Table 17-2: Risk Profile ...... 17-2 Table 18-1: Statement of Commitments...... 18-1

List of Figures

Body Report

Figure 1-1: Site Location ...... 1-1 Figure 1-2: Proposed Site Layout...... 1-1 Figure 1-3: Lot and DP Numbers ...... 1-1 Figure 2-1: Current Process Flow Chart...... 2-1 Figure 2-2: Conceptual Flow Chart of Ammonia Production...... 2-1 Figure 2-3: Conceptual Flow Chart of Nitric Acid Production...... 2-1 Figure 2-4: Conceptual Flow Chart of Ammonium Nitrate Production...... 2-1 Figure 3-1: Proposed Process Flow Chart ...... 3-1 Figure 7-1: Scenario 2 and 3 Nitrogen Dioxide 1 Hour Average Ground Level Isopleths (Isolation) .....7-1 Figure 7-2: Scenario 2 and 3 Nitrogen Dioxide 1 Hour Average GLC Isopleths (Cumulative) ...... 7-1 Figure 7-3: Scenario 2 and 3 PM10 24 Hour GLC Isopleths (Isolation)...... 7-1 Figure 7-4: Scenario 2 and 3 PM10 24 Hour Average GLC Isopleths (Cumulative) ...... 7-1 Figure 9-1: Noise Monitoring Locations...... 9-1 Figure 9-2: Predicted Noise Level Locations ...... 9-3 Figure 9-3: Noise Contours - Existing Plant (Calm) ...... 9-1 Figure 9-4: Noise Contours - Uprate Plant (Calm) ...... 9-3 Figure 10-1: Individual Fatality Risk Contours (New Plant and Equipment) ...... 10-1 Figure 10-2: Toxic Injury Risk (New Plant and Equipment) ...... 10-3 Figure 10-3: Toxic Irritation Risk Contours (New Plant and Equipment) ...... 10-5 Figure 10-4: Overpressure Injury Risk Contour (New Plant and Equipment) ...... 10-7 Figure 10-5: Overpressure (Property Damage) Risk - New Plants and Equipment ...... 10-9 Figure 10-6: Individual Fatality Risk Contours (Project Case) ...... 10-11 Figure 10-7: Societal Risk F - N Curve (Project Case) ...... 10-13 Figure 10-8: Individual Fatality Risk Contours (1992 Study)...... 10-15 Figure 10-9: Individual Fatality Risk Contours (Current Operations) ...... 10-17 Figure 10-10: Societal Risk F - N Curve (1992 Study)...... 10-19 Figure 10-11: Societal Risk F - N Curve (Current Operations) ...... 10-21 Figure 11-1: Approved B-Double Routes ...... 11-1 Figure 12-1: Stormwater Plan ...... 12-1 Figure 15-1: Viewpoint Locations ...... 15-5

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Figure 15-2: Proposed Infrastructure (View from Stockton)...... 15-7 Figure 15-3: Proposed Infrastructure (View from Newcastle CBD) ...... 15-9

List of Appendices

Appendix A – Director General’s Requirements Appendix B – Clause 8 Opinion Appendix C – Existing Primary Consents and Licenses Appendix D – Community Consultation Appendix E – Air Quality Impact Assessment Appendix F – Greenhouse Gas Emissions Impact Assessment Appendix G – Noise Impact Assessment Appendix H – Hazard and Risk Assessment Appendix I – Traffic and Transport Assessment Appendix J – Stormwater Management Assessment Appendix K – Threatened Species Lists

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Glossary of Terms

Term Definition

Soils containing pyrite which produces sulphuric acid when exposed to Acid Sulphate Soils (ASS) oxygen

A region of turbulence immediately to the rear of a solid body caused by Aerodynamic wake the flow of air

Geological formation, group of formations, or part of a formulation Aquifer capable of transmitting and yielding significant quantities of water

Archaeological site A place in which material evidence of past activity is preserved

The standard references level used to express the relative elevation of Australian Height Datum standard features. A height given in metres AHD is essentially the height above sea level

Water discharged from cooling towers and boilers to prevent the build- Blowdown up of dissolved salts in the water as a result of evaporation

The encompassment of biological variety at genetic, species and Biodiversity ecosystem scales

Bund A barrier designed to contain materials within a specific area

The management of natural resources in a way that ensures their Conservation continuing availability to both present and future generations

The final stage prior to operation of a plant which prepares the plant for Commissioning operation after it has been constructed or modified and typically involves safety checks, equipment testing and performance testing

Digital Elevation Model A digital representation of ground surface topography

Using, conserving and enhancing resources so that ecological Ecologically Sustainable processes, on which life depends, are maintained and the total quality of Development (ESD) life, now and in the future can be increased

A body of water in which salt water from the open sea mixes with Estuary freshwater draining from the land

Endothermic A reaction that absorbs energy in the form of heat

Exothermic A reaction resulting in the release of heat or energy

Feedstock Raw material required for industrial processes

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Term Definition

Gases such as methane, carbon dioxide, nitrous oxide and CFC’s which Greenhouse Gas contribute to global warming by trapping heat between the earth and the atmosphere

Groundwater Surface water contained within the saturated zone

Open ground area having a prepared and hardened surface and used Hardstand area for storage

Heritage The culture, property, and characteristics of past times

Holocene A geological post-glacial period (approx 10,000 BP)

Isopleth The line or area representing an equal concentration

A tank in a standard of an ISO 20 ft. x 8 ft. x 8ft 6in. frame, designed to ISO container be carried on board container ships

Where cool air falls and moves down-hill in areas of significant Katabatic drainage flow topographic relief

The noise level exceeded 90% of the time on an ‘A’ weighted scale, LA90 commonly referred to as the average minimum, ambient or background noise level

The energy averaged over the measurement time (usually a 15 minute L Aeq interval)

Metalliferous A substance/material containing metal

Mitigation Reducing the severity

A low density porous prilled grade of ammonium nitrate, which consists Nitropril® of solid spherical ammonium nitrate particles 1.5 to 2.5 mm in diameter

N2O Abatement Technology designed to remove/destroy nitrous oxide, a byproduct gas Technology in nitric acid production, to reduce greenhouse gas emissions

A high density non porous grade of ammonium nitrate, which consists of Opal™ solid spherical ammonium nitrate particles 2 to 4 mm in diameter.

Permian A geological period approximately 225 to 300 million years BP

The formation of a rounded, granular solid by allowing molten droplets to Prilling/prill fall through the air

A large tower in which hot liquid ammonium nitrate is sprayed at the top of tower and comes into contact with cool air as it drops down the tower Prill Tower causing the ammonium nitrate to solidify and form solid spherical particles called prills

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Term Definition

Quaternary The geological period from approx 1.8 million years ago to the present

An intergovernmental treaty that provides the framework for national RAMSAR action and international cooperation for conservation of wetlands and their resources

Relief The difference in elevation between high and low points of terrain

The process of removal of a contaminant in a gas stream with a liquid Scrubbing stream through contact of the liquid and gas streams

Any non-hazardous, solid, degradable waste. Includes putrescibles waste, garden waste, uncontaminated biosolids and clinical and related Solid waste waste where sterilised to a standard acceptable to the Department of Health

Animals and plants that are in danger of extinction or may now be Threatened species considered extinct, but have been seen in the wild in the last 50 years

Uprate To improve the industrial output of a process

A measure of the visual quality of a site or area experienced by Visual amenity residents, workers or visitors

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Acronyms

AASS Actual Acid Sulphate Soil

AHD Australian Height Datum

AHIMS Aboriginal Heritage Information Management System

ALARP As Low As Reasonably Practical

AN Ammonium Nitrate

ANS Ammonium Nitrate Solution

ANP Ammonium Nitrate Plant (ANP1, ANP2, ANP3)

ASS Acid Sulphate Soils

BATEA Best Available Technology Economically Achievable

BPIP Building Profile Input Program

CAMBA China-Australia Migratory Bird Agreement

CBD Central Business District

CH4 Methane

CO Carbon Monoxide

CO2 Carbon Dioxide

CO2-e Carbon Dioxide Equivalent

CPAN Chemically Pure Ammonium Nitrate

CSEMP Construction Safety and Environmental Management Plan

DCP 2005 Newcastle Development Control Plan 2005

DECC Department of Environment and Climate Change

DEM Digital Elevation Model

DoP Department of Planning

EA Environmental Assessment

EAR Environmental Assessment Requirement

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EASR Environmental Assessment Scoping Report

ECC Endangered Ecological Communities

EMP Environmental Management Plan

ENCM Environmental Noise Control Manual

ENM Environmental Noise Model

ENSR ENSR Australia Pty Ltd

EPA Environmental Protection Authority

EP&A Act NSW Environmental Planning and Assessment Act 1979

EPL Environment Protection License

EPBC Act Environment Protection and Biodiversity Conservation Act 1999

ESD Ecologically Sustainable Development

GHG Greenhouse Gas

GLC Ground Level Concentration

GWP Global Warning Potential

HAZOP Hazard and Operability (study)

HIPAP No.2 Hazardous Industry Planning Advisory Paper – Fire Safety Study Guidelines

Hazardous Industry Planning Advisory Paper – Risk Criteria for Land Use HIPAP No.4 Safety Planning

HIPAP No.6 Hazardous Industry Planning Advisory Paper – Guidelines for Hazard Analysis

HWC Hunter Water Corporation

IFR Individual Fatality Risk

INP NSW Industrial Noise Policy

IGAE Intergovernmental Agreement on the Environment

IPL Incitec Pivot Ltd

JAMBA Japan-Australia Migratory Bird Agreement

KBF Kooragang Bulk Facilities

KICRG Kooragang Island Community Reference Group

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KTP Key Threatening Process

LEP 2003 Newcastle Local Environment Plan 2003

LGA Local Government Area

LHRS Lower Hunter Regional Strategy

LOS Level of service

MHF Major Hazard Facility

MHU Major Hazards Unit

NA Nitric Acid

NAP Nitric Acid Plant (NAP1, NAP2, NAP3, NAP4)

NCC Newcastle City Council

NES National Environmental Significance

NH3 Ammonia

NIA Noise impact assessment

N2O Nitrous Oxide

NOx Nitrogen Oxides

NO Nitrogen Oxide

NO2 Nitrogen Dioxide

NOHSC National Occupational Health and Safety Commission

NPC Newcastle Port Corporation

Orica Orica Australia Pty Ltd

PASS Potential Acid Sulphate Soils

PHA Preliminary Hazard Analysis

PM10 Particulate matter less than 10µm

POEO Act Protection of the Environment Operations Act 1997

PRP Pollution Reduction Program

QRA Quantitative Risk Assessment

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RBL Rating Background Level

REP Regional Environmental Plan

RTA Roads and Traffic Authority

SEPP State Environmental Planning Policy

SEPP 2005 State Environmental Planning Policy (Major Projects) 2005

SEPP 2007 State Environmental Planning Policy (Infrastructure) 2007

State Environmental Planning Policy 33 – Hazardous and Offensive SEPP 33 Development

SEPP 55 State Environmental Planning Policy 55 – Remediation of Land

SEPP 71 State Environmental Planning Policy 71 – Coastal Protection

SLR Sea level rise

SoC Statement of Commitments

SPA State Property Authority

TAPM The Air Pollution Model

TSC Act Threatened Species Conservation Act

TSP Total Suspended Particulate

TSS Total Suspended Solids

VRA Voluntary Remediation Agreement

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Proposed Ammonium Nitrate Facility Expansion xviii S6065303_FinalEA_1June09.doc

Executive Summary

Introduction

Orica Australia Pty Ltd (Orica) is seeking approval for the expansion of its existing Ammonium Nitrate Production Facility located on Kooragang Island. The proposed expansion of the ammonium nitrate facility would primarily require:

• An additional Nitric Acid Plant (NAP4); • An additional Ammonium Nitrate Plant (ANP3); • Modification of the existing Ammonia Plant; • Additional storages for nitric acid, solid ammonium nitrate and ammonium nitrate solution; and • Upgrading of existing infrastructure such as cooling towers, air compressors, loading facilities, electrical systems, effluent treatment systems and the steam system. Currently, ammonium nitrate (AN) is produced onsite as a precursor for use in the manufacture of commercial explosives for the mining and quarry industries. AN product is produced either in solution form or as one of three solid forms. Minor quantities of ammonia and nitric acid from the facility are also sold.

The Orica Kooragang Island Facility is located on the south-eastern most part of Kooragang Island, located within the Port of Newcastle. The area is industrial. The nearest residential premises to the facility are located at Stockton, approximately 800m east of the facility.

The Project

The proposed expansion includes the following:

• An upgrade to the existing Ammonia Plant to increase its capacity from 295 ktpa to 360 ktpa; • Construction and operation of an additional Nitric Acid Plant (NAP4), which would produce approximately 260 ktpa of nitric acid, increasing the total capacity of the facility from approximately 345 ktpa to 605 ktpa; • Construction and operation of an additional Ammonium Nitrate Plant (ANP3) to produce increased volumes of Ammonium Nitrate Solution (ANS) and the solid prilled product Nitropril®. The proposed expansion and construction of the third Ammonium Nitrate Plant would enable the facility to increase its maximum capacity from 500 ktpa to 750 ktpa. • Construction and operation of additional storages for nitric acid, solid ammonium nitrate and ammonium nitrate solution; and • Some additional infrastructure such as cooling towers, effluent treatment system and boiler. The proposal also includes construction of additional minor storage facilities and improvements to product loading facilities for road. This EA has provided the worst case scenario for traffic by assuming the transportation of product will occur by road. There are current investigations into the resumption of rail for transporting materials. This would use existing rail infrastructure on the site and be equivalent to historical volumes moved by rail previously. The transportation of product by rail would reduce the volume of material transported by road, thereby reducing the number of vehicles on the road.

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Statutory Planning

The site is located within the Newcastle Local Environmental Plan 2003 (LEP 2003) and is within the 4(b) Port and Industry zone. The proposed expansion is defined as ‘industry’ under the provisions of clause 37 of the LEP.

The Minister for Planning has declared the proposal to be a major project under Part 3A of the NSW Environmental Planning and Assessment Act 1979 (EP&A Act) as it meets the criteria of a Major Project under State Environmental Planning Policy (Major Projects) 2005 (SEPP 2005).

The assessment process has identified the relevant local, State and Commonwealth legislative requirements for the proposed expansion of the Ammonium Nitrate Production Facility. An assessment of the relevant matters of consideration was undertaken in this Environmental Assessment (EA) and concluded that the project is compliant with the requirements of LEP 2003 and other relevant State and Commonwealth requirements.

There are two approvals required for the proposed project, being:

• Project approval under section 75J of the EP&A Act; and • Environment Protection Licence (EPL) under the Protection of the Environment (Operations) Act 1997 (POEO). Consultation

The EA has been prepared in accordance with Environmental Assessment Requirements (EARs) issued by the Director General as required by Clause 75F of the EP&A Act. Consultation has been undertaken with stakeholders and other relevant authorities, such as Department of Environment and Climate Change (DECC) and Department of Planning (DoP). The key community group involved in consultation regarding this project is the Kooragang Island Community Reference Group (KICRG). This group contains representatives from various local community groups within the area. Orica has held meetings, a site visit and undertaken extensive consultation with the KICRG throughout the assessment process.

Orica is committed to a comprehensive programme of consultation with stakeholders in relation to the proposed expansion project and additional briefing sessions will be held with key stakeholders during the course of the assessment process.

Prioritisation of Issues

The preliminary environmental assessment undertaken for the project identified and prioritised environmental issues associated with the project. The assessment of environmental issues was based on this prioritisation.

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Air Quality

An Air Quality Impact Assessment was undertaken to assess potential impacts on the surrounding air quality environment, with a particular focus on Stockton, the closest residential community. The facility currently contributes to air quality in the region primarily due to emissions of nitrogen dioxide (NO2). Total Suspended Particulates (TSP), Particulate Matter less than 10μm (PM10) and potentially ammonia. The proposed expansion has the potential to impact air quality due to emissions of the same. The construction of the proposed expansion would potentially result in emissions to air due to products of fuel combustion from vehicles and equipment used in construction and transportation activities. There is also the potential for dust emissions to occur during construction works.

Dispersion modelling was undertaken to determine potential impacts to air quality with an assessment of existing air quality, air quality of the project in isolation from the environment, and air quality of the project when considered cumulatively. The results were then compared to the national standards prescribed in the National Environment Protection Measure for Ambient Air Quality (NEPC, 2003), used as assessment criteria by DECC.

The impact assessment predicted that concentrations of NO2, ammonia and Total Suspended Particulates would be well below the assessment criteria defined by DECC. PM10 predictions suggest the potential for cumulative impacts under worst case scenarios to be close to, but still below, the criteria at some locations in Stockton under the conservative assumptions of the study. However PM10 cumulative impacts from the expanded facility are marginal from emissions from the existing facility; hence are not expected to be distinguishable from existing facility impacts.

The location of the Kooragang Island site (away from residential and other sensitive areas) means that there is little potential for dust and exhaust emissions from construction to give rise to nuisance impacts at adjacent residential areas. A Construction Safety and Environmental Management Plan (CSEMP) will be prepared prior to commencement of construction of the expansion infrastructure to detail measures to be used to control air emissions.

Environmental safeguards during operation of the expanded facility have been proposed to minimise NOx, PM10 and ammonia emissions. These would include catalytic NOx abatement on the new Nitric Acid Plant to minimise NOx emissions; air scrubbing and recirculation technology on the new Prill Tower to minimise particulate emissions; and scrubbing of ammonia emissions during normal operation on the Nitric Acid Plant and AN Plant.

Greenhouse Gases

A Greenhouse Gas Assessment was undertaken to determine the greenhouse gases (GHG) produced as a result of the proposed expansion. The estimation and reporting of greenhouse gas emissions were undertaken in accordance with procedures specified in the National Greenhouse Accounts (NGA) Factors Workbook (DCC, 2008) and included an assessment of the existing facility as well as the expanded facility. GHG emissions associated with direct (combustion & manufacturing emissions), indirect (electricity consumption) and transportation were considered for operation and construction.

The assessment calculated that Orica’s current greenhouse gas emissions from the operation of the Kooragang Island facility are approximately 1.7Mtpa CO2-e. The emissions are dominated by direct emissions associated with the formation of by-product of nitrous oxide (N2O), a potent GHG, in nitric acid production and the combustion of natural gas in ammonia and steam production. Emissions relating to transport are approximately 1% of Orica’s total GHG emissions.

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The expansion project has the potential to increase GHG emissions by as much as 40%, however with Orica’s corporate commitment to maximum practical GHG reduction for its operations; GHG emissions for the facility will be reduced. Through the course of the expansion project it is Orica’s intention to install N2O abatement technology on the proposed new Nitric Acid Plant and also retrofit technology to the existing Nitric Acid Plants. Such technology is expected to reduce N2O emissions from nitric acid production by at least 65%. Combined with a number of other initiatives to improve ammonia and electrical efficiency, GHG emissions will be reduced by approximately 20% to 1.4Mtpa CO2-e.

GHG emissions relating to the construction of the expansion project have been calculated to be 1774 t CO2-e.

Noise and Vibration

A Noise Impact Assessment (NIA) was undertaken by Atkins Acoustics and Associates Pty Ltd. The focus of the NIA was on identified sensitive receivers to the facility, particularly at Stockton. The NIA included monitoring of existing noise sources and modeling of noise emissions associated with operation of the expanded facility.

The main operational noise sources associated with the expanded plant would be associated with compressors, pumps, fans, valves, gas flow through pipe work and venting. The design will incorporate strategies to minimise noise emissions as a result of the new plant and equipment including the use of acoustic enclosures, acoustic buildings and the selection of low noise equipment where possible. The proposed expanded plant also has the potential to increase road traffic volumes on the island road network, however the noise contribution of the additional traffic would be considered insignificant and not give rise to any noticeable change to the existing noise at Stockton.

The assessment of the operational noise levels associated with the expanded facility were predicted to be more than 10dBA lower than the existing plant contribution and would satisfy the relevant noise goals for the site at nearby receivers as defined in the NSW Industrial Noise Policy (INP), (EPA, 2000). The predicted noise levels are therefore not expected to impact upon the nearby residential receivers at Stockton. Additionally, the assessment indicated that the proposed expanded facility would achieve the relevant sleep disturbance criteria.

Construction noise and vibration predictions showed that construction activities would achieve relevant noise and vibration goals for nearby receivers, such as Stockton. The CSEMP would include a noise monitoring program, mitigation options and management practices.

Hazard and Risk

A Preliminary Hazard Assessment was undertaken by GHD on behalf of Orica to assess the risks of new plant and equipment associated with the expansion and the combined existing and proposed operations. The assessment compared the risks associated with the expansion against the criteria contained within Hazardous Industry Planning Advisory Paper No. 4, Risk Criteria for Land Use Safety Planning (HIPAP 4), (DoP, 1992/2002).

The risk associated with the Orica Kooragang Island Facility primarily relate to the production, storage and handling of ammonia and ammonium nitrate. As a consequence of the storage of these chemicals the Orica Facility is a Major Hazard Facility under NSW Legislation.

The assessment found that the risks associated with the proposed new plant and equipment complied with all risk criteria for individual fatality, injury, irritation and societal risk contained within HIPAP 4. It also found that the risks associated with the Project (comprising all site operations after completion of the proposal) satisfied the risk criteria for intensification of hazardous activities on an existing site.

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The Project includes a number of significant improvements to reduce risk both in the existing plant and in the new plant, by reducing both likelihood and consequential impacts from potential hazardous events. The risk reduction measures include reductions in inventory of pressurised liquid ammonia, improved detection and isolation of any potential ammonia leaks and reconfiguration of ammonium nitrate bulk and packaged storages.

The assessment also compared individual fatality risk and societal risk for the existing operations and the Project with the risk contours for the Facility published in 1992 in the NSW Department of Planning, Newcastle and Kooragang Island Area Risk Assessment Study (DoP, 1992). It was found that there has been a significant risk reduction between the 1992 study and existing operations, and there will be further reduction resulting from the implementation of the proposed Project.

Traffic

A Traffic Impact Statement for the proposed expansion was prepared by Mark Waugh Pty Ltd (Better Transport Futures). The Orica site is serviced by an existing road network which is utilised by B- Doubles. Increased traffic volumes associated with operation of the expanded facility would largely relate to increased employee movements and product delivery and dispatch. Traffic volumes would also increase during construction works due to employee movements and delivery of materials.

Due to the relative remoteness of the site and the lack of public transport, it was considered that the majority of the employees would drive to the site resulting in a slight increase in car movements during the peak hour. The assessment found that this would have minimal impact on the adjacent road network.

While the use of rail and cargo ships for product dispatch are being investigated for potential future use, a worst case scenario was considered for the traffic assessment, assuming that all material would be carried on road based vehicles. The number of trucks for the expanded facility is expected to increase from 133 to approximately 196 trucks per day entering and exiting, being a mixture of B-Doubles, truck and dog trailers and semi-trailers. It is anticipated that there would be an additional 6 or 7 trucks per hour during the working week and considerably less on weekends. The assessment found that this additional volume of heavy vehicle traffic would have little, if any impact on the current road network which was found to be operating within acceptable limits.

During the construction period, potential impacts to traffic flows were considered to be acceptable and that any potential additional delays created by this construction work will be temporary and acceptable to road users.

Temporary parking facilities will be provided for construction workers and adequate parking facilities will be provided for the additional personnel employed at the facility as a result of the expansion. New site access points will also be constructed to ensure additional traffic movements are catered for.

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Surface Water Quality

STORM Consulting Pty Ltd was engaged to prepare a water management assessment of existing and proposed operations at the site, consisting primarily of stormwater and effluent management.

The site is currently divided into 7 separate stormwater catchments with a ‘first flush’ system and storage tank in operation in three of the catchments. The detailed design of the proposed expansion would incorporate a number of environmental safeguards to minimise the potential to contaminate stormwater including the use of bunding, roofing to prevent stormwater ingress into process areas and management of vehicle traffic to prevent transport of contaminants outside of process areas. In addition, the design strategy would also consider the risk of contamination in determining the level of management required for the stormwater. Part of this approach is to use and optimise existing infrastructure such as first flush tanks and minimise the reliance on stormwater infrastructure where feasible. Where feasible, the design will consider whether roof water and other sources from ‘low- intensity use’ areas can be discharged to landscaped areas for treatment and disposal of stormwater runoff.

Where possible, liquid streams are recycled on site in various processes to increase the plant water efficiency and reduce the effluent volumes and contaminant loads. Liquids that cannot be recycled within the existing operations are collected, managed and disposed of via the site effluent system. The site effluent system consists of a network of effluent pipes from all areas of the plant that direct waste water that meets the discharge criteria to the Hunter River via an utresci diffuser system.

The proposed expansion would result in additional effluent volumes being produced on site, primarily as a result of the additional Cooling Towers and potential expansion of the Demineralised Water Plant but would be within the effluent quantity and quality conditions of the current environment protection licence. A range of mitigation measures would be implemented to minimise the effluent output volume from the proposed expansion and to improve site efficiency through effluent reuse. New plant design would have effluent recovery measures integrated into the design, including the use of equipment to minimise water consumption and recycling liquid streams within site processes where possible.

Resource Implications and Interfaces

The key resources consumed during the daily operation of the facility have been identified as water, electricity and natural gas. The proposed plant expansion will increase the demand for natural gas and water; however, the increases in demand can be safely and effectively supplied. The proposed expansion includes initiatives designed to reduce electricity consumption at the plant.

The proposed expansion would increase the demand for potable water by approximately 50%, primarily from new Cooling Towers. Hunter Water Corporation (HWC) is currently investigating opportunities to supply facilities on Kooragang Island with recycled water to reduce reliance on potable water. Orica is actively involved in discussions with HWC regarding this opportunity which would see a reduction in its potable water use.

Natural Gas consumption, primarily used for manufacturing ammonia, is expected to increase from approximately 12 PJ per annum to 14 PJ per annum. Design improvements in the Ammonia Plant are expected to result in an approximate 4% improvement in the gas efficiency of the Ammonia Plant.

The proposed expansion includes initiatives in the Ammonia Plant and new Nitric Acid Plant designed to reduce electricity consumption. As such, there is expected to be a modest decrease in electricity consumption by up to 8% and resulting in a site net usage of approximately 98 GWh per annum.

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Soil and Groundwater Quality

Through previous investigations, a number of areas of soil and groundwater contamination have been identified at the site, including arsenic, ammonia/ammonium and nitrite/nitrate. However, it is not proposed to undertake any construction activities in the vicinity of the known arsenic or ammonia contamination.

The CSEMP would include requirements for the assessment of water quality and the management of water generated during any dewatering activities that are required to be undertaken at the site. It would also include requirements to minimise the risk of contamination of soil and groundwater as a result of the construction activities, including refuelling of equipment and handling of chemicals. The expanded facility would include a number of measures designed to contain potential contaminants, such as sealed floors and bunding.

It is anticipated that the construction and ongoing management of the proposed expansion would not adversely impact the existing area of groundwater and soil contamination, providing the identified control measures are implemented.

Visual

Kooragang Island (‘the Island’) is essentially flat and low-lying with an overall industrial character in the vicinity of the Facility. The existing site consists of three Nitric Acid Plants, an Ammonia Plant, two Ammonium Nitrate Plants (including a Prill Tower) and other related infrastructure including storage sheds, cooling towers and discharge stacks. There are also heavy vehicles using Greenleaf and Heron Roads and freight ships travelling along the Hunter River.

The proposed expansion would result in industrial infrastructure similar to that already existing on the site, and would be visually consistent with existing facilities in the immediate surrounding industrialised area. The expansion would consist of similar structures to existing infrastructure including a Nitric Acid Plant, Ammonium Nitrate Plant (including a new Prill Tower) and other infrastructure such as storage sheds, cooling towers and boiler.

There would be a number of new sources of visible air emissions which would include NAP4 Stack on start-up and shut-down, Cooling Tower discharge, steam vents, and the ANP3 Dry Section Scrubber and Evaporator discharge. These would be consistent or of lower visual impact than existing sources. Modern technologies will be used to minimise the effects of visible air emissions.

Given the visual similarity to existing infrastructure, the visual impacts of the proposed expansion would not create an additional overbearing focus on the Orica site, despite some intensification of the industrial landscape of the facility.

Flora and Fauna

The site is located on reclaimed land in a highly modified industrial area and, as such, there are no remnant areas of native vegetation, however the site is located to the south of the Hunter Estuary National Park.

The proposed expansion will incorporate preventative measures already successfully implemented on site for the current operations to minimise the impact of the expansion on flora and fauna. This will include systems to prevent the discharge of pollutants to waterways as a result of leaks / spills and control of air emissions. The CSEMP will include controls to minimise potential impacts during the course of the construction activities at the site.

With the implementation of these controls the proposed expansion is unlikely to have a significant impact upon flora and fauna on the site.

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Heritage

Kooragang Island has been identified as having cultural heritage significance to the Aboriginal community, however, no specific cultural values have been identified on the site and the site is considered as having a low archaeological potential due to the history of land reclamation activities on the Island and the industrial nature of the area to be impacted by the proposed works.

It is considered that the Aboriginal Heritage Significance of the site is low. Significant impacts in respect of Aboriginal Heritage are unlikely to result from the proposed expansion.

Climate Change

The potential impacts of climate change include sea level rises (SLR), rising temperatures and a decrease in rainfall. The area of Kooragang Island where Orica’s facility is located is at an elevation of approximately 2 – 4 m Australian Height Datum (AHD) according to the Digital Elevation Model (DEM) of Newcastle LGA (NSW DoP, 2008). Storm surge in association with anticipated sea level rises (SLR) may potentially impact Kooragang Island if the seawalls were breached. If such an event were to occur, many developments along the Hunter River, including the Orica facility may be impacted. The current likelihood of such an event occurring is quite low. Nevertheless, if the SLR increases according to predictions or beyond, mitigation measures may need to be implemented.

Waste

In 2007 Orica committed to moving towards becoming a business that does no harm to people and the environment, including becoming a zero waste company. A number of waste management strategies would be implemented to deal with waste resulting from construction and operation of the expanded facility. Waste materials would be recycled where possible, with a comprehensive recycling programme operated at the site, however, chemical contamination makes this unfeasible in some situations. Reuse and recycling options will be incorporated into the design of the new plants to minimise the generation of liquid wastes. All non recyclable wastes would be assessed in accordance with DECC guidelines for waste classification and disposed of to approved waste disposal facilities.

Disposal of materials would only be undertaken by licensed contractors and Orica would ensure appropriate final disposal is undertaken. It is predicted that there would not be significant residual impacts associated with wastes generated from the proposed expansion.

Residual Risk

A residual risk analysis was undertaken to assess the residual risk of the project following the implementation of safeguards and mitigation measures. The residual risk analysis indicates that the proposal presents an overall low to low/medium risk in relation to each of the identified environmental issues, provided that the recommended mitigation, management and monitoring measures are implemented.

Cumulative Impacts

The cumulative impacts of the proposed expansion to the Kooragang Island Facility have been considered in relation to each identified environmental issue. In addition, air quality, noise and vibration, traffic and hazards and risk have been considered in each of the technical studies in respect of this proposal.

As the potential impacts for each of the environmental factors are considered minimal with the implementation of appropriate mitigation measures as described in this EA, no significant cumulative impact is expected.

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Statement of Commitment

The Statement of Commitments (SoC) sets out Orica’s environmental commitments and details on the environmental management and monitoring of the proposed project during its construction and operational activities. The SoC prepared in respect of the proposed construction and operation of the proposed expansion of the Ammonium Nitrate Facility has been compiled on an issues basis and is informed by the environmental risk analysis and impact assessment undertaken as part of this EA. The SoC has been written in a format which can be incorporated into the project approval issued to act as the conditions of that approval.

Project Justification

The proposed expansion provides an opportunity to expand an existing successful operation which is consistent with other industrial activities in the area, and has the potential to contribute positively to the local, regional, State and national economies. The proposed expansion would provide modern plant and technologies which would improve plant efficiencies resulting in reduced greenhouse gas emissions; and would also provide improvements to the operating environmental performance of the overall AN facility.

The key potential biophysical effects of noise, air quality and water quality have been assessed as low, after appropriate mitigation and management measures are implemented. The project is therefore justifiable in terms of the biophysical environment.

The proposed expansion would contribute significantly to the local, regional, State and national economies and the international market. Economic contributions would be generated from domestic and export earnings, taxes, salaries, and purchases of goods and services during the construction and operational phase of the expansion. The proposed expansion would provide local direct and indirect employment opportunities. The two year construction phase is expected to require a construction workforce peaking at 250 personnel. The operational phase of the project is expected to provide long term employment for up to 20 personnel and up to an additional 50 contractors providing services such as maintenance, transport and support services. Therefore overall, the proposed expansion is considered to be justifiable from an economic perspective.

The assessments presented in this EA regarding visual amenity, air quality, hazard and risk, noise, economic, heritage and culture, and transport and traffic indicate that provided appropriate mitigation and management measures as outlined in the Statement of Commitments are implemented, the proposed expansion would have a minimal and acceptable impact on socio-cultural issues. The proposed project is therefore justifiable on social grounds.

The project is also consistent with the principles of ecologically sustainable development (ESD).

Conclusion

In summary the project would be upgrading existing infrastructure and introducing new technology which would improve plant efficiencies, risk profile and environmental performance in a number of areas whilst minimising environmental impact in others. Biodiversity would not be adversely impacted. Visual amenity will remain largely unchanged, with the new development occurring within the existing industrial landscape. The project is considered justifiable on biophysical, economic and social grounds, and is considered to be consistent with the principles of ESD.

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1.0 Introduction

1.1 Background ENSR Australia Pty Ltd. (trading as AECOM and hereafter referred to as AECOM) was engaged by Orica Australia Pty Ltd to prepare this Environmental Assessment (EA) for the proposed expansion of its existing Ammonium Nitrate Production Facility. The existing business is located at Lot 3, D.P. 234288, No. 15 Greenleaf Road, Kooragang Island (refer Figure 1-1).

Orica Australia Pty Ltd (ACN: 004 117 828) is seeking approval of the expansion under Part 3A of the Environmental Planning and Assessment Act 1979 (EP&A Act) that will result in an increase of Ammonium Nitrate production capacity from the current 500 kilotonnes per annum (ktpa) to 750 ktpa.

The existing Ammonium Nitrate Production Facility commenced operation in 1969, with subsequent expansions in 1988 and 2004, and is the location for a number of plants that manufacture ammonia, nitric acid and ammonium nitrate. Ammonia and nitric acid are the raw materials used in the manufacture of the ammonium nitrate. The proposed expansion of the ammonium nitrate facility would primarily require:

• An additional Nitric Acid Plant (NAP4); • An additional Ammonium Nitrate Plant (ANP3); • Modification of the existing Ammonia Plant; • Additional storages for nitric acid, solid ammonium nitrate and ammonium nitrate solution; and • Upgrading of existing infrastructure such as cooling towers, air compressors, loading facilities, modifications to site access points, electrical systems, effluent treatment systems and the steam system. Ammonia production would be increased from 295 ktpa to 360 ktpa. The additional nitric acid plant (NAP4) would have a capacity of 260 ktpa. This plant would expand the site’s nitric acid production capacity from 345 ktpa to 605 ktpa.

Ammonium nitrate production would be increased by 320 ktpa from 430 ktpa to 750 ktpa. This would be achieved by fully utilising the capacity of the existing facilities and the proposed facilities.

Expanding the existing Orica facility at Kooragang Island is expected to:

• Improve the facility’s competitive position, thereby increasing the viability of the facility; • Improve asset productivity; • Provide increased short term (during construction) and long term (during operation) employment; • Provide environmental improvements to the facility;

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• Improve technology being used at the facility; • Improve Australia’s balance of trade by decreasing the need for imported ammonium nitrate and increasing potential product for export; and • Facilitate growth in the Hunter Valley coal industry and mining activity across south east Australia and other areas. An indicative site layout is shown in Figure 1-2.

1.2 The Applicant The applicant for the proposed project is Orica Australia Pty Ltd (Orica). Orica is an independent, Australian-owned company which operates through the following business platforms:

• Mining Services - offers commercial explosives, initiating systems and Blast-Based Services to the mining, quarrying and construction industries; • Minova - supplies specialist chemical products for underground mining and civil engineering activities; • Orica Chemicals - is a major supplier and trader of chemicals, services and technology to the water treatment, mining chemical and industrial chemical markets; and • Orica Consumer Products – supplies a range of decorative paints, surface preparation products, and garden care products. The Kooragang Island site is a part of Orica’s Mining Services business platform, primarily providing ammonium nitrate which is utilised in the manufacture of commercial explosives for the mining and quarry industries.

1.3 Project Location Kooragang Island is located within the Port of Newcastle, approximately 3 km north of Newcastle Central Business District (CBD).

The Island was developed in 1951 as part of the Hunter River Islands Reclamation Scheme, which joined Dempsey, Moscheto and Walsh Islands within the Hunter River with dredged sand and fill material. The development was completed in 1960 and officially named in 1968. The island covers an area of approximately 2600 hectares and it has been designated for industrial development and port related activities. The Orica facility, which is located on Kooragang Island, has manufactured ammonia, nitric acid and ammonium nitrate at the site since the facility was commissioned in 1969.

Today crown land on the Island is owned by the State Property Authority (SPA) and is managed by Newcastle Port Corporation (NPC) and/or Hunter Development Corporation, whilst freehold land is owned by industrial operations. Existing industrial developments on the Island include Port Waratah Coal Service, wharf facilities, coal and woodchip loaders, Incitec Pivot Ltd, Sims Metal Ltd, Cargill, BOC Gases, Cleanaway, Boral, A. J. Meyer and Transfield Pty Ltd. The Hunter Estuary National Park is located approximately 1.5 km north of the site.

Kooragang Island forms a promontory, separating the north and south arm of the Hunter River. The Orica facility is situated on the southeastern most part of Kooragang Island as shown in Figure 1-1.

As such, industrial neighbours directly adjoining the site are limited to the west and north of the site due to the close proximity of the Hunter River. The State government-owned Greenleaf and Heron Roads run along the eastern, southern and western boundary of the site. Various industrial and residential

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neighbours are also located within 800m of the facility across the Hunter River as further discussed below.

The nearest residential premises are located at Stockton, approximately 800m east of the Orica property boundary. There are also residential properties to the west at Carrington and Mayfield, 1.5km and 2km respectively.

The land surrounding the Orica facility is mainly used for industrial and port related activities as further discussed below and shown on Figure 1-1.

North

Incitec Pivot Limited (IPL) operates a primary distribution centre for straight and blended fertilisers, situated directly to the north of the Orica facility.

A non-hazardous bulk liquids facility is also located directly to the northwest of the Orica facility. The facility handles a diverse range of edible vegetable oils and shortenings for export and import from the Cargill facility on Kooragang Island. The terminal is serviced by road, rail and ship. It is connected to No.2 Kooragang Berth for loading via a pipeline.

Cement imports are handled by a bulk cement silo operated by Australian Cement, located directly northwest of the Orica facility. Road tankers transport the blended cement throughout the region.

Kooragang Bulk Facilities (KBF), located next to No. 3 Kooragang Berth, operates a purpose-designed ship unloading and storage facility (using No. 3 Kooragang Berth) that handles alumina and petroleum coke, destined for the aluminium smelters at Tomago and Kurri Kurri. These raw materials are then transported by road to the smelters.

HiFert also has a fertiliser dispatch facility and distribution centre located approximately 1.2 km to the north of the Orica facility.

Coal loading facilities operated by Port Waratah Coal Services are located at a 160 ha site approximately 1.5 km to the northwest of the Orica facility on Kooragang Island. All coal received at the Kooragang operation is delivered by rail.

The Orica facility is located approximately 1.5 km south of the Hunter Estuary National Park, sections of which are subject to two international treaties on migratory birds, JAMBA and CAMBA. The area is an important natural wetland area and wildlife habitat.

West

An agriterminal, located directly southwest of the Orica facility, is used for the storage and loading of cottonseed and other seeds and grains. The ship loader is also used to transfer woodchips and sands.

No. 2 Kooragang Berth is managed by P&O and it is used for unloading cement, vegetable oil, woodchip and bulk products (fertilisers, ammonia and ammonium nitrate etc).

Sawmillers Exporters Pty Ltd operates a major export point for woodchips from the north-east forests of NSW. The site is located directly to the west of the Orica facility on Kooragang Island.

Port Waratah Coal Services also operate a coal loading facility at Carrington, across the Hunter River from Kooragang Island.

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The Hunter Development Corporation (HDC) owns and manages the Mayfield Port-Side Lands (formerly part of the BHP Steelworks site) located on the southern foreshore of the South Arm of the Hunter River. Future planning for the site is underway to enable development of port terminal facilities.

OneSteel also operates a wire, rod and bar mill approximately 3 km to the west of the Orica facility.

South

Immediately to the south of the site is a Patricks warehousing and despatch facility. A number of other industries and ship loading facilities are also located further to the south across the Hunter River. These include the Graincorp Bulk Grain Terminals which operate storage and despatch facilities and the Eastern Basin Distribution Centre (Patricks) which provides multi-purpose cargo handling facilities.

East

Whilst the land to the east of the site is currently vacant there is a proposed development for the construction and operation of a marine fuel oil and diesel bunker terminal for the refuelling of ships and a biodiesel production facility and associated infrastructure (Department of Planning approval - MP 07_0066). This would incorporate the usage of the 2 existing but disused tanks on the north eastern boundary of the site. More specifically, marine fuel oils, diesel and the primary raw materials for biodiesel production would be received primarily by ship at Kooragang Berth 2 or 3 and transferred to the Greenleaf Road Terminal for storage / biodiesel manufacture, via a steel pipeline. The marine fuels, oils and biodiesel would then be distributed via pipeline to a refuelling barge and then to ships within the Port of Newcastle or by road to bulk diesel users within the region.

A Lot and DP map is shown in Figure 1-3. The Orica facility is DP 234288/3.

1.4 Project Site History The Orica facility at Kooragang Island commenced operation in 1969 with the Ammonia Plant, No. 1 Nitric Acid Plant (NAP1) and No. 1 Ammonium Nitrate Plant (ANP1). A major site expansion was undertaken in 1988 which involved the construction of the No. 2 Nitric Acid Plant (NAP2) and No. 2 Ammonium Nitrate Plant (ANP2). An additional major site expansion was undertaken in 2004 to increase ammonium nitrate production and increase storage capacity. This included the addition of No. 3 Nitric Acid Plant (NAP3). The original plants have all undergone various upgrades to increase output and improve efficiency since the original commissioning in 1969. A site layout is shown in Figure 1-2 and further details about the processes involved in producing ammonium nitrate are provided in Section 2.

1.5 Current Operations Ammonium nitrate is produced onsite as a precursor for use in the manufacture of commercial explosives for the mining and quarry industries. Ammonium nitrate product is produced either in solution form or as one of three solid forms. The solid forms consist of a prilled product known as Nitropril® and two granulated products known as Opal™ and Chemically Pure Ammonium Nitrate (CPAN).

Nitropril® is a low density porous prilled grade of ammonium nitrate. Opal™ is a high-density granulated grade of ammonium nitrate. Both these products are specifically formulated for use as oxidisers in blasting agents. CPAN, a high-density granulated grade, is used in the manufacture of medical gases. The potential exists to also supply ammonium nitrate solution into industrial markets.

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Currently, most of the Nitropril® manufactured at the facility is despatched to mines in the Hunter Valley and south eastern Australia. Orica does move both Nitropril® and Opal from the Kooragang Island site to more distant markets in Queensland and North West Western Australia and exports to Indonesia, Papua New Guinea and New Zealand as well as other countries throughout Asia and the Pacific. Most of the ammonium nitrate solution is used in the Hunter Valley after conversion to emulsions at Orica’s Hunter Valley emulsions facility. Some ammonium nitrate solution is also sold into industrial markets.

Minor quantities of primary products from the facility are also sold. This includes approximately two ktpa of nitric acid which is loaded into road tankers for industrial sales. A portion of the carbon dioxide, a by- product from the ammonia production process, is also collected and sold for use by the carbonated drinks industry. Surplus ammonia is either transported via ship to Orica’s ammonium nitrate manufacturing facility in Gladstone, Queensland, on-sold for use as a fertiliser or is bottled for industrial sales.

The site currently has three primary development consents and an Environmental Protection Licence (EPL) for its operations. These are provided in Appendix C.

1.6 Need for the Project The long term global demand for mineral commodities such as coal, iron ore and other metalliferous products is growing significantly and is forecast to continue to do so over the next decade. Growing populations in developing regions and the industrialisation of China and India, in particular, is underpinning this global demand for minerals inputs. Growth in coal trade to support new electricity generation in these regions and the need for steel and metal products for building and infrastructure development will underpin strong growth in mining activity in Australia and across the Asian region. Major expansions of mining operations and infrastructure activity have been announced in Eastern Australia to support this long term growth. Major expansions of the capacity for coal loading are currently underway in Newcastle which will be utilised by future developments in coal mining from the wider Hunter Valley region.

Orica is the world's leading provider of commercial blasting products and solutions to the mining industry. Orica's business is run globally with a presence in Australia, Asia, North America, Latin America, Europe, Middle East and Africa. The Hunter Region is a significant contributor to Orica's Mining services business with some 450 employees in manufacturing, sales and marketing, operations, technical development and support.

Industrial grade ammonium nitrate is the main raw material used in the manufacture of commercial blasting products used by the mining, quarry and construction industries. Orica manufactures industrial grade ammonium nitrate, including the raw materials ammonia and nitric acid, at its Kooragang Island plant in Newcastle, NSW. Ammonium nitrate is distributed to bulk operations in the Hunter Valley and across South East Australia as well as export markets in Asia and the Pacific to support its mining services business. In support of the increase in mining activity, there will be considerable growth in demand for explosives, including the raw material ammonium nitrate. Orica plans to expand its operations at Kooragang Island to meet the growing needs for explosives in South Eastern Australia, Queensland and the Asia region.

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1.7 The Environmental Assessment Process The Environmental Planning and Assessment Act 1979 (EP&A Act) and the EP&A Regulation 2000 provide a framework for environmental planning in NSW.

Prior to a decision to proceed with a proposal that may have an impact on the environment, a detailed assessment of the likely impacts of the project must be undertaken. The proposed project has been declared by the Minister as a ‘major project’ under the provisions of the EP&A Act and State Environmental Planning Policy (Major Projects) 2005 (SEPP 2005), and is therefore subject to the provisions of Part 3A of the EP&A Act with the Minister being the approval authority (see Appendix B).

1.8 Major Projects The proposal falls under the definition of a ‘major project’ under Group 3 of Schedule 1 of SEPP 2005.

Group 3 of Schedule 1 of SEPP 2005 identifies classes of development which are defined as ‘major projects’ under Part 3A of the EP&A Act, and includes chemical, manufacturing and related industries, being:

1 ‘Development that employs 100 or more people or with a capital investment value of more than $20 million for the purpose of the manufacture or reprocessing of the following (excluding labelling or packaging): e) ammunition or explosives

The project was also declared under Schedule 2 of the SEPP (Major Projects) given its location within the Coastal Protection Zone:

1 Coastal areas

(1) Development within the coastal zone for any of the following purposes:

agricultural produce industries, bitumen pre-mix industries, breweries or distilleries, cement works, ceramic or glass industries, chemical industries or works, chemical storage facilities, composting facilities or works, contaminated soil treatment works, crushing, grinding or separating works, drum or container reconditioning works, electricity generating stations, livestock intensive industries, livestock processing industries, mineral processing or metallurgical works, paper, pulp or pulp products industries, petroleum works, wood or timber milling or processing works, or wood preservation works

The proposed expansion is located within the Coastal Protection Zone and has a capital value in the order of approximately $500 million, therefore, it satisfies the relevant criteria to be determined under Part 3A of the EP&A Act.

A project approval under section 75J of the EP&A Act is therefore being sought for the proposed Ammonium Nitrate Facility Expansion.

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1.9 Environmental Assessment Scoping Report The Environmental Assessment Scoping Report (EASR) formed the preliminary environmental assessment for the proposed works, as required under Part 3A of the EP&A Act, and provided the Minister for Planning with an outline of information and background environmental data on the site and the proposed project. This allowed the key environmental issues of significance and the level of environmental assessment required for the application to be established.

The EASR for the proposed project identified various issues as of medium - high priority as summarised below.

• Air Quality (emissions) – potential impacts through emissions of particulates, ammonia and nitrogen oxides (NOx). There are some mitigation measures available as further discussed in Section 7. Greenhouse gases are described in Section 8. • Noise and Vibration - potential impacts to the surrounding noise environment during construction and operation. There are some mitigation measures available as further discussed in Section 9. • Hazard and Risk – potential impacts due to the hazardous substances that would be used, manufactured and stored on-site. A Preliminary Hazard Analysis (PHA) has been prepared for the EA in accordance with the requirements of SEPP 33 in addition to HIPAP No. 6 and approaches recommended in “Multi Level Risk Assessment” (DoP, 1994). This is further addressed in Section 10. • Traffic and Transport – potential impacts of traffic movement on the surrounding road networks due to construction and operation of the proposed development. This is further discussed in Section 11. • Water management – potential for increased volumes of effluent including nitric acid solutions, ammonium nitrate solutions, cooling water and boiler blowdowns and process condensate. There are some mitigation measures available as further discussed in Section 12. • Resource implications – potential increase in demand on resources including water, electricity, natural gas and fuel. The availability of these resources and potential impacts that the proposed development may have on resources is further investigated in Section 13. Additional environmental impacts were identified in the EASR, however, the potential impacts associated with these were expected to be minimal. Although each of these issues would require a lower level of assessment than the key environmental issues listed above each issue is discussed in the EA and appropriate mitigation measures and environmental safeguards are identified in the Statement of Commitments (Section 18) to ensure potential impacts are minimised and properly managed.

1.10 Environmental Assessment Requirements Under section 75F of the EP&A Act, an EA must be prepared in accordance with the Environmental Assessment Requirements (EARs) of the Director-General of the Department of Planning (DoP). The Director-General’s EARs were requested in June 2008 and were issued on 8 August 2008. A copy is attached as Appendix A to this EA. This EA has been prepared in accordance with the EARs.

1.11 Preparation of this Environmental Assessment The EASR identified a number of issues of high priority. As such, technical specialists were engaged to assess potential impacts of the proposal to air quality, hazard and risk, traffic, noise and water/effluent management. These reports are included in the Appendices and summaries detailed within the body of the report.

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1.12 Stakeholder Consultation During the preparation of this EA, key stakeholders were identified to be consulted. These stakeholders included local community groups as well as key government agencies. Throughout the preparation of the EA, these stakeholders have been kept informed of the progress of the project and these stakeholders have requested certain matters be addressed.

Further details on consultation are discussed in Section 5 and Appendix D.

1.13 EA Exhibition This EA has been prepared under Part 3A of the EP&A Act which specifically lists the matters to be addressed in the EA.

The EP&A Act requires that the EA be placed on exhibition for public review for a minimum period of 30 days.

1.14 Purpose of this Report This EA has been prepared by ENSR on behalf of Orica for the proposed expansion of the Ammonium Nitrate Facility located at Kooragang Island.

In accordance with Part 3A of the EP&A Act, this EA has been prepared pursuant to the Director- General’s EARs and addresses the matters listed by the Director-General. The purpose of this report is to assess the environmental effects of the proposal and to describe the measures necessary to minimise the impact of identified adverse environmental effects in order that the Minister for Planning can make an informed decision with regard to the proposal.

1.15 Structure of this Environmental Assessment To inform relevant government agencies, the community and the local council of the environmental issues associated with the project, such that the level and detail of environmental assessment required is understood, this EA has been structured to provide information on broad areas as follows:

• Section 1 – provides a detailed background to the project, including information about the applicant and the need for the project; • Section 2 – provides context of the current operations at the facility; • Section 3 – provides a detailed description of the proposal including infrastructure requirements and associated activities during construction and operation of the expanded facility; • Section 4 – describes the legislative context, including the approvals required; • Section 5 – describes the consultation process undertaken as part of the approvals process; • Section 6 – provides a summary of the environmental issues identified in the EASR and their prioritisation; • Section 7 – Air Quality; • Section 8 – Greenhouse Gases; • Section 9 – Noise and Vibration; • Section 10 – Hazard and Risk;

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• Section 11 – Traffic and Transport; • Section 12 – Surface Water; • Section 13 – Resources Implications; • Section 14 – Groundwater and Soils • Section 15 – Visual; • Section 16 – Other Environmental Issues; • Section 17 – Residual Environmental Impacts; • Section 18 – Statement of Commitments; • Section 19 – Project Justification; and • Section 20 – Summary of Findings.

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Newcastle Airport/Port Stephens

Hunter Estuary National Park

Kooragang Coal Loader

6 Cormorant Rd Hunter River (South Arm)

Raven St Curlew St

Egret St 5

Teal St

4 Kooragang Berths 4, 5 & 6 10

BHPBilliton Berths 3, 4,& 5 4 1 2 3 MAYFIELD 9 3 4

Kooragang Berths 1, 2 &8 3 Site Location 7

STOCKTON

TO CARRINGTON

11 1 Incitec Pivot 7 Agriterminal 2 Cargills Bulk Liquids Facility 8 Sawmillers Exporters Pty Ltd 3 Australian Cement 9 Hunter Development Corporation 4 Kooragang Bulk Facilities 10 OneSteel 5 HiFert 11 Eastern Basin Distribution Centre 6 Port Waratah Coal Service

G:\Jobs\S6\S60600_S60699\S60653\EA\S6065303 F1.1 27 04 2009

Figure 1.1 Site Location Orica Australia Pty Ltd 0 1km Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

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G:\Jobs\S6\S60600_S60699\S60653\EA\S6065303 F1.2 27 05 2009 TO

14 13 3

HERON ROAD

Hunter River (South Arm) 15 4 5 6

New Truck Entrance Point

Existing Infrastructure Key 12 7 10 1 Ammonia Plant 7 Boiler Plant 2 Utilities Area 8 ANS 11 8 3 Acid Storage 9 AN Plant 2 4 Nitric Acid Plant 3 10 AN Plant 1 16 9 5 Nitric Acid Plant 2 11 AN Bulk Storage 17 Hunter River (North Arm) 6 Nitric Acid Plant 1 12 Bagged Product Storage 18 GREENLEAF ROAD 19 Proposed Infrastructure Key 20 13 New Acid Storage 18 New Bulk Storage New Truck 14 Cooling Towers 19 AN Plant 3 Exit Point 21 15 Nitric Acid Plant 4 20 Bulk Loading Bays 16 Bagged Product Storage Extension 21 Container Storage 17 ANS Storage and Loading

Site boundary Figure 1.2 Proposed Site Layout Proposed infrastructure location Orica Australia Pty Ltd 0 100m Existing infrastructure location Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

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1 utrRvr(ot Arm) (North River Hunter

DP 557904

13 Lot and DP Numbers Orica Australia Pty Ltd Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

10 2 Figure 1.3

8 P234887 DP

DP 234288

DP 575674

62 P802700 DP 63

60 100m

0 utrRvr(ot Arm) (South River Hunter G:\Jobs\S6\S60600_S60699\S60653\EA\S6065303 F1.3 12 02 2009 TO

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2.0 Current Operations

2.1 Overview The existing Ammonium Nitrate Facility at Kooragang Island has been operating since 1969 (expansion in 1988 and 2004) and is the location for a number of plants that manufacture ammonia, nitric acid and ammonium nitrate. The existing Facility consists of:

• One Ammonia Plant; • Three Nitric Acid Plants; and • Two Ammonium Nitrate Plants. The current ammonium nitrate (AN) production at Kooragang Island is 430 ktpa with capacity for 500 ktpa. Ammonium nitrate product is produced either in solution form (ANS) or as one of three solid forms. The solid forms consist of a prilled product known as Nitropril® and two granulated products known as Opal™ and Chemically Pure Ammonium Nitrate (CPAN). Current production quantities from the facility are summarised below

Table 2-1: Current Production Quantities (ktpa) Plant Ammonia Product Nitric Acid Product AN Product Ammonia Plant 295 NAP1 150 NAP2 90 NAP3 105 ANP1 270 (Nitropril®) ANP2 100 (ANS) 60 (Opal™/CPAN) Total (ktpa) 295 345 430 Note: The total volume of AN produced is not a derivative of the total sum of Ammonia and Nitric Acid products.

Nitropril® is a low density porous prilled grade of AN, which consists of solid spherical ammonium nitrate particles 1.5 to 2.5 mm in diameter. Opal™ is a high-density granulated grade of AN. Both these products are specifically formulated for use as oxidisers in blasting agents which are used primarily for the mining industry. CPAN is also a high-density granulated grade of AN and is used in the manufacture of medical gases.

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2.2 Primary Operational Components 2.2.1 Ammonia Plant The Ammonia Plant was constructed when the Kooragang Island site began operations in 1969. It was originally designed to operate with naptha as the feedstock. In 1982 it was converted to use natural gas as a feedstock. It has undergone a number of upgrades in capacity and efficiency over the life of the plant and now operates with a capacity of 295 ktpa.

2.2.2 No. 1 Nitric Acid Plant (NAP1) The NAP1 was constructed when the Kooragang Island site began operations in 1969. It has been considerably upgraded in both capacity and in environmental performance. The NAP1 uses a steam driven turbine and operates year round at its maximum capacity of 150 ktpa of nitric acid. The plant has a 84m high stack which is the dominant feature of the site.

2.2.3 No. 2 Nitric Acid Plant (NAP2) The NAP2 was constructed in 1988 as part of a site expansion to produce more ammonium nitrate. The NAP2 uses an electric driven compressor train and operates year round at its maximum capacity of 90 ktpa of nitric acid.

2.2.4 No. 3 Nitric Acid Plant (NAP3) The NAP3 was constructed in 2004 as part of a facility upgrade. This NAP3 uses a steam driven turbine and operates year round at its maximum capacity of 105 ktpa of nitric acid.

2.2.5 No. 1 Ammonium Nitrate Plant (ANP1) The ANP1 was constructed when the Kooragang Island site began operations in 1969. It currently manufactures 270 ktpa of Nitropril with capacity for 340 ktpa.

2.2.6 No. 2 Ammonium Nitrate Plant (ANP2) The ANP2 was constructed in 1988 and currently manufactures 100 ktpa of ANS and 60 ktpa of Opal™ and CPAN.

2.3 Outline Process Description A process flow diagram demonstrating the steps in the current operation of the Orica facility is shown in Figure 2-1. In summary, the process includes three components as shown in Figure 2-2 to Figure 2-4.

These processes include:

• Ammonia Manufacturing (Figure 2-2): The Orica Facility consists of one Ammonia Plant, where hydrogen gas is first produced from the steam reforming of natural gas. The impure hydrogen gas is mixed with air to supply the nitrogen and then goes through a number of purification steps prior to conversion to ammonia. The resulting ammonia is then liquefied. Ammonia is used in the production of nitric acid and ammonium nitrate. Some ammonia is also sold for use as an agricultural fertiliser and into industrial markets primarily as a refrigerant. • Nitric Acid Manufacturing (Figure 2-3): Nitric acid (NA) is produced in three Nitric Acid Plants (NAPs) by reacting vapourised ammonia with air under pressure in the presence of a catalyst. The nitrogen oxides created in this process are then reacted with water to produce nitric acid. Nitric acid is used in the production of ammonium nitrate and a minor quantity is also sold for use in other industrial applications.

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• Ammonium Nitrate Manufacturing (Figure 2-4): Ammonium nitrate (AN) is manufactured through the reaction of ammonia and nitric acid. The resulting ammonium nitrate solution is either stored and despatched as ammonium nitrate solution, or further concentrated, solidified, dried and cooled as a prilled or granulated ammonium nitrate product. Ammonium nitrate is utilised as a precursor in the manufacture of explosives for the mining and quarry industries. Each of these components is described in further detail below.

2.4 Ammonia Production 2.4.1 Background The existing Ammonia Plant is a standard M. W. Kellogg design which was built in 1969. The plant originally used naphtha as feedstock and fuel, but was converted to natural gas in 1982. Numerous improvements have been incorporated in the plant to achieve the current capacity of 850 tonnes per day (tpd) and the current efficiency. A description of the ammonia production process is provided below with references to Figure 2-2.

2.4.2 Desulphuriser Natural gas feedstock is initially mixed with a recycled make up gas stream from the synthesis gas compressor and the mixture is heated in a fired heater. Hot gas is passed to the catalytic Desulphuriser Reactor (see reference 1 in Figure 2-2), which reduces the sulphur content of the natural gas. The gas then passes through a saturator, where it contacts hot process condensate, generating steam which strips the process condensate of pollutants. The gas stream is then heated in a coil in the reformer flue gas duct before entering the Reformers.

2.4.3 Primary and Secondary Reformers Desulphurised natural gas is reacted with steam over a nickel catalyst in the Primary Reformer (see reference 2b in Figure 2-2) to convert the hydrocarbons to produce a gas containing hydrogen (H2), carbon dioxide (CO2), carbon monoxide (CO) and methane (CH4).

The reactions occurring in the Reformer may be written as follows:

CH4 + H2O CO + 3H2 - Heat

CO + H2O CO2 + H2 + Heat

This gas then passes directly to the Secondary Reformer (see reference 3 in Figure 2-2) into which process air is introduced in a quantity sufficient to give the correct proportion of H2 and nitrogen (N2) for ammonia synthesis.

2.4.4 Shift Conversion The gas leaving the Secondary Reformer passes directly to a waste heat recovery boiler (see reference 4 in Figure 2-2) and then to a boiler feed water heater. The gas then passes to the Shift Converter (see reference 5 in Figure 2-2 ) in which the carbon monoxide is converted to carbon dioxide and an equivalent amount of hydrogen is produced as shown below.

CO + H2O CO2 + H2 + Heat

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2.4.5 Carbon Dioxide Removal The carbon dioxide in the gas stream is then removed in a two step process: an absorption step in an amine solution at low temperature and high pressure (where CO2 is removed), and the regeneration of the amine solution at low pressure slightly above atmospheric pressure and high temperature, where the absorbed CO2 is removed and the amine solution recycled back to the Absorber. The CO2/steam mixture leaving the top of the Stripper is cooled to condense the steam before some of the CO2 is compressed in blowers for liquefaction, and the rest is vented to atmosphere (see reference 6 in Figure 2-2).

2.4.6 Final Purification In the final stage of gas purification the concentrations of carbon monoxide and carbon dioxide are reduced to very low concentrations by catalytic methanation over a high nickel containing catalyst where CO and CO2 are reacted with hydrogen to form methane as shown below (see reference 7 in Figure 2-2).

CO + CO2 + 7H2 2CH4 + 3H2O + Heat.

The gas is then cooled and water removed prior to compression of this purified make up synthesis gas.

2.4.7 Ammonia Synthesis Loop The make up pure synthesis gas from the Methanation Converter and the recycle of unconverted syntheses gas is compressed in a large centrifugal compressor (see reference 8 in Figure 2-2).

From the compressor the gas is heated before passing through two Ammonia Converters in parallel over an iron magnetite catalyst, where the hydrogen and nitrogen is reacted to form ammonia (see reference 9 in Figure 2-2).

3 H2 + N2 <------> 2 NH3 - Heat

The ammonia is condensed through a refrigeration compressor, with the unreacted gas being separated in an ammonia separator and recycled back to the synthesis compressor (see reference 10 and 11 in Figure 2-2).

The ammonia is then exported directly to the Nitrates area, to the “technical” grade bottling facility, road tankers or to the 12,000 tonne atmospheric storage tank (see reference 12 in Figure 2-2).

2.4.8 Heat Recovery Heat recovery is directed towards raising steam which is used as the driving force for all major machinery in the plant, feed process requirements in the Reformer and for use in other plants onsite. The steam drives within the Ammonia Plant include the process air compressor, synthesis gas compressor, refrigeration compressor, reformer furnace induced and forced draft fans, CO2 scrubber solution pumps, boiler feed water pumps, cooling water pumps, natural gas compressor and cold ammonia product standby pump.

2.5 Nitric Acid Production The process for producing nitric acid is generally similar between the three existing NAPs. Figure 2-3 demonstrates the processes involved in nitric acid production. A description of the nitric acid production process is provided below with references to Figure 2-3.

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2.5.1 Feed Preparation Liquid ammonia from storage vessels is evaporated using water or steam and superheated to prevent any liquid carry-over. Gaseous ammonia is filtered to remove any contaminants before entering a static mixer used to produce a uniform ammonia-air mixture (see reference 1 in Figure 2-3), which is essential to maintaining good catalyst performance.

2.5.2 Ammonia Converter The ammonia-air mixture is reacted on either a cobalt oxide or platinum/rhodium alloy catalyst in an Ammonia Converter (see reference 2 in Figure 2-3) at a controlled temperature between 815 and 925oC. Nitric oxide and water are formed in this process according to the desired reaction:

4NH3 + 5O2 –––––> 4NO + 6H2O (1)

Simultaneously, nitrous oxide, nitrogen and water are also formed, in accordance with the following reactions. These are side reactions only and occur in relatively small quantities.

4NH3 + 3O2 –––––> 2N2 + 6H2O (2)

4NH3 + 4O2 –––––> 2N2O + 6H2O (3)

The cooling of the hot reaction gases produces steam which preheats the spent gas from the Absorption Column (tail gas). Nitric oxide (NO) in the hot reaction gases is then oxidised to nitrogen dioxide (NO2) as the combustion gases are cooled, according to the following equation:

2NO + O2 <——-> 2NO2 (4)

Once the maximum possible heat is extracted from the reaction gas, the water is removed from the gas stream by condensing it with cooling water forming a weak acid in the cooler condenser that is then pumped to the absorption column. The cooled gas stream is then directed to the Absorption Column.

2.5.3 Absorption Column In the Absorption Column (see reference 3 in Figure 2-3), additional air is required to complete reaction (4) and to have a sufficient surplus to drive the reactions to completion. The absorption of the nitrogen dioxide and its reaction to nitric acid and nitric oxide take place simultaneously in the gaseous and liquid phases according to equations (4) and (5). These reactions depend on pressure and temperature to a large extent and are favoured by higher pressure and lower temperature.

3NO2 + H2O <——-> 2HNO3 + NO (5)

Reaction (5) is exothermic and continuous cooling is required within the absorber. As the conversion of NO to NO2 is favoured by low temperature, this reaction occurs until the gases leave the Absorption Column. The nitric acid produced in the absorber contains dissolved nitrogen oxides which are physically stripped off and returned to the column by the use of bleaching air. After bleaching, the nitric acid, at a concentration between 55 and 65%, is pumped to the nitric acid storage tanks.

2.5.4 Tail Gas The heated tail gas is released to the atmosphere through a gas turbine for energy recovery. Technology is installed on each plant to reduce the NOx concentration of the tail gas prior to discharge.

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2.6 Ammonium Nitrate Production There are four essential steps to ammonium nitrate (AN) manufacture:

• neutralisation of nitric acid with ammonia to produce a concentrated solution of ammonium nitrate; • evaporation of water from the solution to give a suitably high concentration of solution for solidification; • prilling and drying or granulation producing ammonium nitrate in a solid form; and • screening, cooling and coating to give the commercial product. The basic steps involved in the production of ammonium nitrate from ammonia and nitric acid are similar for each of the AN products as shown in Figure 2-4. A description of the AN production process is provided below with references to Figure 2-4.

2.6.1 Neutralisation In the neutralisation process, ammonium nitrate solution (ANS) is produced by the instantaneous, exothermic reaction between nitric acid and gaseous ammonia in a well mixed reactor at a controlled temperature (see reference 1 in Figure 2-4).

The steam containing small amounts of unreacted ammonia passes from the reaction vessel to a scrubbing system where the residual ammonia is absorbed using a dilute solution of ammonium nitrate (see reference 2 in Figure 2-4). The steam leaving the scrubber is used to vaporise the ammonia and heat the nitric acid before they enter the reaction vessel. Any remaining steam is condensed. The condensed steam (condensate), which contains small amounts of AN, is currently reused within site processes or discharged to the site effluent system (see Section 12).

2.6.2 Evaporation The evaporation process involves pumping the ANS to a falling film evaporator which uses steam to evaporate some of the water in the solution and concentrate the ANS to around 95% w/w (see reference 3 in Figure 2-4). The concentrated ANS is then transferred from the Evaporator Tank to either the Prilling section in ANP1 or the Granulation section in ANP2.

2.6.3 Prilling and Drying Prilling is the formation of a rounded, granular solid by allowing molten droplets to fall through air. In ANP1 the prilling of AN involves spraying the concentrated solution into the top of the prill tower (see reference 4 in Figure 2-4). The descending droplets are cooled by an upward flow of air, solidifying into spherical prills that are collected at the bottom. The prills are then dried using dehumidified air in a series of rotary drums (see reference 6 in Figure 2-4).

2.6.4 Granulating In ANP2 the concentrated ANS is granulated in a rotating drum (see reference 5 in Figure 2-4) for the production of Opal™ or CPAN which consist of 2 to 4 mm diameter solids. The granules are subsequently cooled as described below.

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2.6.5 Screening, Cooling and Recycle The prills / granules are subsequently screened (see references 8 in Figure 2-4) to remove over and under-size material. The over and under-size material is then recycled through the process.

The AN Prills / granules are then cooled using a bulk flow cooler or fluidised bed cooler (see references 9 in Figure 2-4).

The cooled prills / granules are then coated with a coating agent in a Coating Drum to improve handling characteristics (see references 10 in Figure 2-4). CPAN is not coated in order that it remains chemically pure for its intended end use as a medical gas.

Following coating, the prills / granules are conveyed either to a Bulk Store or direct to bag or container filling. The prills from the Bulk Store are re-screened on vibrating screens to remove fines and lumps before loading into bags from 25kg up to 1.2 tonne, 20 tonne containers or bulk load out into trucks. The transport of the products is further discussed in Section 11.

2.7 Ammonium Nitrate Effluent Control The existing AN effluent control system has three mechanisms for managing liquids generated during plant operations:

• Maximise the recycling of AN solutions within the plant where safe to do so; • Reuse them offsite if suitable as a Weak AN Solution; or • Discharge of the liquid waste from site via the effluent system. AN solutions for recycling are collected within the plant where possible. Only solutions free of possible contamination are able to be recycled in this system.

The Weak AN Solution system collects weak AN streams (typically 20-25%) and processes them to produce a 35% solution which is sent to another facility off-site for reuse as a low-concentration AN solution product.

Low-concentration AN solution which cannot be recycled or reused are discharged either directly to the effluent system or to the Nitrates Effluent Pond.

The DECC has included a Pollution Reduction Programme on the site’s environment protection licence to reduce the quantity of nitrogen (primarily ammonia and nitrate) in effluent. The AN plant design is critical in minimising the contribution to nitrogen in effluent during normal operations, shut-down and start-up.

2.8 Material Despatch Bulk solid AN product is despatched from two loading points. One of these, at the south end of the Bulk Store, is used solely for the filling of road trucks. The other loading point, at the rail siding, can fill road trucks or rail containers mounted on flat top wagons.

Solid AN is also packaged into bags, ranging in capacity from 25 kg to 1.2 tonnes, and are despatched by road transport for the domestic market and by sea for export markets. Ammonium nitrate solution is despatched from a loading bay located opposite ANP2 using specially constructed road tankers and ISO containers.

Approximately 18,700 trucks are used to transport approximately 350 kilotonnes of products from the facility per year. Approximately 150 shipping containers are also used to export approximately 90 ktpa of product. Further details on the transport of product from the Facility are provided in Section 11.

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2.9 Storage The existing storage capacity for the various materials stored on-site is described below.

Ammonia: Current on-site storage of ammonia consists of a 12,000 tonne refrigerated tank and three pressurised bullets which have a total capacity of 120 tonnes.

Nitric Acid: Current NA storage consists of three bunded NA tanks with a total storage capacity of 3000 tonnes.

Solid Ammonium Nitrate: West of the two ammonium nitrate manufacturing plants, and connected by enclosed elevated conveyors, are two storage buildings for solid products. Prills and granules are transported to the Bulk Store which can hold up to 15,800 tonnes in segregated areas. They are recovered by front end loaders and despatched either in bulk or in bags. The bagged product store can hold up to 2,500 tonnes. In addition, there is storage for 4,500 tonnes of containerised ammonium nitrate.

Ammonium Nitrate Solution: ANS is continuously manufactured into a 375 tonne capacity insulated ammonium nitrate storage tank where it is maintained at 110ºC.

2.10 Stormwater Management The existing Nitrates section of the Facility is serviced by a first flush stormwater collection system which is designed to capture, as a minimum, the first 10mm of rainfall that falls on roofs and sealed surfaces in the catchments. This first flush water is then recovered and discharged to the site effluent system. The northern area of the site has been reviewed and a first flush stormwater collection system has not been required to be installed.

2.11 Operating Hours The existing plants operate on the basis of 24 hours (two shifts) per day, seven days per week and 52 weeks per year. Plant shutdowns are required for routine maintenance. Under this regime, the nitric acid plants operate for approximately 90% of the year with the off-line time utilised for maintenance. For AN production, ANP1 and ANP2 dry sections operate approximately 85% of the year. The Ammonia Plant operates approximately 95% of the year. In addition, significant plant maintenance periods are undertaken periodically to enable statutory inspections of pressure vessels and maintenance of significant equipment.

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G:\Jobs\S6\S60600_S60699\S60653\EA\S6065303 F2.1 23 03 2009 TO www.ensr.com.au

Ammonia Production Nitric Acid Production AN Wet Section Production AN Processing 295ktpa 345ktpa 500ktpa

NAP1 - 150ktpa ANP1 - Wet Section ANP1 - Prill

Nitropril 340ktpa

NAP2 - 90ktpa

Ammonia Plant ANP2 - Wet Section ANP2 - Granulator

NH Storage

HNO Storage

Opal 60ktpa NAP3 - 105ktpa ANS Storage AN Solution100 ktpa

Figure 2.1 Current Process Flow Chart Orica Australia Pty Ltd Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

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Natural Gas Hot Process Condensate

Desuplheriser Heater Saturator Tower Reactor

Recycled 1 Make-up Gas

Process Air

Secondary Reformer Primary Reformer Heater

3 2b

Methanation Heat Recovery Shift Converter Carbon Dioxide Removal Converter

4 5 6 7

Refrigeration Heat Recovery Synthesis Synthesis Compressor Converter

10 9 8

Ammonia Separation Recycle Synthesis Gas

12000t Storage tank

Liquid Ammonia 3 Pressurised Bullets

12 Nitrates area

8 As per Section 2.4 in Environmental Assessment Figure 2.2 Conceptual Flow Chart of Ammonia Production Orica Australia Pty Ltd Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

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Liquid NH3 NH3 Vaporiser NH3 Super Heater NH3 Vapor Filter

NH3 Air Mixer Ammonia Converter

1 2

Atmospheric Air Air Compressor

Absorber Feed Water

Process Gas Cooling Cooler Condensor Absorption Column Tail Gas Heating

Nitric 3

Acid Storage

Tail Gas Exhaust to NOX Abatement Expander Atmosphere

3 As per Section 2.5 in Environmental Assessment Figure 2.3 Conceptual Flow Chart of Nitric Acid Production Orica Australia Pty Ltd Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

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Process Condensor Condensate

AN Solution Storage

Process Steam Scrubber

2 60% Nitric Acid Nitric Acid Heater

Reactor

1 Liquid Ammonia Ammonia Vaporiser

Evaporator Prilling Drying Screen Cooling Coating NitroprilR Storage

3468910 To Recycle

TM Granulator Screen Cooling Coating OPAL /CPAN Storage

58910 To Recycle

8 As per Section 2.6 in Environmental Assessment Figure 2.4 Conceptual Flow Chart of Ammonium Nitrate Production Orica Australia Pty Ltd Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

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3.0 The Project

3.1 Project Objective The objective of the project is to increase the production of ammonium nitrate (AN) to help satisfy demand locally in the Hunter Valley, New South Wales and elsewhere within Australia and to supply export markets where Orica has supply contracts. The project is designed to increase capacity to a volume greater than that currently needed locally to allow for growth in demand. Initially in the first few years supply will exceed local demand, with production in excess of demand being exported.

The proposed development provides an opportunity to expand an existing successful operation that is consistent with other industrial activities in the area, and one that has the potential to contribute positively to the local, regional and State economies.

3.2 Project Need The global demand for mineral commodities such as coal, iron ore and other metalliferous products is growing significantly and is forecast to continue to do so over the next decade. Growing populations in developing regions and the industrialisation of China and India, in particular, is underpinning this global demand for minerals inputs. Growth in coal trade to support new electricity generation in these regions and the need for steel and metal products for building and infrastructure development has seen strong growth in mining activity in Australia and across the Asian region. Whilst the current global financial crisis has softened short term demand, long term growth is expected to remain steady. Major expansions of mining operations and infrastructure activity have been announced in Eastern Australia to support this long term growth. A major expansion of the Kooragang Island coal loading capacity is currently underway in Newcastle which will be utilised by future development in coal mining from the wider Hunter Valley region.

Orica is the world's leading provider of commercial blasting products and solutions to the mining industry. Orica's business is run globally with a presence in Australia, Asia, North America, Latin America, Europe, Middle East and Africa. The Hunter Region is a significant contributor to Orica's Mining Services business with some 450 employees in manufacturing, sales and marketing, operations, technical development and support.

Industrial grade AN is the main raw material used in the manufacture of commercial bulk explosives used by the mining, quarry and construction industries. Orica manufactures industrial grade AN, ammonia and nitric acid, at its Kooragang Island plant in Newcastle, NSW. Ammonium nitrate is distributed to bulk operations in the Hunter Valley and across South East Australia as well as export markets in Asia and the Pacific to support its global Mining Services business. In support of the increase in mining activity, there will be considerable growth in demand for explosives, including AN, across the Australian and Asian region.

The current demand forecast for AN in the region supplied from Kooragang Island shows considerable growth over the short to medium term driven by the following:

• The Hunter Valley coal market will expand with construction of additional infrastructure; • Export requirements for AN will similarly increase based on regional demand; • Proposed expansions at key mines in eastern Australia,

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• Opportunities to supply into other growing regions of Australia such as Queensland and northwest Western Australia; and. • Opportunities in other industrial markets. 3.3 Consideration of Alternatives Orica has considered a range of alternatives to the proposal including:

• Importing AN into Newcastle; • Increasing capacity at its facility in Gladstone, Queensland and transporting additional Hunter Valley market requirements from Queensland; • Building a new Orica facility elsewhere in the Hunter Valley; and • Increasing AN capacity at Kooragang Island. 3.3.1 Importing AN into Newcastle It was considered that importing AN into Newcastle over the long term by road/rail from Queensland and Western Australia and by ship from international locations would significantly increase the cost of AN owing to the large distances involved and consequent transport costs. Additionally, the transport related greenhouse gases per tonne of product would increase significantly. This option was not pursued for these reasons.

3.3.2 Expansion of Orica’s AN Plant in Gladstone, Queensland Orica owns and operates an AN Plant in Yarwun (Gladstone), Queensland. During 2006 Orica expanded the Yarwun plant by approximately 300,000 tonnes per annum. The Yarwun plant now has the capacity to produce 570,000 tonnes a year. The Yarwun plant is fully committed to supplying customers in Northern Australia and export markets and does not have the capability to supply additional volume to major growth needs in South East Australia. Such supply would also involve significant transport and logistics costs. Expanding at Kooragang Island is the preferred option given the close proximity of the existing facility to the market and raw materials.

3.3.3 Building a new Facility elsewhere in the Hunter Valley The construction and operation of a new AN Facility in the Hunter Valley would have required significant capital expenditure for the installation of infrastructure and new plant.

The AN Facility would utilise a number of resources with specific load and volume requirements, such as water, natural gas and electricity, which limited the viability of suitable site locations within the Hunter Valley. This option was not pursued due to the significant additional costs associated with this option.

3.3.4 Increasing AN capacity at Kooragang Island Of the alternatives considered, increasing capacity at Kooragang Island is the preferred option given the close proximity of the existing facility to the market and raw materials, the industrial nature of the area and the existing infrastructure already in place.

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3.4 Preliminary Site Layout The proposed preliminary site layout is graphically depicted in Figure 1-2. The proposed expansion would see the construction of new plant, cooling towers, boiler and associated storage facilities as well as some reconfiguration of existing plant, storages and site access points. The majority of the development would be in the central and southern section of the site. The proposed new AN Plant (ANP3) would be located in the southern section of the site. The proposed fourth Nitric Acid Plant (NAP4) is to be located to the west of the existing nitric acid plants. The additional cooling towers would be located adjacent to the proposed NAP4. The southern end of the site would also be further developed for AN bulk/package/container storage and associated handling and distribution. Two new access points will be constructed to enable smooth one-way traffic flow through the site. The location of the entrance point would be immediately south of the main administration area on Greenleaf Road. The location of the exit point would be at the southern end of the Orica facility on Heron Road. All dispatch trucks will enter and exit the site at these points.

3.5 Proposed Plant Expansion This section describes the upgrade to the existing Ammonia Plant, construction and operation of the proposed NAP4 and ANP3, additional storages for nitric acid, solid ammonium nitrate, ammonium nitrate solution, possible refurbishment of an existing pressurised ammonia storage vessel and some additional infrastructure such as cooling towers, effluent treatment system and boiler. The current and proposed future production capacities are shown in Table 3-1 below. The proposed process flow chart is shown in Figure 3-1.

Table 3-1: Current and future production capacities (ktpa) Plant Ammonia Product Nitric Acid Product Ammonium Nitrate (AN) Product Current Future Current Future Current Future Ammonia Plant 295 360 NAP1 150 150 NAP2 90 90 NAP3 105 105 NAP4 260 ANP1 270 340* (Nitropril®) (Nitropril®) ANP2 100 (ANS) 100(ANS) 60 (Opal™/ 60 (Opal™/ CPAN) CPAN) ANP3 300 (Nitropril® & ANS) Total (ktpa) 295 360 345 605 430 750** *Note: Projected Nitropril® capacity is 340ktpa. Current total AN capacity of Kooragang Island is 430 ktpa and is limited by nitric acid production capacity. Removing the nitric acid limitation, the AN capacity limit is considered to be 500ktpa. **Note: Future AN capacity will be limited by ammonia and nitric acid capacity

Note: The total volume of AN produced is not a derivative of the total sum of ammonia and nitric acid products.

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3.5.1 Modification of Existing Ammonia Plant It is proposed to expand the existing Ammonia Plant capacity from its current 295 ktpa to 360 ktpa. The existing Ammonia Plant is located close to the northern boundary of the site. The location of the Ammonia Plant can be seen in Figure 1-2. The following modifications are proposed in order to achieve the Ammonia Plant expansion:

• Additional reforming capacity through the installation of a Pre-Reformer. Reforming is an endothermic reaction, hence an additional stand-alone furnace would be installed. The furnace would be designed such that it would replace the existing preheater furnace in addition to servicing the new requirements. • Installation of a new large compressor powered by a steam turbine to replace an existing steam driven air compressor and an electric driven air compressor. This would reduce the electric power consumption of the plant by approximately 1.5 MW. • Minor machinery and vessel modifications (de-bottlenecking) to improve the efficiency and output of the plant. • The expansion would improve gas efficiency by approximately 4%. 3.5.2 Additional Nitric Acid Plant (NAP4) The proposed additional Nitric Acid Plant (NAP4) would produce approximately 260 ktpa of nitric acid, increasing the total capacity of the facility from approximately 345 ktpa to 605 ktpa. The NAP4 would produce nitric acid in a similar manner as described in Section 2.

The proposed NAP4 would be positioned in a central location to the west of the existing NAP3. This area of the site currently has minor infrastructure located on it, which would be relocated prior to the construction of the new plant. The footprint of the proposed NAP4 would be similar to that of the existing NAP2 and NAP3 combined. This can be seen in Figure 1-2.

The proposed NAP4 would be designed to the latest environmental standards, specifically associated with NOx and nitrous oxide (N2O) emission reductions. Orica is undergoing a selection process to select emission reduction technology that best suits Australian conditions. Orica aims to reduce its carbon footprint below the current level with the introduction of N2O emission control technology associated with the expansion project and existing plant. This is discussed further in Section 8.

3.5.3 Additional Ammonium Nitrate Plant (ANP3) A new ANP3 would be required to produce increased volumes of Ammonium Nitrate Solution (ANS) and Nitropril®. The proposed expansion and construction of the third Ammonium Nitrate Plant would enable the facility to increase the maximum capacity from 500 ktpa to 750 ktpa.

The location of the proposed new AN Plant (ANP3) is to the south of the existing ANP2. The area is currently vacant and has no existing infrastructure that necessitates removal prior to construction. This can be seen in Figure 1-2.

The proposed ANP3 would be designed to the latest environmental standards, specifically associated with the control of particulate emissions from the Prill Tower and solid handling systems.

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3.6 Infrastructure 3.6.1 Cooling Towers New cooling towers would be required to supply cooling water to NAP4 and ANP3. The proposed cooling towers would be located to the north of the proposed NAP4. This can be seen in Figure 1-2.

Certain proprietary water treatment chemicals would be mixed into the cooling tower in accordance with standard industrial practice. These may include corrosion inhibitors, stabilisers, oxidising biocides, bio- dispersants and neutralisation chemicals. The cooling water treatment would be similar to existing site practices.

3.6.2 Boiler for Steam Generation A new natural gas fired packaged boiler would be installed to supply the start up steam requirements for the NAP4 and ANP3. The proposed new NAP4 will also be a steam generator, with the steam to be utilised for the operational requirements of ANP3. It is anticipated that the steam system supporting NAP4 and ANP3 will be integrated into the existing site system to improve site energy efficiency. It is anticipated that the new steam boiler will either be located adjacent to NAP4 or the existing boilers.

In accordance with industry practice proprietary water treatment chemicals will be added to the boiler feedwater to maintain system operations.

3.6.3 Ammonium Nitrate Effluent Management The ANP3 will be designed to ensure that waste streams containing ammonium nitrate are managed in accordance with the systems described in Section 2 and Section 12. This will include the incorporation of systems within ANP3 to maximise the recycling of ammonium nitrate within the process, expansion of the systems for the collection and management of Weak AN Solution, process design to minimise the AN concentration in process condensate and disposal of residual liquid to the effluent system.

3.6.4 Other Infrastructure Requirements Various other infrastructure would be required as part of the facility expansion. This includes:

• Integration of the steam condensate recovery systems from NAP4 and ANP3; • General upgrade of site roads and services, including new site entrances and new weighbridges (see Section 11); • Instrument Air compressors; • Electrical infrastructure; • Extension to Demineralised Water Plant; • Extension of fire water infrastructure; • Extension of potable water infrastructure; • Extension of effluent infrastructure; • Extension to stormwater systems; and • Extension of ammonia supply infrastructure.

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3.7 Product Storage 3.7.1 Pressurised Ammonia Storage The expansion project will include improvements to the integration of the ammonia storage and distribution system to the plants, enabling the site to operate more efficiently and also reduce the current level of pressurised ammonia storage. The expansion will see a net reduction in the operational inventory of pressurised ammonia. This may involve some rationalisation and replacement of some existing pressurised ammonia storage and piping.

3.7.2 Nitric Acid Storage Additional intermediate storage of nitric acid would be provided to service the Ammonium Nitrate Plant. Additional storage of 2,000 tonnes would be required (2 x 1,000 tonnes). The storage capacity would be sufficient to allow the Ammonium Nitrate Plant to operate normally should the Nitric Acid Plant experience a temporary disruption to its production rate or to reduce production gradually if Nitric Acid Plant production stops due to an incident or failure.

The nitric acid storage tank area would have its own bund and sump to ensure containment in case of an incident. The design would be identical to the existing storage area. Discharge from the nitric acid plant bunded areas would be treated in a common treatment facility to enable capture and neutralisation of the stream before release to the effluent system. The tank venting system will be scrubbed in the existing system to remove NOx.

The location of the additional nitric acid storage facility is directly north of the existing NAP3. This can be seen in Figure 1-2.

3.7.3 Solid Ammonium Nitrate Storage The storage inventory capacities for bulk and bagged AN are not planned to increase above current levels. However it is planned to build an additional storage shed for bulk AN and/or modify the existing AN bulk storage building. It is also planned to increase the size of the bagged product shed. The changes to AN storage are to enable improved segregation and handling of the products, thus improving despatch efficiencies and minimising the risk associated with the storage of large quantities of ammonium nitrate.

The additional AN storage facilities would be centrally located at the southern end of the site. This can be seen in Figure 1-2.

3.7.4 Ammonium Nitrate Solution Storage Current site storage for ANS is 375 tonnes. Additional storage of approximately 1,000 tonnes would be required for the plant expansion. This is anticipated to be 2 x 500 tonne tanks.

The location of the additional ANS storage would be adjacent to the existing ANS storage tank to the east of ANP2. This can be seen in Figure 1-2.

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3.8 Product Dispatch 3.8.1 Loading Facilities As part of the plant expansion, an important infrastructure development would be to improve the product loading facilities on site. This would include:

• Provision of new loading facilities for Ammonium Nitrate Solution (ANS); • New bulk AN dispatch for road transport; • A new bulk AN loading facility for shipping containers; and • Modifications and improvements to enable the resumption of product dispatch by rail. This can be seen in Figure 1-2.

3.8.2 Road Transport All AN product destined for the Australian market is currently dispatched via road tankers and trucks. It is expected that the number of trucks would increase from the current 133 trucks inbound and outbound per week day to approximately 196 trucks once the production of the facility has normalised after the expansion construction phase. The movement of trucks is further discussed in Section 11.

There are current investigations into the resumption of rail for the dispatch of AN (see below). This would result in a significant decrease in the number of trucks commuting to the site, however, a worst case scenario has been considered in this EA, assuming that all material would be carried on road based vehicles.

3.8.3 Rail Transport Rail infrastructure exists on the western side of the site, which in the past has been used for product dispatch from the Orica facility. Whilst currently no product is transported by rail from the site, the facility has the ability to transport by rail, requiring only some minor track repair work. Orica is currently investigating the resumption of rail for transporting materials and it is planned to resume product dispatch of bulk AN for the domestic market by rail in the future. It is envisaged that a proportion of additional product produced as part of this expansion would be dispatched by rail where economically feasible. This would likely be to interstate customers or customers adjacent to rail networks.

3.8.4 Cargo Shipping Deep sea shipping will continue in the long term at approximately the same cycle and in the same manner that is currently used, however there will be some short term increase in shipping to export product surplus to local demand.

Both Nitropril® and Opal™ are shipped in containerised bulk form and also as a bagged product onto cargo ships. It is not anticipated that the long term demand for Opal™ would increase beyond the 60,000 tpa currently produced and exported. However, it is anticipated that in the early years of the plant operation there will be an increase in shipping as surplus Nitropril® is exported. As local demand increases in the long term, cargo ships would be generally used in the future in a comparative way to the present.

The regular export of some ammonia by ship will significantly reduce once the nitrates plants are commissioned as the new nitrates plants will consume the excess ammonia, however it is expected that some shipping of ammonia will continue in order to manage supply-demand imbalances associated with plant operation. There would also be some increase in shipping between the timing of the Ammonia Plant expansion completion and that of the additional nitrates plants completion.

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3.9 Site Access As shown in Figure 1-2, two new access points are planned to be provided for the site to enable smooth one-way traffic flow through the site for dispatch vehicles. The location of the entrance point would be immediately south of the main administration area on Greenleaf Road. The location of the exit point would be at the southern end of the Orica facility on Heron Road. The detailed design of these access points will be in accordance with relevant Council and RTA guidelines. The access points will enable more efficient control and movement of trucks onto and off the site. Electronic security gates will control the access of vehicles to the site.

3.10 Facility Operational Hours The facility would continue to operate on the basis of 24 hours (two shifts) per day, seven days per week and 52 weeks per year.

3.11 Personnel The proposed expansion is expected to provide employment for up to 20 additional ongoing operational personnel. In addition, it is estimated that up to 50 additional contractors could be required after the construction phase is complete to provide services such as maintenance for the new plants.

3.12 Security The site holds a licence for the manufacture of Security Sensitive Ammonium Nitrate in accordance with the NSW Explosives Regulation 2005. A requirement of the licence is that a Security Plan, which has been reviewed by WorkCover, be in place detailing the security measures that are implemented at the site.

The site has a Security Plan which details the measures undertaken to ensure the security of the facility including restricted access to site through the provision of perimeter fencing, access controls, security guarding and patrols and closed circuit television observation of the site. All personnel receive information on the requirements associated with Security Sensitive Ammonium Nitrate in the site induction and personnel who have unrestricted access to ammonium nitrate are required to hold the appropriate Unsupervised Handling Licence. In addition, all storage areas are secured when personnel are not present.

The Security Plan for the site will be updated to incorporate the new plant and storage areas and the design of these systems will be reviewed to ensure that appropriate security arrangements are incorporated into the new facilities.

Prior to the commencement of construction Orica will update the Security Plan to incorporate the controls that will be implemented to control the construction workforce and activities. Most construction areas will be isolated or fenced off from existing operational areas where possible to limit access to unauthorised areas.

3.13 Resource Requirements / Interfaces The plant expansion would see an increase in demand for natural gas, water and a slight reduction in the demand for electricity. The proposed expansion does not require new utility infrastructure connections into the site. Resource implications are discussed in detail in Section 13.

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3.13.1 Natural Gas As natural gas is the feedstock used to produce ammonia there would be a significant increase in the demand for natural gas. Natural gas consumption from the Ammonia Plant is estimated to increase by 20% from the existing operation. With an operational uptime of approximately 95%, the total natural gas consumption from the Ammonia Plant is planned to increase from approximately 11 PJ per annum to 13 PJ per annum.

In addition, a natural gas supply line for the burners of the boiler and N2O reduction system in NAP4 will be integrated into the existing natural gas supply system.

Through the installation of new plant and equipment as part of the expansion project, Orica intends to improve the gas efficiency in the Ammonia Plant by 4%. This planned efficiency saving is incorporated into the above projections of natural gas consumption.

3.13.2 Water The proposed development is likely to increase the demand for water, as currently supplied by Hunter Water Corporation (HWC). The additional demand for water would come from the proposed NAP4 and ANP3 Cooling Towers, Ammonia Plant Cooling Tower and the Demineralised Water Plant. The estimated increase in demand for potable water will increase by approximately 50% of current demand levels. This would result in a projected water demand of 15 ML/day.

HWC is investigating opportunities to supply facilities on Kooragang Island with recycled water to reduce reliance on potable water. Orica is actively involved in discussions with HWC regarding this opportunity. Additionally, Orica will also review the site’s capabilities to re-use process water within the site’s operations and infrastructure.

3.13.3 Electricity The proposed development would lead to either a similar or potential decrease in the use of electricity obtained from the main grid. The primary reasons for this are; an electric-driven process air compressor in the Ammonia Plant will be replaced with a steam turbine driven compressor; and a generator is expected to be included on the NAP4 compressor train. It is anticipated that these changes will see a modest reduction in the facilities electricity consumption of up to 8%, despite the commencement of operations of the new plants.

3.13.4 Hazard Management The risks associated with the operation of the new plants are discussed at length in Section 10. Much of the risk associated with the Orica facility centres around the storage and handling of hazardous materials. Ammonium nitrate and ammonia are both Schedule 1 hazardous materials and are the significant contributors to the risk profile of the site. Due the quantities of these materials stored, the site is classified as a Major Hazard Facility (MHF) under NSW Occupational Health and Safety legislation.

A preliminary hazard analysis has been undertaken which focuses on the storage and handling of these materials and engineering and management controls to ensure that the operational risks associated with the facility are not increased. An objective of the expansion project has been to ensure that there is an overall reduction in the risk profile for the site. A discussion regarding hazard management can be found in Section 10.

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3.14 Stormwater Management The existing internal storm water collection system serving the Orica facility would be extended to service the newly developed site areas. The design philosophy for the management of stormwater in the new plants and other infrastructure will include:

• Where possible plant areas will be rooved to prevent rainwater contact with plant areas; • Stormwater from areas which could be contaminated by contact with process materials will be directed to the existing site effluent system; and • Stormwater from clean areas of the facility, such as roads, hardstand areas and rooftops will be directed to the existing stormwater drains or, where appropriate, diverted to bioinfiltration, swales and infiltration basins for treatment and disposal. The Nitrates facility is currently serviced by three first flush tanks, which are used to collect the first 10mm of rain falling on the sealed surface in this area, including roads and roofs. With the addition of new plant additional first flush capacity will be installed, where required, to enable collection of the first 10mm of rainwater. This first flush water will then be recovered and discharged to the site effluent system.

More information regarding stormwater management can be found in Section 12.

3.15 Proposed Construction Activities 3.15.1 Program of Works General construction works are due to commence as soon as all relevant approvals are obtained. Once the approvals have been obtained the proposed sequence of works is outlined below in Table 3-2.

Table 3-2: Proposed Schedule of Construction Works Time Period Works Milestone Commencement Commence general Civil Works and set up construction facilities +5 months Complete foundations +7 months Commence structural steelwork +10 months Commence mechanical erection +16 months Commence electrical and instrument work +19 months Delivery of large equipment to site +25 months Complete construction +28 months Complete commissioning

The Ammonia Plant modification work will be completed as part of the periodic Ammonia Plant maintenance period for statutory inspection and major maintenance, which occurs every 5 years and is next scheduled for 2011.

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Over the course of the project, additional facilities would be provided on site to accommodate the construction workforce. These would include:

• Additional car parks; • Additional amenities; • Additional offices and crib huts; • Construction lay down areas; and • Temporary welding workshop area. Where possible, these facilities would be located within the Orica boundaries however additional space may be leased adjacent to the main site for the housing of construction facilities.

Access to and from the construction site may be via the existing entrances on Greenleaf Road and Heron Road. An alternative option for a construction lay down area is being considered and Orica is in discussion with Newcastle Port Corporation regarding the use of additional lands for this temporary construction related purpose. In this instance a temporary access, with additional security, would be provided at the southern end of the site on Greenleaf Road.

3.15.2 Outline of Construction Methods It is expected that the whole range of normal construction work would be undertaken during the construction phase of the plant expansion project. This includes:

• Civil excavation; • Foundation piling; • Concrete work; • Welding, cutting, grinding; and • Mechanical lifting including cranes, trucks and mobile platforms. 3.15.3 Construction Management All construction activities would be covered by a Construction Safety and Environmental Management Plan (CSEMP). This is a document written specifically for this project in conjunction with the main construction contractors. The CSEMP would incorporate the requirements of Orica’s Safety, Health and Environment Management System, legal requirements and the Contractor’s Company Policies and Procedures in relation to safety and environmental management.

The entire construction workforce would be fully inducted to work on the Kooragang Island site and receive training on their role in the implementation of the CSEMP. The site emergency procedures would be upgraded to cope with the additional temporary workforce.

Specifically designed mitigation measures would be undertaken during the construction phase. For example, the construction activities would be carried out with dust suppression measures being applied in order to minimise the potential for emission of airborne dust. Additionally erosion and sediment controls to minimise the potential for discharge of soil from the site during rain events would be implemented. The extent of the disturbed surface area would be kept to a minimum as would be the duration of the disturbance. The requirements will be incorporated into the CSEMP.

Environmental management measures to be implemented during the construction of this project are outlined in Section 18.

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3.15.4 Construction Hours It would be expected that construction would require a 56hr minimum working week, which would normally be Monday – Saturday, 7-00 am to 5-00 pm.

Activities that could result in elevated noise levels in the community would be scheduled during daylight hours where possible. The community would also be notified of these events as per Orica’s community consultation activities and protocols (Section 5).

3.15.5 Peak Construction Workforce The construction workforce numbers would vary across the course of the project with the peak construction workforce expected to be 250 personnel. Expected construction workforce figures across the construction schedule are:

• Year 1 50 – 100 people; • Year 2 150 – 200 people; and • Year 3 250 people. 3.15.6 Construction Traffic In addition to the traffic generated by the construction workforce, there would be equipment deliveries, concrete, steel and other suppliers. Some of these deliveries would require oversized deliveries to site over the duration of the construction. There could be up to 30 special deliveries including;

• Nitric Acid Compressor (20m x 4m); • Ammonia Plant Compressor (12m x 3m); • Nitric Acid Absorption Column (45m x 4m dia); • Ammonium Nitrate Scrubbers (10m x 5m dia); • Ammonium Nitrate Hoppers (10m x 5m dia); • Miscellaneous Pressure Vessels (10m x 4m dia); • Steam Boiler (10m x 5m); and • Prill Tower (45m x 5m). Construction traffic movements are discussed further in Section 11.

3.16 Raw Material Delivery The main raw material / feedstock in the production of AN at the Kooragang Island facility is natural gas. This is delivered via underground natural gas delivery infrastructure. As such, ongoing deliveries of raw materials to the Orica site once fully operational would continue to be limited. Traffic movements primarily relate to product dispatch and the commuting to and from work of Orica and other associated personnel. This is discussed further in Section 11.

3.17 Decommissioning The construction of the new NAP4 and ANP3 and the expansion of the existing Ammonia Plant is seen to extend the life of the plant as a whole. It would be considered a conservative estimate that the typical plant life of the NAP4 and ANP3 would be 20 years at a minimum.

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G:\Jobs\S6\S60600_S60699\S60653\EA\S6065303 F3.1 09 04 2009 TO

Ammonia Production Nitric Acid Production AN Wet Section Production AN Processing 360ktpa 605ktpa 500ktpa

NAP1 - 150ktpa ANP1 - Wet Section ANP1 - Prill

Nitropril 340ktpa

NAP2 - 90ktpa

Uprated Ammonia Plant ANP2 - Wet Section ANP2 - Granulator

NH Storage

HNO Storage

Opal 60ktpa NAP3 - 105ktpa ANS Storage ANS Storage AN Solution250 ktpa

NAP4 - 260ktpa ANP3 Wet Section ANP3 - Prill

Nitropril 300ktpa

Proposed Plant Figure 3.1 Proposed Process Flow Chart Orica Australia Pty Ltd Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

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4.0 Statutory Planning

4.1 Introduction This section explains the approvals framework for the proposed development, identifying how the development meets statutory planning and environmental criteria and discusses any licensing requirements for the development.

4.2 Environmental Planning & Assessment Act 1979 The EP&A Act and the EP&A Regulation provide the framework for environmental planning in NSW and include provisions to ensure that proposals which have the potential to impact the environment are subject to detailed assessment, and provide opportunity for public involvement.

The proposed project has been declared a major project under Part 3A of the EP&A Act, with the Minister for Planning the approval authority (see Appendix B for Clause 8 Opinion).

4.2.1 State Planning Matters Under the provisions of the EP&A Act there are a number of State Environmental Planning Policies (SEPPs) that are relevant to the proposal. These are discussed below:

State Environmental Planning Policy (Major Projects) 2005

State Environmental Planning Policy (Major Projects) 2005 (SEPP 2005) identifies developments that are considered to be Major Projects under Part 3A of the EP&A Act 1979. The primary aim of SEPP 2005 is:

To identify development of economic, social or environmental significance to the State or regions of the State so as to provide a consistent and comprehensive assessment and decision making process for that development.

The Minister for Planning has declared the proposal to be a major project under Part 3A of the EP&A Act as it meets the criteria of a Major Project listed under Schedule 1 and Schedule 2 of SEPP 2005, specifically:

Group 3, (10) (Chemical, manufacturing and related industries) of Schedule 1 includes:

The majority of the intended market for the ammonium nitrate is for the mining sector where it would be made into explosives, although some sales may be made into the agricultural market. The predicted capital cost of the project is expected to be approximately $500 million.

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The project has also been declared under Schedule 2 of the SEPP (Major Projects) given its location within the Coastal Protection Zone:

1 Coastal areas

(1) Development within the coastal zone for any of the following purposes:

… chemical industries or works.

The proposal occurs within the coastal area as a chemical industry which is consistent with the above definition.

State Environmental Planning Policy (Infrastructure) 2007

Schedule 3 of this SEPP provides the Roads and Traffic Authority (RTA) with the opportunity to provide feedback on certain traffic-generating developments before a consent authority makes a determination about a development application.

Schedule 3 lists types of development to which this policy applies, including “industry” with a site size of 20,000 m2 with access to any road, or of 5,000 m2 ”with access to classified road or to road that connects to classified road (if access within 90m of connection, measured along alignment of connecting road)”.

Consultation has occurred with the RTA and Newcastle City Council (NCC) during the preparation of this EA. The response and issues highlighted during that consultation are discussed in Section 5.

State Environmental Planning Policy 33 - Hazardous and Offensive Development

SEPP 33 was designed to ensure that sufficient information is provided to consent authorities to determine whether a development is hazardous or offensive. Conditions can then be imposed on the development to reduce or minimise adverse impacts. Any development application for a potentially hazardous development must be supported by a Preliminary Hazard Analysis (PHA). The results of the PHA are discussed in Section 10 and the detailed report is available in Appendix H.

The assessment compared the risks associated with the expansion against the criteria contained within NSW DoP HIPAP 4 Risk Criteria for Land Use Safety Planning (DoP, 1992/2002). The assessment found that the risks associated with the proposed new plant and equipment complied with all risk criteria for individual fatality, injury, irritation and societal risk contained within HIPAP 4. It also found that the risks associated with the Project (comprising all site operations after completion of the proposal) satisfied the HIPAP 4 risk criteria for intensification of hazardous activities on an existing site.

The facility meets the National Occupational Health and Safety Commission (NOHSC) Standard requirements to be classified as a Major Hazard Facility (MHF) by virtue of the storage capacity of both ammonia and ammonium nitrate. These are different criteria to the definition of hazardous and offensive industries as discussed in SEPP 33. As the proposed development will be part of a MHF, it would be subject to planned NSW MHF Legislation under the Occupational Health and Safety Act (WorkCover).

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State Environmental Planning Policy 55 - Remediation of Land

Existing contaminated land on the site is the subject of a Voluntary Remediation Agreement (VRA) with the DECC. Refer to Section 14 for more discussion on the existing contamination on the site.

The proposed expansion is not expected to disturb or increase existing contaminated areas located on site and no remediation is required as part of the expansion. Therefore SEPP 55 does not apply to the project.

State Environmental Planning Policy 71 – Coastal Protection

The proposed development is located within the coastal zone as defined by SEPP 71 which makes provisions regarding protection of coastal attributes, protection of natural and cultural heritage elements, coastal environmental protection, and the retention of foreshore public access. Part 8 of the SEPP provides matters for consideration to be taken into account by a consent authority when determining an application to carry out development:

It is considered that the proposal complies with the SEPP 71 as:

• There is no direct foreshore access from the site and the development does not impede upon any foreshore access. • The proposed use is compatible with the industrial nature of the locality. • There will be no significant detrimental impact on views to and from the foreshore. • The scenic qualities of the coast in the proposed location have already been diminished and is characterised by industrial buildings and port-related activities. • There is very limited vegetation cover on the site with minimal identified habitat value. Environmental impacts to the site and surrounding waters will be minimal and controlled through site management plans. • Existing coastal processes will not be impeded by the proposal, nor is it considered that those processes will impact on the site development. • The proposed development is not expected to impact upon existing water borne activities. • It is unlikely that there will be any disturbance to relics, heritage items or places of cultural significance. There are no known heritage items on the site. • Water quality impacts will be minimised through the proposed site drainage design and the implementation of a Water Management Plan. • The cumulative effects of the development and surrounding industrial activities have been considered as part of the attached preliminary hazard analysis and are considered to be minimal. • Energy and water efficiency measures are proposed for the development.

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4.2.2 Local Planning Matters Newcastle Local Environmental Plan 2003

The site is located within the Newcastle Local Government Area, and is subject to the provisions of the Newcastle Local Environmental Plan, 2003 (LEP 2003). The development is proposed within the 4(b) Port and Industry Zone.

The proposed development is defined as industry under the provisions of clause 37 of LEP 2003. Industry is permissible with consent within the 4(b) zone. A ‘hazardous industry’ and ‘offensive industry ‘ is prohibited within the zone. The definition for this type of activity is prescribed under State Environmental Planning Policy 33 (see Section 10 of this report).

The proposed expansion of the Ammonium Nitrate Facility meets the objectives of 4(b) zone as detailed in the following Table 4-1.

Table 4-1: Zone Objectives Objective Response (a) To accommodate port, industrial, maritime Proposed development for the expansion of the industrial, and bulk storage activities which by Ammonium Nitrate Facility, due to its nature, their nature or the scale of their operations require scale, and transport needs, is preferably separation from residential areas and other separated from residential areas sensitive land uses.

(c) To facilitate sustainable development through The proposed development will enable an the application of industrial ecology increased service to mining industries within the region. The project will increase the efficiency of processes at the Orica site, thus improving the sustainability of the operation

(d) To provide for other development which will Complements existing port related and industrial not significantly detract from the operation of large activities in the locality scale industries or port-related activities, that is primarily intended to provide services to persons employed in such industries and activities

Other matters of relevance within LEP 2003 include:

• Clause 25 - Acid Sulphate Soils - identifies the location of “Potential Acid Sulphate Soils’ (PASS) and the nature of works requiring consideration of these soils in the development process • Under the current mapping, the proposal is to be located on a site that is classed as a Category 2 PASS, which requires consent considerations for any works below the ground surface or any works where the water table is likely to be lowered. Section 14 of this report considers the likely implications of PASS. The category and significance of the PASS to the proposed development will be taken into consideration within the design and construction phase to minimise the actual or potential impact to the environment arising from disturbance of the soil.

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• Clause 31 - Development affecting places or sites of Aboriginal heritage significance and Clause 32 - Development affecting archaeological sites or relics of non- Aboriginal heritage significance – requires the consent authority to consider the likely impact of the proposal on a place or item of Aboriginal or non-Aboriginal heritage significance. • In accordance with an archaeological review undertaken for the site and as discussed in Section 16 of this report there are no known items of Aboriginal Heritage or non Aboriginal Heritage significance that will be affected by this development. Newcastle Development Control Plan 2005

The relevant planning controls within the Newcastle Development Control Plan 2005 (DCP 2005) as they apply to the proposed development are outlined in the following Table 4-2:

• Element 7.1 Industrial development; and • Element 7.4 Kooragang Port & Industrial area. The proposal is considered to be consistent with the provisions of the DCP as discussed in the table below.

Table 4-2: DCP Provisions Element Controls Response 4.1 Car Parking 1 space per 100m2 Gross Floor Compliant Area or 1 space per 2 There is a total Office/workshop floor area of employees 2 (whichever is the greater) approximately 3000m (excluding tank storage and operational plant areas), which would require around 30 car parking spaces. There are currently approximately 150 employees and 100 contract personnel at the site. The proposed expansion will provide approximately 20 full-time equivalent jobs. Due to the shiftwork nature of operations at the site the typical number of personnel requiring parking during the daytime is expected to be 260. There are approximately 150 parking spaces onsite and in excess of 50 additional roadside parking spaces in the vicinity of the site. The parking provision is therefore compliant with the development control.

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Element Controls Response 4.2 Contaminated To reduce risk associated with Compliant Land Management the potential for, or existing, contaminated land. Due to historical contamination issues the Orica Kooragang Island site is the subject of a Site Investigations may be Voluntary Remediation Agreement with DECC. required. The areas of identified contamination are not associated with areas outlined for the proposed expansion and therefore, remediation of these areas is not subject to this Project Approval.

The construction and operation of the proposed expansion would prepare and implement a number of management measures to minimise risk of potential impacts. As a result of the findings in this EA, the proposed expansion is not expected to create adverse environmental impacts. Therefore, the proposed activities would not result in additional contamination of the proposal site. 4.4 Landscaping To incorporate landscaping as a Partially Compliant critical element to a development proposal. The Options to provide additional landscaping at the controls indicate that particular site will be considered during the design phase. development activities, visually This will include the minimisation of impact on prominent sites and existing plantings and where possible, the development adjacent to open addition of new plantings. The extent of the space requires landscape landscaping will be affected by the requirement planning. to comply with the site Security Plan. There is no critical habitat on the site. The proposed development is categorized as a ‘Category 3’ development, requiring more detailed landscape considerations. 4.5 Water Provides controls on drainage Compliant management and stormwater management and aims to reduce pollutants The expansion would result in the additional from entering waterways and stormwater quantity being incorporated into the encourage the efficient use of existing stormwater site management systems. water. Stormwater would be monitored for particulates Requires a comprehensive and chemical content (particularly nitrogen). Water Cycle Management Plan. The existing site Water Management Systems would be updated to incorporate the changes in water management as a result of the proposed expansion. Refer to Section 12 for more discussion on water management.

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Element Controls Response 4.6 Waste Controls to ensure minimisation Compliant Management and management of waste. The proposed development will generate limited production waste as discussed in Section 16. Construction waste and putrescible waste (from office/workshop) will be managed in accordance with the NSW Waste Avoidance and Resource Recovery Act 2001 and existing site management systems. 4.10 Tree Controls to consider the value Compliant Management and retention of trees and to Some minor shrubs near the proposed site include designs to encourage entrances would be removed as part of the retention or enable proposal. compensatory replacement of trees. 7.1 Industrial Controls to ensure compatibility Compliant Development of industrial development with The proposed development is compatible with other industrial activities and the the industrial nature of the zone and surrounding suitability of the site for industrial activities and is compliant with the industrial land-use. controls (see Section 4) 7.4 Kooragang Port Makes special provisions for Compliant and Industrial Area development on Kooragang industrial area to ensure facilitation of port–related development in the area and to ensure compatibility with surrounding uses and the environment. Specific provisions are provided for the following:

Strategic context – port related The proposed expansion of the Ammonium activity. Nitrate Facility is a port related activity, requiring product to be shipped by sea. Therefore it is strategically appropriate for the location. Industrial ecology - beneficial The proposed development will enable an interactive relationships which increased service to mining industries of the optimise energy and resource region. use while minimising pollution The project will increase the efficiency of and waste. processes at the Orica site, thus improving the sustainability of the operation. Water quality – minimise impact A water management plan will be implemented to quality of water on Kooragang for the proposal that will negate any potential Island and the Hunter River. impact on water quality, as discussed in Section 12. Bunding and stormwater management are proposed throughout the site.

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Element Controls Response Air quality. Emissions and odour potential from the proposed development is minimal and would be reduced through the utilisation of modern technology. Modelling studies undertaken for air pollutants have shown that there will be no exceedence of criteria (Section 7). Greenhouse gas emissions were also considered and are discussed in Section 8 of the report. It is concluded that there is no significant contribution to climate change as a result of the proposal Buildings, structures and site The proposed works are consistent with the layout. existing industrial landscape. Landscaping, habitat Options to provide additional landscaping at the conservation and open space. site will be considered during the design phase. This will include the minimisation of impact on existing plantings and where possible, the addition of new plantings. The extent of the landscaping will be affected by the requirement to comply with the site Security Plan. There is no critical habitat on the site. Access and Parking. Appropriate driveway, circulation, loading and parking provisions are incorporated into the proposed development. Noise and vibration. The Orica site is currently subject to a Pollution Reduction Program (PRP) which is aimed at reducing noise generation at the Facility. The expanded Facility will be designed to minimise noise generation as detailed in Section 9. Risk Assessment and Bulk The proposal is compliant with the Dangerous Liquid Storage hazard Goods (Roads and Rail Transport) Act, 2008. A minimisation Preliminary Hazard Analysis has been undertaken for the site (see Section 10) which demonstrates hazard and risk reduction. Pipelines Only internal pipe work is proposed for the development. Pipelines will be installed in a manner to reduce risk and ensure access and circulation of transport. Fire Fighting Appropriate fire fighting equipment is proposed for installation at the site. Fire monitoring, maintenance, testing and emergency plans will be updated for the new plant and equipment.

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Element Controls Response Lighting All lighting will be installed and maintained in accordance with appropriate standards. The proposed facility would be in operation 24 hours per day. The description of the lighting and the impacts are assessed in the visual assessment in Section 15 of this report. Lighting is consistent with the industrial nature of the locality. Security and employee safety will be the main criteria for lighting. Fencing. The site is currently secure with a two metre high perimeter chain wire fence. No new fencing is proposed. Utility Services All required services are available to the site as indicated in Section 13 and have sufficient capacity to supply the facility. Compliance Audits Audit protocols and programs, including monitoring would be incorporated into the existing site management systems.

4.2.3 Regional Planning Matters The Hunter Regional Environmental Plan, 1989

Part 7 (Division 1) of the Hunter Regional Environmental Plan (REP) applies to the proposal. The objective of this Part is to control development such that air, noise and water pollution are minimised. As the potential environmental impacts of the proposed project are considered unlikely to significantly increase local pollution as discussed in Section 7, 9 and 12 of this report, the proposal is considered to be consistent with the relevant objectives and principles of the Hunter REP.

Part 7 (Division 4) applies to the proposal, as it concerns the erection of a building greater than 14 metres in height. The objectives of this Part are to ensure proposed developments with heights greater than 14 metres are available for public comment and are assessed for their local impact and regional significance. The development proposes a number of structures greater than 14 metres, the most significant being the Nitric Acid Plant Stack, the Nitric Acid Absorption Column, the Ammonium Nitrate Prill Tower (approximately 55m), the Ammonium Nitrate Prill Tower Scrubbers and the Ammonia Scrubber Vent Stack (maximum height 55 metres). Refer Section 15 for more detail. The proposal will be available for public comment and the development is consistent with the height of surrounding industrial structures, including adjacent stacks and columns and will have limited local impact.

The proposed development is consistent with the objectives of the Hunter REP.

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Lower Hunter Regional Strategy

The NSW Government in 2006 produced the Lower Hunter Regional Strategy (LHRS) to ensure the region is adequately and appropriately developed for predicted population growth and regional needs over a 25 year period. The LHRS covers five Local Government Areas (LGA’s) including Newcastle, Lake Macquarie, Port Stephens, Maitland and Cessnock.

The Key features of the LHRS are:

• To provide 115,000 new homes; • To plan for 66,000 new jobs; • To promote growth in Centres; • To create green corridors of land with high environmental value; and • To protect high quality agricultural land and natural resources. The proposal is consistent with the LHRS as it will provide opportunity for economic growth and employment benefits to the Region as well as the provision of services for future growth of the region in mining activities.

4.3 Protection of the Environment Operations Act (POEO) 1997 The NSW Protection of the Environment Operations Act, 1997 (POEO Act) prohibits any person from causing pollution of waters or air, and provides penalties for pollution offences including those relating to water, air, waste and noise.

The POEO Act provides a regulatory framework for the licensing of all activities listed in Schedule 1 of the Act that have the potential to impact on the environment.

The site has an existing Environment Protection Licence (EPL) and the proposed expansion would also be subject to an EPL under Schedule 1 according to the following criteria:

8 Chemical production

‘ammonium nitrate production, meaning the commercial production of, or research into, ammonium nitrate for any purpose, including fertilisers or explosives.

9 Chemical storage

chemical storage waste generation, meaning chemical substances storage that involves having on site any prescribed waste (that is, hazardous waste, restricted solid waste or liquid waste, or any combination of them).

general chemicals storage, meaning the storage or packaging of chemical substances (other than petroleum or petroleum products) in containers, bulk storage facilities or stockpiles.

Section 45 of the POEO Act identifies matters to be taken into consideration in licensing functions. All practical measures will be taken to reduce or mitigate any potential environmental impacts from the proposed development, as outlined in this EA.

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4.4 Roads Act 1993 Any works on or over a public road or connection to a public road require consent from the appropriate roads authority under section 138 of the NSW Roads Act 1993. The proposed project involves the connection of new site entrances on Greenleaf and Heron Roads, which are private roads and not subject to the Roads Act. The entrances to the site would be constructed to a standard to accommodate truck turning movements, including B-Doubles. It should be noted that the existing traffic routes for dispatch are on approved B-Double routes.

4.5 Commonwealth Matters Actions that may significantly affect matters of National Environmental Significance (NES) require approval from the Commonwealth under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act). The EASR (ENSR, 2008) for this development proposal determined that there was no significant impact on matters of NES and as such there is no approval required under the EPBC Act.

4.6 Approvals Summary There are two approvals required for the proposed project, being:

• Project approval under section 75J of the EP&A Act; and • EPL under the POEO Act.

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5.0 Consultation

Orica is committed to a comprehensive programme of consultation with stakeholders in relation to the proposed expansion project. Stakeholders include the local community, non-government organisations and State and Local government agencies. The consultation programme aims to provide stakeholders with information on the project and an opportunity to provide feedback to Orica on issues of concern or interest. A summary of the consultation programme undertaken to date and the continuing commitment to consultation is detailed in the sections below.

5.1 Formal Procedures for Consultation 5.1.1 NSW Formal Procedures This EA has been prepared in accordance with Part 3A of the EP&A Act and its Regulation. Part 3A of the EP&A Act ensures that the potential environmental effects of a proposal are properly assessed and considered in the decision making process.

In preparing this EA, the Director General’s Environmental Assessment Requirement (EAR) has been addressed as required by Clause 75F of the EP&A Act. The key matters raised by the Director General for consideration in the EA are outlined in Table 5-1 below, together with the relevant section of the EA which addresses that matter. A full copy of the Director General’s EARs for the proposal is provided in Appendix A.

Table 5-1: Director General's Environmental Assessment Requirements Key Issues Reference in EA Hazards • Include a Preliminary Hazard Analysis (PHA) of the project Section 10 including the combined existing and proposed operations and a detailed assessment of the potential off-site risks; and • Include details of the receipt, transfer and storage of chemicals on site such as ammonia and ammonium nitrate. Air Quality and Odour • Include an assessment of all air pollutants from all sources Section 7 and Section 8 during construction and operation and from road, rail and sea transport, including any potential volatile organic compounds, particulates, odour, NOx, N2O and NH3;

• Include details of all control measures including NOx and N2O abatement and start-up venting controls for NOx and NH3 for the Nitric Acid Plant; and • Include cumulative impacts of the proposal in relation to existing and approved developments in the area. Noise Including construction, operational and on-site and off-site road, rail and Section 9 sea transportation noise Soil and Water • An assessment of the potential soil, groundwater and surface Section 12 (Surface water impacts including impacts on Newcastle Harbour; water and Stormwater)

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Key Issues Reference in EA • Water supply including options for reuse of process water; Section 14 (Groundwater and Soils) and Section • Proposed erosion and sediment controls (during construction) 13 (Resource implications and the proposed stormwater management system (during and Interfaces) operation);

• An assessment of contaminated groundwater and soils, and acid sulphate soils, and proposed mitigation and management Section 16 (Climate measures; and Change) • Potential impacts of flooding, with consideration of climate change and projected sea level rises. Greenhouse Gas Including a quantitative analysis of the Scope 1 and 2 greenhouse gas Section 8 emissions of the project and a qualitative analysis of the impacts of these emissions; details of measures to improve energy efficiency Transport Including details of all transport types and impacts on the safety and Section 11 capacity of the local road network in particular Cormorant Road roundabout and Tourle Street Bridge; details of the site access, internal roads and car parking Waste Including classification of all potential sources of liquid and non-liquid Section 16 wastes, quantities, storage and treatment and disposal or re-use Visual Impacts on nearest sensitive receivers Section 15 Flora and Fauna Including impacts on critical habitats, threatened species or populations or Section 16 ecological communities and their habitats in the region Heritage Including Aboriginal and non-Aboriginal Section 16 Consultation During the preparation of the Environmental Assessment, consultation Section 5 should be undertaken with the relevant local, State or Commonwealth government authorities, service providers, community groups or affected landowners. In particular, consult with the: • Department of Environment and Climate Change; • Department of Water and Energy; • Roads and Traffic Authority; • Newcastle Ports Corporation (if shipping is being used); and • Newcastle City Council.

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5.2 Consultation with Stakeholders and Other Relevant Authorities Orica is in the process of undertaking consultation with key local and state Government agencies as specified in the EARs during the preliminary design phase and preparation of this EA. The purpose of this consultation is to provide to an overview of the project and to clarify methods of assessment for the EA. In this regard, face to face meetings, where possible, have been and continue to be held with relevant statutory agencies identified in the EARs to assist with the preparation of the EA. Table 5-2 below summarises the responses received during consultation with agencies, together with the relevant section of the EA which addresses the matter. Table 5-2: Stakeholder Consultation Agency Matters for Consideration Reference in the EA Department Air Quality Section 7 of • Air Environment and Climate - Face to face meeting was held with the DECC to Change discuss the air modelling undertaken for the EA (DECC) • Odour - Face to face meeting was held with DECC to discuss the unit of measurement of the odour assessment. ENSR proposed to substitute ammonia for odour units as ammonia is the primary component for odour. - DECC agreed with this approach for the Air Quality Impact Assessment within the EA.

Noise Emissions Section 9 • Meetings held with the DECC to discuss the outcomes of the EA noise modelling. Flora and Fauna Section 16 • Face to face meeting was held with DECC on site to discuss the methodology of the flora and fauna assessment. Due to the highly disturbed nature of the site and that it is an existing heavy industrial site, ENSR’s proposed approach was to conduct a desktop assessment to identify environmental safeguards for construction and operation of the proposed expansion. DECC agreed with this approach for the EA. Aboriginal and Cultural Heritage Section 16 • Face to face meeting was held with DECC on site to discuss the methodology of the Indigenous Heritage assessment. Due to the highly disturbed nature of the site (through historical land reclamation) and that it is an existing heavy industrial site; ENSR’s proposed approach was to conduct a desktop assessment to identify environmental safeguards for construction and operation of the proposed expansion. DECC agreed with this approach for the EA.

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Agency Matters for Consideration Reference in the EA Department Hazard and Risk Section 10 of Planning • Face to face meetings and correspondence with the NSW (DoP) - Major Department of Planning Major Hazards Unit (MHU) have Hazards Unit occurred to confirm the Director General’s requirements and the methodology, content and outcomes of the Preliminary Hazard Analysis (PHA). During the development of the PHA the MHU was consulted to confirm the methodology and they provided guidance on the issues that need to be considered. • The MHU group stated that there was an expectation that the expansion project would result in an improvement in the site’s risk profile, and certainly no increase in the risk profile. • Face to face meeting to discuss the outcomes of the PHA modelling and a site visit by the MHU Newcastle • A face to face meeting with NCC was held to brief council Section 4 City Council officers on the project. Issues discussed included traffic and 14 (NCC) management, security, hazard and risk, greenhouse gas assessment and water resources • A face to face meeting was held with NCC Planning Department to discuss possible council contributions. Newcastle A meeting was held with NPC to discuss the project and Section 3 Port opportunities for the utilisation of land to the east of the site for a Corporation construction laydown area. (NPC) Department Face to face meetings were held with the Department of Planning to Section 9 of Planning discuss aspects of the EA. These meetings were held to confirm the and 10 results of discussions with other government agencies, such as DECC and MHU, regarding assessment requirements and outcomes, specifically, noise and hazard and risk. Hunter Water Meetings have been held with HWC regarding the proposed Section 3 Corporation increase in water requirements. Orica and HWC have also and 13 (HWC) discussed opportunities to supply the Facility with recycled water in the future to reduce the reliance on potable water. Roads and Traffic Correspondence was held with RTA regarding the B-Double routes Section 11 Authority on Kooragang Island and the status of Tourle Street Bridge. (RTA)

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5.3 Community and Neighbouring Industries Consultation Orica takes its responsibilities as a corporate citizen seriously and is committed to open communication with all stakeholders. Orica intends to continue community consultation activities to inform the local community and neighbouring industries of the project. Further consultation with the broader community will be undertaken following the release of the Environmental Assessment.

The Consultation Plan has been developed to ensure that the community and other stakeholders in the project are informed of the project and have the opportunity to comment on the proposal. The overall objective has been to ensure ongoing effective, open, two-way communication with the community at all times by listening, recording and responding to issues as they arise.

The key community group involved in this communication with Orica is the Kooragang Island Community Reference Group (KICRG).

5.3.1 Kooragang Island Community Reference Group Orica meets with the local community, through the KICRG, on a bi-annual basis to enable exchange of information. The KICRG was established in 2005 to strengthen the relationship between the plant and the local community. The reference group provides a forum for ongoing communication between Orica operations and their nearest neighbours. The KICRG was briefed on the project at the March 2008 meeting and a more detailed presentation was provided at the September 2008 meeting where members were invited to provide comment on any issues of concern in relation to the proposed development. The September KICRG meeting presentation provided the following information: • Project briefing; • Project status and statutory process; • Environmental Assessment Issues to provide opportunity for discussion on each issue; • Consultation Plan to provide opportunity for discussion; • Orica’s partnership agreement/commitment; and • Opportunity for general feedback and group discussion, including a ‘Have Your Say Form’ (Appendix D). The KICRG Minutes for the 2008 meetings are provided at Appendix D. One “Have Your Say Form” was received from a member of the group, with the issues of special interest being the impact of traffic increases on delays across the Tourle St Bridge and also the potential for emergencies at the site that could affect the community. An additional meeting of the KCIRG was held in November 2008 which included a tour of the site to inspect the locations of the new plants. Preliminary findings of the Environmental Assessment were presented to the group for discussion. Table 5-3 provides a summary of meeting notes incorporating the issues raised in the September and November KICRG.

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Table 5-3: Summary of Meeting Notes from the Kooragang Island Community Reference Group Meetings Key Issues Raised Notes Reference in EA Combination of all developments on KI identified as Cumulative impact Section 16 an issue Air Quality Particulate emissions; visual amenity of emissions Section 7 Concerns about increased GHG emissions from Greenhouse gas emissions Section 8 industry in general Concerns regarding increased congestion on Traffic Section 11 Tourle St Bridge Noise Noise impacts from existing plant Section 9 Ensure no contamination of groundwater from Groundwater Section 14 proposed activities Transport and traffic Address impact on traffic in close proximity to site Section 11 Concern regarding impact of air quality (visual Visual amenity Section 15 smoke/fumes) on general amenity of area. Suggestions regarding community consultation included presenting to community forums to reach Consultation residents in Carrington and Mayfield and advertise Section 5 in The Messenger, Newcastle Post and The Newcastle Herald newspapers

5.3.2 Neighbouring Industries Neighbouring industries were invited to a briefing on the proposed expansion project on 5 December 2008 to obtain feedback on any potential issues or concerns. Two neighbouring industries attended the briefing session. A summary of comments are provided at Table 5-4.

Table 5-4: Neighbouring Industries Issues Raised Reference in EA Access to the rail network for shipment of product could be an issue Section 3 due to the increased demand from coal transport. Access to the Kooragang Island Wharves for the export of product Section 3 should be investigated given the current high demand for these berths.

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5.3.3 Community Consultation During the development of the Environmental Assessment, Orica has followed a consultation process and continues to be engaged with the community through a range of activities, as described in Sections 5.3.1 and 5.3.2. In addition, Orica has established an expansion project webpage on the Orica Kooragang Island website (www.oricaki.com.au) and an 1800 number to enable interested stakeholders to obtain information on the project and register to receive project updates and other information. A Factsheet summarising the project has also been prepared and is available via the website.

Other community consultation activities that will be ongoing during the remainder of the Environmental Approvals process include:

• Additional meeting with the KICRG to discuss the findings of the EA.

• Information Session(s) with interested community members and attended by technical specialists who will provide information regarding the assessment methodology and results. It is intended that these information sessions will be held during the public exhibition of the EA in both the Stockton and Carrington area. A letter will be sent to all residents in Stockton, Fern Bay and Carrington advising them of the project, how to obtain additional information on the project and the dates of the Information Session(s).

• Various groups representing the community at Stockton, Mayfield, Warabrook and Carrington will also be contacted to provide them with information on the project and the timing of the Community Information Session(s).

• Advertisement of the publication of the Environmental Assessment in local newspapers such as the Stockton Messenger, Newcastle Post and The Newcastle Herald.

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6.0 Prioritisation of Issues

6.1 Summary of Issues Identified A preliminary assessment of environmental issues associated with the project was undertaken for the Environmental Assessment Scoping Report (EASR) prepared in respect of the project. Key environmental issues reviewed in the EASR included:

• Air Quality; • Hazard and Risk; • Effluent Management (including stormwater, effluent, cooling water, firewater etc); • Noise; • Water Quality; • Geology and Soils; • Resource Implications; • Traffic and Transport; • Flora and Fauna; • Social and Economic; • Heritage; • Land Use; and • Visual. 6.2 Prioritisation of Issues 6.2.1 Approach The prioritisation of issues for the proposed project was carried out by ENSR in consultation with Orica. The prioritisation was based on the need to recognise that a higher degree of assessment is required for the issues with the highest potential severity and greatest potential consequences.

Table 6-1 shows the issues prioritisation matrix used to identify priorities. Each issue was given a ranking between one and three for the severity of effects and the perceived consequences of those effects if left unmanaged. These two numbers were added together to provide a numerical ranking for the issue that was used to categorise each issue into high, medium and low priorities.

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Table 6-1: Issues Prioritisation Matrix

Consequence of Unmanaged Effects Severity of Effects 3 High 2 Medium 1 Low

4 3 2 1 Low (Medium) (Low) (Low)

5 4 3 2 Medium (High) (Medium) (Low) 6 5 4 3 High (High) (High) (Medium)

6.2.2 Assessment The prioritisation of environmental issues related to the proposed project is shown in Table 6-2. The assessment aimed to allow the prioritisation of issues for assessment and did not consider the application of mitigation measures to manage environmental effects. This process allowed the prioritisation of key issues to be addressed in this EA. Those with a higher level of potential risk were identified for a more detailed level of assessment to support the development of project specific mitigation and management measures.

The allocation of risk is based upon the following considerations:

Severity of Risk

Low: localised implications; imperceptible or short term cumulative impacts.

Medium: regional implications; modest or medium term cumulation of impacts.

High: inter-regional implications: serious or long term cumulation of impacts.

Consequences of Unmanaged Effects

Low: minor environmental change; offsets readily available.

Medium: moderate adverse environmental change; offsets available.

High: important adverse environmental change, offsets not readily available.

Table 6-2: Prioritisation of Environmental Issues Issue Severity Consequence Priority Aspect: Air Quality Air emissions 3 3 6 (High) Odour 1 1 2 (Low) Emissions of greenhouse gases 3 3 6 (High) Construction related impacts on air 1 2 3 (Low) quality

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Issue Severity Consequence Priority Aspect: Hazard and Risk Exposure of surrounding land 2 2 4 (Medium) uses/population to hazards and risks Exposure of employees to hazards and 2 2 4 (Medium) risks Aspect: Noise and Vibration Potential noise impacts 2 3 5 (High) Aspect: Water Quality Stormwater management 1 1 2 (Low) Firewater availability and on-site storage 1 1 2 (Low) Water management (cooling water and 2 2 4 (Medium) effluent) Aspect: Geology and Soils Erosion and sedimentation during 1 1 2 (Low) construction Spread of contaminants off-site during 1 2 3 (Low) construction/operation Exposure of Acid Sulphate Soils during 1 1 2 (Low) construction Aspect: Flora and Fauna Loss of habitat due to clearing 1 1 2 (Low) Impact upon threatened species 1 1 2 (Low) Aspect: Resource Implications Demand upon resources (water, gas and 2 2 4 (Medium) electricity) Aspect: Traffic and Transport Increase in traffic on local road network 2 2 4 (Medium) Aspect: Social and Economic Impacts upon amenity such as noise, 2 1 3 (Low) visual, etc Impacts upon demand for community 2 1 3 (Low) resources Job creation 1 1 2 (Low) Aspect: Heritage Damage or removal of Aboriginal 1 1 2 (Low) artefacts or places Detrimental impact upon items of non- 1 1 2 (Low) indigenous heritage significance

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Issue Severity Consequence Priority Aspect: Land Use Inappropriate use of land 1 1 2 (Low) Incompatibility of land use with 1 1 2 (Low) surrounding environment Aspect: Visual Impacts of development on visual 1 1 2 (Low) landscape

Table 6-3 identifies that the prioritisation of environmental issues, and therefore the focus of assessment for the proposed project should be as follows:

Table 6-3: Prioritisation of Issues Low Medium High Air Quality - Odour (Section 7) Hazard and Risk (Section 10) Air Quality – Air Emissions Air Quality during construction Resource implications (Section 7) (Section 7) (Section 13) Air Quality - Greenhouse Gas Water Quality - Stormwater Traffic and Transport Emissions (Section 8) Management (Section 12) (Section 11) Noise and Vibration Water Quality - Firewater Water Quality (Section 12) (Section 9) Management (Section 12) Geology and Soils (Section 14) Flora and Fauna (Section 16) Social and Economic (Section 19) Land Use (Section 19) Heritage (Section 16) Visual (Section 15)

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7.0 Air Quality

7.1 Introduction The Orica facility is located on Kooragang Island, approximately 3 km north of the Newcastle central business district. The site is bounded by the Hunter River and is essentially flat.

The area surrounding the Orica facility is characterised by a mixture of port-related activities, industrial uses, residential and commercial areas. Neighbouring industry includes Port Waratah Coal Services, Incitec Pivot Ltd, Cargill and BOC Gases. The nearest residential area is located at Stockton with the closest receptors approximately 800m east of the Orica property boundary. There are also residential properties 1.5 km southwest at Carrington and 2 km west at Mayfield.

A detailed Air Quality Impact Assessment is available in Appendix E.

7.2 Existing Air Quality Air quality in Newcastle is dominated by motor vehicle emissions and major industry located around the port area. Industry likely to contribute to the existing air quality (along with the Orica facility) include Tomago Aluminium smelter at Tomago (to the north of Kooragang Island), Onesteel (to the south west of Kooragang Island), Koppers Coal Tar facility (to the west in Mayfield) with dust emissions possible from the coal and grain terminals on the harbour and odour from seed processing on Kooragang Island (Cargill).

The air pollutants of prime concern in NSW are summarised in Table 7.1 of the Approved Methods for Modelling and Assessment of Air Pollutants in New South Wales (DEC 2005), with levels of these pollutants on occasion approaching or exceeding the national standards prescribed in the National Environment Protection Measure for Ambient Air Quality (NEPC, 2003). Air emission levels in Newcastle, however, are generally acceptable, with few exceedances noted (NSW State of the Environment 2006, DEC 2006).

In order to provide a thorough assessment of cumulative impacts, the modelling included regional background air emission data from Orica’s ambient air monitoring stations. TSP and PM10 monitoring is undertaken at a station located in Fullerton Street, Stockton, whilst NO2 monitoring is undertaken at a station in Roxburgh Street, Stockton, with the stations located approximately 700m and 800m south east of the site respectively.

Background PM10, TSP and NO2 concentrations were compiled from data collected at the Stockton monitoring stations for the years 2006 - 2008. This data represents the closest monitoring station data available and is considered indicative of current background concentrations for the area and is consistent with the meteorological year selected for the study. A summary of the key statistics of the last three years for the parameters monitored at the monitoring site is shown in Table 7-1.

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Table 7-1: Summary Data of Ambient Air Monitoring Station 3 3 3 TSP (µg/m ) PM10 (µg/m ) NOx (µg/m ) Year 24 Hour Annual 1 Hour Annual Annual Average Maximum Average Maximum Average 2006 43 37 18 46* 8 2007 25 18 11 71* 15 2008 17 16 8 64* 16 Criteria 90 50 30 246 62 *99th percentile concentrations – refer Appendix E

Further examination of the PM10 data was performed following an examination of data trends above in an effort to determine the expected contribution of Kooragang Island (and by inference Orica) on Stockton ambient air monitoring station PM10 concentrations. The ultimate aim of this analysis was to determine the expected background PM10 concentrations at Stockton without Orica’s contribution. Using the detailed ambient air monitoring data, it was calculated that the maximum 24 hour PM10 background concentration without the influence of activities on Kooragang Island was 25.3 μg/m3 (i.e. 68.5% of the maximum PM10 measured at the Stockton Ambient Air monitoring station). Refer Appendix E for more detail.

7.3 Dispersion Modelling Methodology The dispersion modelling tool chosen for this assessment was Ausplume. Ausplume was selected for use following a detailed assessment of model results compared to actual monitored results from the Stockton ambient air quality monitoring station. The selection of Ausplume was discussed and agreed with DECC. Appendix E includes a detailed discussion of the model selection process.

Ausplume requires six main categories of data to determine the dispersion of air emissions:

• Meteorology; • Terrain effects; • Building wake effects; • Modelling scenarios; • Source characteristics; and • Emissions inventory. The above inputs are addressed separately in the following sections. Ausplume modelling input files are contained in Appendix E.

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7.3.1 Meteorology Meteorology in the area surrounding Kooragang Island is affected by several factors such as terrain and land use. Wind speed and direction are largely affected by topography at the small scale, while factors such as synoptic scale winds (which are modified by sea breezes near the Newcastle coast in the daytime) and complex valley drainage flows that develop during night hours, affect wind speed and direction on the larger scale.

Meteorological data used in this study consisted of 12 months worth of hourly averaged meteorological data collected in 1995 and processed by Holmes Air Sciences (HAS, 1995). The reason this data has been used over more recent data is that it has been used on a number of impact assessments in the Newcastle Harbour and has been previously accepted by the DECC. A more detailed discussion on the choice of meteorological data can be found in Appendix E.

7.3.2 Terrain Effects Katabatic drainage flow (or valley drainage flow) occurs under light winds and stable meteorological conditions. As air cools at night, it tends to fall and move down-hill in areas of significant topographic relief. As this air moves it tends to create a bulk movement of air, which can cause winds to blow in areas influenced strongly by topography.

Due to the low relative relief in the region surrounding the proposed Orica site, no significant katabatic drainage flows are expected. The regional climatic patterns, which are governed by the coastal meteorological conditions, are likely to dominate the wind patterns in the Newcastle Harbour area. Hence terrain effects were not incorporated into the Ausplume model.

7.3.3 Building Wake Effects The dispersion around the Orica facility is likely to be affected by aerodynamic wakes generated by winds having to flow around the existing buildings and plant equipment. Building wakes generally decrease the distance downwind at which the stack plumes come into contact with the ground. This may result in higher air emission Ground Level Concentrations (GLC) closer to the emission source.

Aerodynamic wakes were estimated for all sources outlined in the source characteristics section below and buildings affected (as defined by the DECC guidelines) were entered into the Building Profile Input Program (BPIP) utility option within Ausplume. The BPIP processing information is included in Appendix E.

7.3.4 Modelling Scenarios The following three modelling scenarios were examined to determine the likely air quality impacts resulting from the proposed expansion:

• Scenario 1 (Existing facility only) – This scenario was developed to allow the assessment of the model performance. Actual emissions from the various sources for NOX were used to enable model validation. Only NOX emissions were considered as there is a good understanding of the emissions characteristics and good ambient monitoring data availability. • Scenario 2 (Existing Facility at Maximum Allowable emission rates) – This scenario was developed to assess the impacts of the current operation under a worst case scenario. Normal emissions from the plant would be significantly lower than these emission rates; and

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• Scenario 3 (Existing and proposed facility at Maximum Allowable emission rates) – This scenario was developed to assess all existing and future sources that are emitting pollutants under a worst case scenario. Normal emissions from the plant would be significantly lower than these emission rates. All modelling scenarios outlined above assumed the plants were operating at full capacity, running continuously (24 hours per day, 365 days per year). The facility is unlikely to operate at this level due to operational restrictions (such as breakdowns and routine maintenance) with the normal operation time for all existing and new plants being slightly less than 100%. Therefore, the scenarios represent worst- case conditions for the facility’s operation, and are likely to overestimate the actual long term impacts experienced by receptors surrounding the facility.

7.3.5 Source Characteristics Air pollutants from this facility are expected to be emitted from a number of stack sources, and one volume source (Prill Tower). A summary of the source characteristics can be found in Appendix E.

7.3.6 Emissions Inventory Source emissions were based on either specifications supplied to ENSR by Orica or Stack Testing conducted by ENSR for the period 2003 to 2007 (HLA, 2004 – 2005; ENSR, 2008b).

Odour has not been explicitly studied in this investigation as the only odorous air emission potentially emitted by Orica is ammonia (NH3). On this basis, NH3 has been used as a surrogate for odour in this assessment. This approach has been discussed with the DECC who were in agreement with this adopted methodology. Fugitive emissions only occur during upset events and are considered the Preliminary Hazard Analysis, they were not modelled by this assessment.

Sulphur emissions to air from the Orica facility occur as a result of combustion of natural gas in boilers and as fuel to the Ammonia Plant Reformer. Sulphur present in the Ammonia Plant natural gas feed is all absorbed onto a solid absorbent media and periodically recovered for recycling, thus there are no air emissions from this source.

The sulphur compounds emitted to air will be at very low concentrations (due to the low concentration of sulphur in the natural gas), and all will be in the form of sulphur dioxide (SO2). Due to the low concentration of SO2 generated by the combustion of natural gas, SO2 has not been included in the pollutants of potential concern investigated by this impact assessment.

A summary of ENSR’s stack testing report data and a complete emissions inventory of the Orica facility (including sources not modelled due to their expected negligible impact on air quality) is shown in Appendix E. The emission rates for the PM10 (particulate matter less than 10 μm in aerodynamic equivalent diameter) total suspended particulate (TSP), oxides of nitrogen (NOx) and NH3 currently measured at the facility are summarised in Table 7-2.

The primary existing source types shown in Table 7-2 and their respective facility’s activities is as follows:

• Reformer Flue Stack (A8G) – Ammonia Plant; • Boiler Stack (BS1) – Nitrates Plant Area; • Acid Plant Stack (1NA1) – NAP1; • Acid Plant Stack (2NA1) – NAP2; • Acid Plant Stack (3NA1) – NAP3; • CDC Evaporator Scrubber Stack (1AN5) – ANP1;

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• Prill Tower (1AN6) – ANP1; • Pre-Dryer Scrubber Stack (1AN9) – ANP1; • Granulator Scrubber Stack (1AN4) – ANP2; • RBLO Scrubber (ND1) – Road Bulk Load Out Facility at Bulk Store; and • Bagging Scrubber (ND2) – Bagging Facility The primary proposed source types shown in Table 7-2 and their respective facility’s activities are as follows:

• Reformer Flue Stack (A8G2) – existing stack in Ammonia Plant; • New Pre-Reformer Furnace (PRF) – Modification to Ammonia Plant; • Nitric Acid Plant Stack (NAP4) – NAP4; • ANP3 Final Scrubber Stack (E3) – ANP3; and • Boiler Stack (E5) – new Boiler in Nitrates Plant Area. Table 7-2: Emission Concentrations and Rates – Scenarios 2 and 3 Emission Emission Licence Air Source Type Rate Conc. Limit Emission (g/s) (mg/Nm3) (mg/Nm3)

Existing

NOx 14.2 313 350 Reformer Flue Stack (A8G) NH3 0.73 16.0 N/A

Boiler Stack (BS1) NOx 0.18 671 1000

Acid Plant Stack (1NA1) NOx 9.31 559* Emission concentrations Acid Plant Stack (2NA1) NO 4.31 431* x modelled at

Acid Plant Stack (3NA1) NOx 4.23 381* license limit TSP 0.33 19.0 250 CDC Evaporator Scrubber Stack PM 0.20 11.8 N/A (1AN5) 10

NH3 0.21 12.0 N/A TSP 9.98 96.7 N/A

Prill Tower (1AN6) PM10 1.78 17.2 N/A

NH3 1.14 11.0 N/A TSP 0.14 16.1 250 Pre-Dryer Scrubber Stack (1AN9) PM10 0.05 5.7 N/A TSP 0.50 20.7 250

Granulator Scrubber Stack (1AN4) PM10 0.34 14.3 N/A

NH3 0.69 29.0 N/A TSP 0.0106 5.0 N/A RBLO Scrubber (ND1) PM10 0.0101 4.75 N/A

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Emission Emission Licence Air Source Type Rate Conc. Limit Emission (g/s) (mg/Nm3) (mg/Nm3) TSP 0.0106 5.0 N/A Scrubber (ND2) PM10 0.0101 4.75 N/A Proposed

NOx 10.86 234 N/A Reformer Flue Stack (A8G2) NH3 0.74 16.0 N/A

New Pre-Reformer Furnace (PRF) NOx 1.24 234 N/A

Nitric Acid Plant Stack (NAP4) (E1) NOx 7.61 286 N/A TSP 0.80 20.0 N/A ANP3 Final Scrubber Stack (E3) PM10 0.32 8.0 N/A

Boiler Stack (E5) NOx 1.95 234 N/A

3 N/A no license limit applicable. * converted from licence limit values in ppm to mg/m using measured NO:NOX ratios

It needs to be noted that the proposed sources will need to be added to Orica’s EPL and the pollutant load limit modified to reflect the changed emission characteristics of the facility.

7.4 Sensitive Receptors The Ausplume modelling domain incorporates a 5 km by 5 km grid with a resolution was 0.1 km, centred over the Orica facility. Within this gridded modelling domain, discrete sensitive receptors were modelled in addition to the gridded receptors placed over the entire modelling domain. The DECC considers sensitive receptors to be areas where people are likely to either live or work, or engage in recreational activities (DEC, 2005). On this basis, representative sensitive receptors were positioned at 40 locations surrounding the Orica facility. The locations are graphically displayed on each air pollutant isopleth (refer Figure 7-1 to Figure 7-4).

7.5 Assessment Criteria Table 7-3 presents the GLC assessment criteria specified in the Approved Methods for the Modelling and Assessment of Air Pollutants in New South Wales (DEC, 2005). These criteria apply to 100th percentile GLC's of air pollutants from a facility when combined with existing background air emission concentrations (defined as cumulative concentrations). In addition, GLC’s have been examined in isolation from the background to assess the contribution of the Orica facility to the surrounding airshed.

Table 7-3: Relevant Air Quality Impact Assessment Criteria Air Emission Averaging Period Regulatory Limit (μg/m3) 1 hour 246 NOx (as Nitrogen Dioxide (NO2)) Annual 62 TSP Annual 90 24 hours 50 PM10 Annual 30

NH3 1 hour 330

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7.6 Results Modelling results for this assessment are shown graphically in Figure 7-1 to Figure 7-4 for the predicted GLC isopleths of each modelled air pollutant from the Orica facility. These are

• Figure 7-1 Scenario 2 and 3 Nitrogen Dioxide 1Hr. Ave. GLC Isopleths (Isolation) • Figure 7-2 Scenario 2 and 3 Nitrogen Dioxide 1Hr. Ave. GLC Isopleths (Cumulative)

• Figure 7-3 Scenario 2 and 3 PM10 24Hr. Ave. GLC Isopleths (Isolation)

• Figure 7-4 Scenario 2 and 3 PM10 24Hr. Ave. GLC Isopleths (Cumulative)

NH3 and TSP plots were not included as the predicted concentrations for these pollutants were too low to warrant their plotting for further analysis in this summary chapter.

Scenario 1 was modelled for comparative purposes only and hence Scenario 1 isopleths have not been graphically included in this summary chapter. Refer to Appendix E for all isopleth plots and tabulated results for each modelled air pollutant at each selected sensitive receptor. A discussion of results is included in Section 7.7.

7.7 Impact Assessment

7.7.1 NOx (as NO2)

NOX emissions represent the largest pollutant emission load emitted from the Orica facility. Hence the assessment of the NOX emissions needed to ensure it was conservative. The following factors have therefore been built into the modelling:

• NO to NO2 Conversion. It was assumed that 100% of all emitted NO is converted to NO2 immediately upon emission from the stack. In reality it takes some time for the NO to react in the ambient environment and convert completely to NO2. The NO to NO2 ratio at the monitoring site at Stockton was recorded to be 0.37 between 2006 and 2008, indicating that there is some NO in the environment not converted to NO2, of which some proportion is likely to be due to Orica. This indicates that the 100% assumption may result in an overestimation of up to a potential one third higher than is being observed in reality.

• Double Counting of Background NO2. As Orica has been operating on Kooragang Island throughout the entire period of time for which there is monitoring data, it stands to reason that Orica would be contributing NOX to the airshed which is monitored at Stockton (especially given Orica is the closest significant NOX emitter to the Stockton site). The degree of double counting is unknown as a detailed study looking at periods of Orica shutdown has not occurred. However it would be expected that removing Orica’s contribution to background would have a significant affect on the cumulative modelling results. • Emission Concentrations. It has been assumed that the emission concentration of NOX is constantly set at its maximum permissible emission rate, with the exception of the boiler which assumes actual emission rates. This assumption is a significant overestimation, with average emission rates typically much lower than this. For example, the average NOX emissions from NAP3 (the most recently added NAP) was determined to be 69 mg/m3 whereas the model has used a figure of 380mg/m3. The aim of adding all of these overlapping levels of conservativeness is to investigate whether the facility could ensure compliance with the ambient air quality goals even when operating at the maximum discharge levels.

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Results of the dispersion modelling for scenarios 2 and 3 of NO2 1 hour average (worst case operation of the existing and expanded facility respectively) show the following:

• Maximum increase in ground level NO2 concentration for all sensitive receptors when modelled in isolation was 62.2 (Receptor 4) and 70.1 μg/m3 (Receptor 4) for scenarios 2 and 3 respectively against a criteria of 246 μg/m3. • Maximum cumulative ground level concentration for all of the sensitive receptors was 132.4 (Receptor 4) and 141.0 μg/m3 (Receptor 4) for scenarios 2 and 3 respectively against a criteria of 246 μg/m3.

• All predicted concentrations of NO2 when considered in isolation from the environment and when considered cumulatively fall well below the assessment criteria of 246 μg/m3.

• NO2 concentration isopleths for scenarios 2 and 3 are shown in Figure 7-1 and Figure 7-2. 7.7.2 TSP No exceedences of the DECC guideline for TSP were predicted by the modelling either in isolation or cumulatively. The maximum predicted cumulative GLC concentrations for scenarios 2 and 3 were 51.0 and 51.3 μg/m3 respectively (Receptor 5) compared to a guideline value of 90 μg/m3.

Concentration isopleths (annual average) for TSP are shown in Appendix E.

7.7.3 PM10

PM10 particulates from the expanded Orica facility are only expected to change very slightly, with emission rates increasing from 2.4 to 2.7 g/s from the onsite sources due to the use of pollution control equipment on new operations which could generate particulate emissions. As a result there has been only a slight increase in the receptor ground level pollutant concentration predicted by the modelling.

Results for scenarios 2 and 3 (worst case operation of the existing and expanded facility respectively) show the following:

• Maximum increase in ground level PM10 concentration for all sensitive receptors when modelled in isolation ranged from 24.4 and 24.5 μg/m3 for scenarios 2 and 3 respectively (Receptor 3) against a criteria of 50 μg/m3. • Maximum cumulative ground level concentration for all of the sensitive receptors ranged from 49.7 and 49.8 μg/m3 for scenarios 2 and 3 respectively (Receptor 3) against a criteria of 50 μg/m3. The maximum predicted GLCs for both Scenarios 2 and 3 at the sensitive receptors for 24 hour average PM10 are significantly below the DECC guideline when modelled in isolation from background PM10 concentrations.

Despite the cumulative results for PM10 being close to the guidelines as outlined above it is not expected that the change in PM10 concentration would be detectable at Stockton. Hence the expanded facility is not predicted to result in adverse PM10 impacts.

As part of improvement plans for existing operations, Orica is continuing to investigate options to reduce its particulate and PM10 emissions from its existing ANP1 Prill Tower. It should be noted that the modelling undertaken as part of this AQIA did not include in its assessment potential future improvements to ANP1 Prill Tower PM10 emissions.

The maximum predicted GLC isopleths (24 hour and annual average) for PM10 are shown in Figure 7-3 and Figure 7-4.

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7.7.4 Ammonia (Odour)

The background concentrations for NH3 were assumed to be zero and hence no cumulative assessment was performed for NH3 in this assessment. The DECC impact assessment criteria for NH3 is a one hour 3 average of 330μg/m as the maximum GLC. Orica’s maximum predicted NH3 GLC concentration was 3 63μg/m at identified sensitive receivers. No exceedances of the DECC guideline for NH3 were predicted by the modelling. On the basis that there are no exceedances predicted for ammonia as a result of normal plant operations, there is also no odour impact expected as a result of the normal operation of the expanded facility.

The maximum predicted GLC isopleths (1 hour average) for NH3 are shown in Appendix E.

7.8 Environmental Safeguards 7.8.1 Proposed Operation and Mitigation Measures From an air quality perspective the proposed expansion will include the following additional air emission sources (when compared to the existing plant configuration). Refer to Appendix E for proposed source characteristics:

• Reformer Flue Stack (A8G2) - existing Reformer Flue Stack uprated; • New Pre-Reformer Furnace (PRF) Stack; • New Nitric Acid Plant Stack (NAP4) (E1); • New ANP3 Final Scrubber Stack (E3); and • New Boiler Stack (E5). • Expected air emissions rates and concentrations are outlined in Table 7-2. Orica are taking a holistic approach to air emission reduction and is proposing the following mitigation measures:

• Primary reduction of oxides of nitrogen (NOx) from the Nitric Acid Plants (NAPs) would be performed by the absorption columns.

• Final reduction of NOx is planned to be by catalytic reduction with NH3 or natural gas. This would reduce NOx concentrations in the discharged tail gas from the NAP4 (E1) Stack to low levels • A new Prill Tower would constitute part of the proposed Ammonium Nitrate Plant (ANP3). The air used in the Prill Tower would be recycled through a Prilling Air Scrubber (E3) where it is both scrubbed and cooled prior to a portion being discharged. The Prilling Air Scrubber would remove residual ammonium nitrate (AN) dust and NH3.

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• A Refrigeration Purge Gas Scrubber is planned to be installed as part of the modifications on the Ammonia Plant which will reduce NOx emissions from the Reformer Flue Stack (A8G2) in the Ammonia Plant. • Emissions from NAP4 and ANP3 which could contain ammonia during normal operations will be scrubbed prior to discharge. 7.8.2 Proposed Construction Potential emissions to air as a result of the construction of the expansion project include products of fuel combustion from vehicles and equipment used in construction and transportation activities. There is also the potential for dust emissions to occur during construction works. Whilst the location of the Kooragang Island site (away from residential and other sensitive areas) means that there is little potential for dust and exhaust emissions to give rise to nuisance impacts off-site a Construction Safety and Environmental Management Plan (CSEMP) will be prepared prior to commencement of construction of the expansion infrastructure to minimise any potential impacts. The CSEMP, as a minimum, will include:

• Control of access via sealed roadways. • Vehicle speed limits on site. • Monitoring of wind speed and direction to manage dust-generating activities during undesirable conditions. • Minimisation of areas of disturbed soils during construction. • Dust suppression with water sprays or other media during windy periods (as required). • Stockpiling of soils on site to be kept to a minimum. • Construction equipment idling time minimisation and appropriate engine tuning and servicing to minimise exhaust emissions. • Procedures to address any complaints received. • Development of contingency measures. • Considering the construction works are to be undertaken with appropriate environmental safeguards and management measures the dust emissions from wind erosion and vehicle emissions are expected to be negligible. Hence, dispersion modelling was not conducted on the construction impacts of the proposed expansion project. 7.9 Conclusion An air quality impact assessment was undertaken for the proposed expansion of the Orica Kooragang Island facility. The impact assessment predicted that concentrations of NO2, ammonia and Total Suspended Particulates would be below the assessment criteria defined by DECC. PM10 predictions suggest the potential for cumulative impacts under worst case scenarios to be close to the criteria at some locations in Stockton under the conservative assumptions of the study. However PM10 cumulative impacts from the expanded facility are not expected to be distinguishable from existing facility impacts.

Based on the results of the impact assessment no adverse impacts are expected as a result of the proposed expansion of the Orica Kooragang Island facility.

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Orica is incorporating engineering measures into its plant design to ensure it minimises the impact of the proposed expansion on air quality, including:

• Catalytic NOx Abatement to reduce NOx in the tail gas of the new Nitric Acid Plant • Air scrubbing and recirculation technology on the new Prill Tower to minimise particulate emissions from the new tower. • Installation of a Refrigeration Purge Gas Scrubber on the Ammonia Plant which will reduce NOx emissions from the Ammonia Plant. • Scrubbing of ammonia emissions from the Nitric Acid Plant and Ammonium Nitrate Plant during normal plant operation. As part of improvement plans for existing operations, Orica is continuing to investigate options to reduce its particulate and PM10 emissions from its existing ANP1 Prill Tower.

Air quality emissions from the proposed construction activities, due to their temporary nature and variability, were not assessed quantitatively and will be addressed through the development and implementation of a CSEMP.

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STOCKTON STOCKTON

SCENARIO 2 SCENARIO 3

Site boundary Figure 7.1 Scenario 2 and 3 Nitrogen Dioxide Receptor location 1Hr. Ave. Isopleths (Isolation) 3 Not to Scale Assessment criteria: 246ug/m Orica Australia Pty Ltd Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

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SCENARIO 2 SCENARIO 3

Site boundary Figure 7.2 Scenario 2 and 3 Nitrogen Dioxide Receptor location 1Hr. Ave. Isopleths (Cumulative) 3 Not to Scale Assessment criteria: 246ug/m Orica Australia Pty Ltd Ambient background concentration: 70.2 Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

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STOCKTON STOCKTON

SCENARIO 2 SCENARIO 3

Site boundary Figure 7.3 Scenario 2 and 3 PM10 24Hr. Ave. Receptor location Isopleths (Isolation) 3 Not to Scale Assessment criteria: 50ug/m Orica Australia Pty Ltd Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

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SCENARIO 2 SCENARIO 3

Site boundary Figure 7.4 Scenario 2 and 3 PM10 24Hr. Ave. Receptor location Isopleths (Cumulative) 3 Not to Scale Assessment criteria: 30ug/m Orica Australia Pty Ltd Ambient background concentration: 25.3 Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

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8.0 Greenhouse Gases

A Greenhouse Gas (GHG) Assessment was undertaken to determine the GHG emissions associated with the proposed construction and expansion of operations at the Kooragang Island facility. A detailed GHG Assessment is provided in Appendix F.

8.1 GHG Emissions A number of conventions on the determination, assessment and the reporting of greenhouse gas emissions from human activity have been developed. These are discussed in the National Greenhouse Accounts (NGA) Factors (DCC, 2008). The DCC Workbook adopts the reporting approach outlined in the document Australian Methodology for the Estimation of Greenhouse Gas Emissions and Sinks (DCC, 2006). This methodology divides emissions into three broad categories or “Scopes” referred to as Scopes 1, 2 and 3.

Scope 1 covers direct emissions from sources within the boundary of an organisation including fuel combustion, manufacturing processes and onsite waste disposal.

Scope 2 covers indirect emissions from the consumption of purchased electricity, steam or heat produced by another organisation. Scope 2 emissions result from the combustion of fuel to generate the electricity, steam or heat and do not include emissions associated with the production of fuel. Scopes 1 and 2 are carefully defined to ensure that two or more organisations do not report the same emissions in the same scope.

Scope 3 includes all other indirect emissions that are a consequence of an organisations activities but are not from sources owned or controlled by the organisation.

The estimation and reporting of greenhouse gas emissions are calculated via a number of different methods. The procedures specified in the Workbook (DCC, 2008) have been used in this assessment. These are consistent with internationally applied methods.

The methodology identifies the primary greenhouse gases as follows:

• Carbon dioxide (CO2);

• Methane (CH4);

• Nitrous oxide (N2O); and • Synthetic Gases (hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur

hexafluoride (SF6)).

CO2 and N2O are typically formed and released during the combustion of gaseous, liquid and solid fuels or during process reactions (as is the case for Orica) and represent the most significant gases for Orica’s existing and proposed expanded facility. CO2 and N2O are emitted from various sources when fuels are burnt in the processes during the production of ammonia and nitric acid and during generation of the electrical energy.

Inventories of greenhouse gas emissions can be calculated using published emission factors. Different gases have different greenhouse warming effects (potentials) and emission factors take into account the global warming potentials of the gases created during combustion or process reactions.

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The global warming potentials (GWP) detailed in the NGA Factors (DCC, 2008) are as follows:

• CO2 – 1

• N2O – 310 • When the GWP are applied to the estimated emissions then the resulting estimate is referred to as a “CO2-equivalent emissions” (CO2-e). The emission factors published by the Department of Climate Change (DCC) in the NGA Factors Workbook (DCC, 2008) have been used to convert fuel usage, natural gas usage and electricity consumption into CO2-equivalent emissions along with process emissions supplied by Orica. The relevant emission factors have been outlined in Section 8.4.

Orica has been requested to undertake a quantitative analysis of the Scope 1 and Scope 2 greenhouse gas emissions of the project and a qualitative assessment of the impacts of these emissions.

8.2 Description of Current Plant GHG Emissions The existing Orica facility on Kooragang Island uses natural gas to produce ammonia, which is then used to produce nitric acid and ammonium nitrate.

• The existing facility consists of an ammonia plant, three nitric acid plants (NAP1, NAP2 and NAP3) and two ammonium nitrate plants (ANP1 and ANP2). A description of these processes and other general ancillary activities from a greenhouse gas emission perspective is as follows: Ammonia Plant

• The Ammonia Plant requires hydrogen as a reactant, which is produced from natural gas and steam in a two stage reforming process. This process results in the formation of CO2 which is stripped from the hydrogen containing gas stream and discharged to the atmosphere. Since natural gas is a key feed material, any increase in production will directly and proportionally increase CO2 emissions. It is economically and environmentally desirable to maximise the efficiency of the reforming process. • Natural gas is also combusted to provide heating in the Primary Reformer, Preheater and Boiler. These processes also produce CO2. • Electricity is consumed in the Ammonia Plant in pumps, compressors and other machinery, which indirectly contributes to GHG emissions. Nitric Acid Plants

• Nitric Acid Plants convert ammonia to nitric acid and produce nitrous oxide (N2O) as a by-product. N2O is a significant GHG with a global warming potential 310 times higher than CO2. Hence the by-product N2O adds a significant amount of equivalent CO2 emissions. • Indirect contributions to GHG emissions arise from electricity generation to drive pumps and motors within the plant. Ammonium Nitrate Plants

• Ammonium Nitrate (AN) plants produce final AN product by reacting ammonia and nitric acid. No direct CO2 emissions occur from this process stage. However, the AN Plants use electricity to drive various pumps, fans and other machinery throughout the plant, which indirectly contributes to GHG emissions.

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Other General Process Emissions

• Cooling towers are used to produce cooling water for process operations and consume electricity to drive circulation pumps and fans. • Steam on the site is generated by means of boilers, which will emit GHG's predominantly in the form of CO2 as a result of the combustion of natural gas. • Product storage and dispatch facilities will require electricity for driving pumps, conveyors and other equipment. 8.3 Description of Proposed Expansion GHG Emissions The proposed expansion project involves the construction of an additional Nitric Acid Plant and an additional Ammonium Nitrate Plant referred to as NAP4 and ANP3 respectively. The project would also involve modification of the upstream Ammonia Plant, additional storage facilities and other infrastructure. The proposed facility expansion will increase operational capacity from 500 ktpa (currently operating at 430ktpa) to 750 ktpa.

Modification of the various process streams from a GHG perspective is expected to consist of the following:

Modification of Existing Ammonia Plant

• A Pre-Reformer will be added to the existing reformer facility (enabling the increased capacity required for the expanded plant whilst allowing the existing Reformer to keep operating). This will include a gas-fired furnace. • A new compressor powered by a steam turbine will be constructed to replace an existing steam driven air compressor and an existing electric driven air compressor. This is expected to reduce the electric power consumption of the plant by 1.5 MW, decreasing the indirect CO2 emissions generated by the Ammonia Plant. • A series of minor machinery and vessel modifications will also be undertaken to improve the efficiency and output of the plant. The above modification is expected to improve the gas efficiency in the Ammonia Plant by 4% per tonne of NH3 produced which will slightly reduce GHG emissions from the ammonia plant on a per tonne of NH3 basis.

Proposed NAP4

• State of the art filtration and temperature controls to maximise the efficiency of the catalyst and minimise the risk of reduced conversion efficiency and formation of N2O.

• N2O abatement technology, which will destroy at least 65% of the N2O produced in the process. • Consideration of an electric generator to utilise the energy available from the excess steam with the potential to return up to approximately 2.2MW for site use. This will minimise external electricity consumption, which will help minimise the carbon footprint of the site. The new NAP is expected to operate in a similar manner to the existing NAPs with regards to process inputs and outputs.

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Existing NAPs

To achieve Orica’s sustainability aspirations, Orica is currently investigating N2O abatement technologies for retrofitting to its existing nitric acid plants. It is expected that these technologies can deliver at least a 65% reduction in N2O from each plant.

It is expected that by the completion of this project that N2O abatement technology will be fitted to the existing NAPs.

Proposed ANP3

GHG emissions are limited to an increase in electricity usage for the new plant and equipment in ANP3. No direct CO2 emissions or CO2 equivalent emissions are expected.

Proposed Boiler for Steam Generation

A new natural gas fired (NGF) boiler would supply the start up steam requirements for the proposed NAP4 and ANP3. The steam system supporting NAP4 and ANP3 is expected to be integrated into the existing site system. The new boiler may also potentially replace the existing steam boilers currently supplying the site and will be of modern design.

Construction GHG Emissions

GHG emissions during construction are expected to include electricity usage (from site sheds, electric tools etc), products of fuel combustion from vehicles and equipment used in construction and transportation activities.

8.4 Emission Calculation Orica has provided information on fuel and electricity consumption along with process emissions during the construction and operational phases of the Project.

8.4.1 Construction Phase

Greenhouse gas emissions during construction in tonnes of CO2-e, from each source would be:

• Electricity usage 365 t; • Diesel usage 175 t; and • Petrol usage 1,234 t;

This would equate to a total expected construction quantity of 1774 t of CO2-e.

8.4.2 Operational Phase The operational phase of the Orica facility is expected to emit GHG either directly or indirectly from the following sources: • Emissions from a vent and stacks; • Electricity used to run plant operations; • Plant workers using small vehicles to travel to and from the site; and • Distribution of Orica’s product via road, rail and ship.

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An analysis has been undertaken to examine direct emissions from the plant separately from the indirect emissions, and transportation emissions. Table 8-1 shows the expected direct and electricity usage CO2-e annual emissions from the Orica facility prior to and post the facility expansion.

As shown in Table 8-1, direct GHG emissions as a result of N2O emissions contribute a significant proportion (58%) of total GHG related emissions for the existing facility. Direct combustion processes in ammonia and steam production is the second most significant proportion (35%) followed by indirect emissions from electricity consumption (6%).

From Table 8-1 it can also be seen that the implementation of N2O abatement technology across all nitric acid plants will significantly reduce the GHG emissions from the facility. In combination with ammonia and electrical efficiency initiatives implemented as part of the expansion project, the overall GHG emitted from the production of AN will be reduced by approximately 20% of current emissions. Total GHG emissions from direct process and electricity usage will reduce from approximately 1.7 Mtpa CO2-e to approximately 1.4 Mtpa CO2-e.

Table 8-1: Direct Process GHG Emissions and Equivalent Emissions due to Electricity Usage Post Expansion % % GHG Emission Existing (Without (Including Difference Difference Units Source Plant (without (with N2O N2O 2 1 abatement) Abatement) abatement) abatement)

CO2 from natural gas t/annum 596,371 720,924 720,924 21% 21%

N2O as CO2-e t/annum 1,000,141 1,556,717 544,851 56% -46%

CO2 from electricity t/annum 95,699 88,155 88,155 -8% -8%

Total CO2-e t/annum 1,692,211 2,365,796 1,353,929 40% -20% Positive values indicate increase on CO2-e values between the existing plant and the expanded plant and negative values indicate a decrease between the existing plant and the expanded plant 1 % Difference in CO2-e between existing scenario and expansion scenario with no N2O abatement technology 2 % Difference in CO2-e between existing scenario and expansion scenario with N2O abatement technology installed on all nitric acid plants 8.4.3 Transportation Related GHG Emissions Details of additional GHG emissions due to transportation (cars, trucks, trains and ships) have been collated and are shown in Table 8-2. The transportation related emissions comprise only 1% of total GHG emissions from the facility.

Table 8-2: Total Expanded Plant GHG Assessment Results

Calculation quantity GHG Emission GHG 1 Full Fuel Cycle Units (t CO2-e/annum) Source Emission Factor Current Future Current Future Small kL/yr 637 660 2.38 tCO -e / kL 1,516 1,571 vehicles2 2 Heavy kL/yr 5,825 8,585 2.70 tCO -e / kL 15,728 23,179 Trucks3 2

Trains (3000 tonne per km/annum 0 66,000 20 gCO2-e /t.km 0 3,960 4 train)

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Calculation quantity GHG Emission GHG 1 Full Fuel Cycle Units (t CO2-e/annum) Source Emission Factor Current Future Current Future Shipping km/annum (4340 tonne 120,000 120,000 7 g CO2-e /t.km 3,645 3,645 5 per ship)

Total CO2-e per annum 20,889 32,355 1 Value supplied by Orica. 2 Assumed 150 typical petrol driven cars 80 km round trip per day for 7 days/week for the existing case and 225 cars per day following the expansion. Example calculation for current small vehicles use 438 kL X 2.38 t CO2-e/kL=1042 t CO2-e/yr 3 Assumed 49 and 71 diesel road tankers drive 200 km each way per day for 365 days/year (existing plant and expansion respectively). 4 Assumes 33 trips of 2000km per year (calculated at 3000 tonnes per train). Example calculation for future train use 66,000 km X

3000 t x 20 g CO2-e /t.km ÷1000÷1000 = 3960 t CO2-e/yr 5 Assumes 20 trips of 6000km per year (calculated at 4340 tonnes per ship). Example calculation for ship use 120,000 km X 4340 t x 7 g CO2-e /t.km ÷1000÷1000 = 3645 t CO2-e/yr

8.5 Conclusion Orica’s current greenhouse gas emissions from the operation of the Kooragang Island facility have been calculated to be approximately 1.7Mtpa CO2-e which corresponds to 6% of Australia’s industrial GHG emissions and less than 0.3% of total emissions from all sources in Australia in 2006 (DCC, 2006).

Orica’s primary contribution to greenhouse gas emissions is via nitrous oxide (N2O), a by-product in the production of nitric acid which comprises 58% of Orica’s CO2-e emissions from the Kooragang Island facility. N2O is a potent greenhouse gas and has a CO2 equivalence of 310. Other contributions to GHG emissions are via direct combustion processes in ammonia and steam production (35%) and indirect processes such as electricity consumption (6%). Emissions relating to transport are approximately 1% of Orica’s total GHG emissions.

Orica is committed to the maximum practical GHG reduction for its existing and expanded facility as part of its company sustainability goals. Through the course of the expansion project it is Orica’s intention to install N2O abatement technology on the proposed new Nitric Acid Plant (NAP4) and also retrofit technology to the existing Nitric Acid Plants. Such technology is expected to reduce N2O emissions from nitric acid production by at least 65%. Through the implementation of N2O abatement technology on all Nitric Acid Plants in combination with ammonia and electrical efficiency initiatives (such as process efficiency improvements, equipment design selection criteria, and optimisation of compressor drive trains) implemented as part of the expansion project, Orica’s GHG footprint following completion of the project will reduce by approximately 20% from current levels to approximately 1.4Mtpa CO2-e. This would correspond to 0.2% of the total emissions from all sources in Australia (as reported in 2006).

Orica’s GHG emissions relating to the construction of the expansion project have been calculated to be 1774 t CO2-e.

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9.0 Noise and Vibration

9.1 Introduction Atkins Acoustics and Associates Pty Ltd (Atkins) was engaged by ENSR on behalf of Orica to prepare a Noise Impact Assessment (NIA) for the proposed expansion of the existing Kooragang Island Ammonium Nitrate Production Facility. The full report is available in Appendix G.

The main aims of the investigations and assessment were to:

• Identify residential and other sensitive areas potentially exposed to noise emissions from the proposal; • Measure, review and comment on the pre-development ambient background noise levels; • Establish project noise goals in accordance with DECC guidelines and procedures including the Industrial Noise Policy (INP) and the Environmental Noise Control Manual (ENCM); • Predict and evaluate operational noise from the proposal; • Predict and evaluate traffic noise impacts arising from the proposal; • Predict and evaluate construction noise and vibration impacts; and • Where assessment goals are exceeded, recommend ameliorative control measures. Additionally, Orica is currently undertaking a review of noise emissions from its Kooragang Island site in accordance with a Pollution Reduction Program (PRP) agreed with the DECC. The PRP aims were to quantify the level of noise emitted from the facility, identify and quantify sources contributing to noise at Stockton and develop a program to reduce noise emissions from the facility.

Whilst port activities make some contribution to background noise, as no increase of shipping of product in the long term is expected, sea transportation noise was not included in this assessment. Similarly as Orica has historically used rail for transportation of product and is currently only investigating the resumption of rail transportation of product equivalent to historical volumes moved by rail previously, this has not been considered in noise assessment.

9.2 Existing Noise Environment The main residential areas potentially exposed to the noise from the facility and other Kooragang Island industries are located at Stockton. The Stockton properties are some 800-900m east of the facility. There are also residential properties to the west at Carrington and Mayfield, 1.5km and 2km respectively. For the purpose of this study noise audits, modelling and the assessment have focused on the Stockton area.

The facility and the surrounding land are zoned for port and industrial use and the adjacent neighbours on the northern, western and southern boundaries reflect this (Section 1.3).

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9.3 Assessment of Existing Noise Environment 9.3.1 Local Meteorological Conditions Site investigations confirmed that the Stockton/Kooragang Island area is subject to seasonal prevailing winds and temperature inversions. It is recognised that the effects of these meteorological conditions can enhance or reduce noise propagation and noise perceived at distant receptors. In the near field, wind has only a minor influence on measured down wind sound levels. Wind effects become more important as distances increase. Depending on wind speed and distance from a noise source, up wind noise measurement levels compared to down wind conditions can vary by over ±10dB(A). Temperature gradients create similar enhancement effects to wind, however the effects are generally less than wind effects and uniform in all directions.

9.3.2 Attended Noise Monitoring Attended audits revealed that the ambient noise at Stockton is controlled by industrial noise, local domestic and traffic activities, surf and waterway activities. Investigations revealed that meteorological conditions including wind speed, wind direction and temperature inversions control the level of noise experienced at Stockton.

9.3.3 Unattended Noise Monitoring The residential locations were selected to provide information on noise levels in the area with the most potential to be impacted by noise from Orica. The monitoring locations are shown in Figure 9-1 and are identified below:

• R1 -186 Fullerton Street, Stockton • R2 - 239 Dunbar Street Stockton • R3 - 284 Fullerton Street, Stockton • R4 - Internal carpark fence opposite Ammonia Plant • R5 - Boundary fence opposite No. 1 Ammonium Nitrate Plant • R6 - DECC Monitoring Point 1 (River Monitoring Station) 9.3.4 Measurement Results Table 9-1 below shows the Rating Background Levels (RBL) and Ambient Noise Levels for the receivers listed above.

Table 9-1: Rating Background Levels (RBL) and Ambient Noise Levels Assessment Background Noise Levels (dB(A))

Date RBL Ambient LAeq, period Day Evening Night Day Evening Night Ambient Noise Measurement Results (April/May 2008) Reference Measurement Location R1. 186 Fullerton Street (Residential) RBL 45.0 46.7 50.9

Logarithmic Average LAeq 58.9 57.0 55.3 Reference Measurement Location R2. 239 Dunbar Street (Residential) RBL 44.9 46.3 48.0

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Assessment Background Noise Levels (dB(A))

Date RBL Ambient LAeq, period Day Evening Night Day Evening Night Ambient Noise Measurement Results (April/May 2008)

Logarithmic Average LAeq 59.0 54.4 53.3 Reference Measurement Location R3. 284 Fullerton Street (Residential) RBL 46.8 43.7 45.5

Logarithmic Average LAeq 63.1 66.1 57.1 Reference Measurement Location R4. Mid Northeast Boundary (Orica Boundary) RBL 63.3 67.6 68.3

Logarithmic Average LAeq 68.7 74.6 70.3 Reference Measurement Location R5. Mid Southeast Boundary (Orica Boundary) RBL 61.5 63.7 64.3

Logarithmic Average LAeq 64.9 65.2 65.5 Reference Measurement Location R6. River Monitoring Station RBL 54.6 59.4 60.8

Logarithmic Average LAeq 60.1 61.4 62.3

In addition to unattended monitoring, attended noise measurements were undertaken on Sunday 11 May 2008. Table 9-2 presents a summary of site attended noise measurement results recorded at Stockton. Observations during the monitoring confirmed that the ambient noise was controlled by industrial noise (Kooragang Island), local domestic activities, road traffic and waterway activities.

During the attended noise audit investigations confirmed that to the west of the facility, a ship was docked and the bulk terminal vacuum plant and the coal loader feed conveyors were operating.

Table 9-2: Attended Noise Measurement Results Sound Pressure Level Location Time Wind (dB(A)) Comment

LA90 LAeq R1 2105 240o (1.5 m/s) 50.1 51.4 Electric motors, general industry, low frequency noise, isolated traffic R3 2205 240o (1.5 m/s) 50.8 51.9 General industry, low frequency noise, isolated traffic, tug Boat Ramp 2130 240o (1.5 m/s) 51.0 52.4 General industry, low frequency noise, isolated traffic

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9.4 Review of Noise Assessment Goals 9.4.1 Nearby Residential Land Use Development (Stockton) Stockton has been identified as the closest residential area that would be exposed to noise from the proposed expanded facility. It is recognised that noise from established industrial areas can control the noise environment of an area and in many established areas the existing levels exceed present day objectives referenced in the NSW Industrial Noise Policy (INP) (EPA, 2000).

The Independent Hearing and Assessment Panel (IHAP 2007) for the NCIG Coal Export Terminal stated that the long term goal for noise levels in Stockton was “suburban”, although it has an interface with an established port and industrial area and is therefore exposed to industrial noise. The current noise levels in the western fringe of the suburb are above the INP amenity criteria at night time as a result of the existing domestic, traffic and industrial sources. IHAP recognised that the suburban goal is a long term one and that the noise environment is controlled by the existing developments and land uses in the area. The suburbs of Carrington and Mayfield are classified as “urban” in relation to their noise environment.

The INP (Table 2.2) states that where it is recognised that the existing noise exposure is unlikely to decrease in the future and the existing noise level from industrial sources exceed the recommended level (IHAP 40dB(A)) by more than 2dB(A), the recommended target LAeq level for the new sources alone is set at the existing level minus 10dB(A).

9.4.2 Neighbouring Industrial Land Use Development As stated in Section 4, land directly adjacent to the facility is zoned as 4(b) Ports and Industry in the Newcastle LEP and is used exclusively for port, port related and industrial activities. Referenced to the INP (Table 2.1), the industrial premise amenity criteria of 70/75dB(A) (recommended acceptable/maximum) would therefore apply to this area.

9.4.3 Existing Noise Licence Conditions The current DECC Environmental Protection Licence (EPL- 828) applying to the facility includes a Pollution Reduction Program (PRP) that requires the licensee to implement actions to reduce noise emitted from the site. Orica has commenced and is currently implementing a noise reduction program for the facility.

9.5 Strategies for Noise Control Planning With respect to what is considered to represent the current best practice for assessing industrial noise, the main aims are to limit continuing increases in ambient noise (noise creep) from industrial sources. As part of the process recommended for assessing industrial noise, the INP recognises that noise from established industrial areas can control the noise environment of areas and in many established residential areas the existing noise levels exceed present day objectives referenced in the INP.

When assessing noise from established industrial areas, controls being considered need to be evaluated with a holistic approach. In balance a noise reduction benefit and cost analysis is generally required to show that any mitigation measures being considered are practical, economical reasonable and technically feasible prior to committing to any undertaking.

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9.5.1 Determination of Allowable Industrial Noise Limits Where the existing noise environment exceeds the recommended planning level by more than 2dB(A) the INP recommends that the target assessment level should be set at the existing noise level minus 10dB(A). For the purpose of noise modelling and assessment it was assumed that the existing predicted noise contributions from the Orica facility for neutral (calm) meteorological conditions would form the basis of evaluating and determining the project noise design assessment goals. The predicted noise contributions from the existing facility are shown in Table 9-4 (Condition 1).

9.5.2 Sleep Disturbance Goals

The DECC accept that the LA1, 1min not exceeding the RBL by more than 15dB(A) is appropriate for assessing sleep disturbance during night-time hours (2200-0700). Table 9-3 presents the sleep disturbance assessment goals developed from the results in Table 9-1.

Table 9-3: Sleep Disturbance Assessment Goals Sleep Disturbance Existing RBL (dB(A)) Referenced Assessment Assessment Goals (dB(A)) Location LA90 LA1.1min (R1) 186 Fullerton Street 51 66 (R2) 239 Dunbar Street 48 63 (R3) 284 Fullerton Street 46 61

9.6 Proposed Expanded Facility Operational Noise The main operational noise sources from the expanded plant would be associated with compressors, pumps, fans, valves, gas flow through pipe work and venting. Additionally, variations in noise emissions from the facility may occur during startup and shutdown periods, however these events are generally of short duration. To ameliorate noise, a number of measures have been recommended for consideration and incorporation in the design of the new plant. These are listed in Section 9.10.1.

9.7 Operational Noise Modelling Results and Assessment 9.7.1 Meteorological Scenarios Section 5.3.1 of the INP guidelines recommends that wind effects be assessed when wind speeds of 3m/s or below occur for 30% of the time or more in any assessment period or season. Considering the meteorological and seasonal wind data, calm conditions and west-north-west winds have been assessed together with temperature inversions. The meteorological scenarios modelled are outlined below:

• Condition 1: Calm: relative humidity of 70%, and air temperature of 20°C; • Condition 2: WNW wind: 3m/sec, relative humidity of 70%, and air temperature of 20°C; • Condition 3: Temperature gradient 3°C/100m elevation, relative humidity of 70%, and air temperature of 15°C, and • Condition 4: Temperature gradient of 3°C/100m elevation, 2m/sec west-north-west wind, relative humidity of 70%, and air temperature of 15°C.

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9.7.2 Existing Orica AN Facility Activities Five (5) reference locations in Stockton (Refer Figure 9-2, Figure 9-3 and Figure 9-4) were selected to model noise contributions from the existing facility activities, these are detailed below:

• P1 - Fullerton Street, Stockton (opposite the Stockton Centre); • P2 - 186 Fullerton Street, Stockton; • P3 - 239 Dunbar Street, Stockton; • P4 - 284 Fullerton Street, Stockton; and • P5 – Boat Ramp, Fullerton Street, Stockton. Table 9-4 presents a summary of the predicted noise levels for each assessment location for the existing facility. Noise contours produced from the Environmental Noise Model (ENM) modelling for the existing facility are presented in Figure 9-3.

Table 9-4: Predicted Noise Levels for Existing Site Operating Conditions Predicted Noise Level (dB(A)) Assessment Location Meteorological Conditions 1 2 3 4 P1 – Fullerton Street (North) 41 49 44 49 P2 - 186 Fullerton Street 50 62 53 61 P3 – 239 Dunbar Street 49 61 52 59 P4 – 284 Fullerton Street 51 62 54 61 P5 – Boat Ramp 53 63 54 61

9.7.3 Proposed Expanded Plant Noise Predictions The results of noise modelling for the expanded plant are presented in Table 9-5. Noise contours produced from the Environmental Noise Model (ENM) modelling for the expanded plant are presented in Figure 9-4.

Table 9-5: Predicted Noise Levels for Existing and Proposed Expanded Plant Predicted Noise Level (dB(A)) Meteorological Conditions Assessment Location 1 Existing Proposed P1 – Fullerton Street (North) 41 27 P2 - 186 Fullerton Street 50 37 P3 – 239 Dunbar Street 49 36 P4 – 284 Fullerton Street 51 39 P5 – Boat Ramp 53 41

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The predicted levels for neutral calm conditions (Condition 1) in Table 9-5 show that the noise contributions from the expanded plant are more than 10dB(A) lower than the existing plant contributions for the corresponding conditions (Condition 1 in Table 9-4) and would not significantly contribute to the existing industrial noise at Stockton.

9.7.4 Sleep Disturbance Noise Predictions Possible intermittent noise from valve discharge activities was modelled with the ENM and a source sound power level of 130dB(A) to assess the potential for sleep disturbance. The results of the noise modelling are presented in Table 9-6.

Table 9-6: Predicted Intermittent Noise Levels Assessment Location Predicted Noise Level (dB(A)) P1 – Fullerton Street (North) 41 P2 - 186 Fullerton Street 54 P3 – 239 Dunbar Street 51 P4 – 284 Fullerton Street 53 P5 – Boat Ramp 56

The predicted levels in Table 9-8 show that noise from the intermittent noise sources are less than 60dB(A) and satisfy the project noise assessment objectives summarised in Table 9-3.

9.8 Road Traffic Noise Assessment The proposed expanded plant has the potential to increase road traffic volumes on the island road network. The main through roads on Kooragang Island are Cormorant Road and Teal Street. They carry industrial traffic to the island and to the major residential areas to the north (Stockton peninsula and through to Port Stephens and Nelson Bay).

Traffic counts reported for Stockton Bridge indicate that traffic growth to and from the island have steadily increased over the last 10 years. For the year 2007 the average daily count was 20,233 vehicles.

The site currently generates some 266 truck movements (inbound and outbound) per day. The trucks are composed of a mixture of B-Doubles (17%), truck and dog trailers (23%) and single trailer units (60%). For the future expanded development truck volumes are projected to increase by 126 trucks movements, to some 392 per day, an increase of 47%.

Section 11 of this EA indicates that the existing operations generate some 436 car movements (inbound and outbound) per day with a projected increase of 96 per day to 532 car movements per day.

When compared to the existing traffic volumes at Stockton Bridge (20,233) the additional 222 (126+96) vehicle movements per day in terms of noise would be considered as insignificant and not give rise to any noticeable change to the traffic noise at Stockton.

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9.9 Construction Noise and Vibration Assessment 9.9.1 Construction Noise Goals Construction noise assessment procedures and goals are documented in the Environmental Noise Control Manual (ENCM Chapter 171). The ENCM provides assessment objectives for construction noise referenced to periods varying from four (4) weeks to greater than twenty-six (26) weeks. Table 9-7 presents a summary of the recommended assessment goals.

Table 9-7: Assessment Objectives for Construction Noise Assessment Design Objective Measured RBL’s Construction Period Objective (dB(A)) LA10, 15min LA10, 15min (dB(A)) < 4 weeks RBL + 20 dB(A) 45-48 65-68 > 4 weeks and < 26 RBL + 10 dB(A) 45-48 55-58 weeks > 26 weeks RBL + 5 dB(A) 45-48 50-53

The proposed construction period for the project is expected to be undertaken over a period of greater than 26 months, which would mean that the project noise assessment objectives are 50-53 dB(A).

9.9.2 Construction Noise Assessment Noise from typical construction activities was modelled with the ENM and a cumulative source sound power level of 120dB(A). The results of noise modelling for the expanded plant construction are presented in Table 9-8.

Table 9-8: Predicted Construction Noise Levels Predicted Noise Level Assessment Location dB(A) P1 – Fullerton Street (North) 31 P2 - 186 Fullerton Street 44 P3 – 239 Dunbar Street 41 P4 – 284 Fullerton Street 43 P5 – Boat Ramp 46

The predicted noise levels in Table 9-8 show that noise from the construction activities satisfies the project noise assessment objectives.

9.9.3 Construction Vibration Assessment Of the construction activities to be undertaken, the assessment showed that pile driving activities generate the highest vibration levels, with the potential to exceed the annoyance criteria of 0.45mm/sec at a distance of 100-150m. As the Stockton dwellings are some 800-900m from the envisaged construction activities, vibration risk to residential properties is considered to be negligible.

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9.10 Environmental Safeguards 9.10.1 Operation The predicted noise levels show that the noise contributions from the expanded plant satisfy the project noise goals and are more than 10dB(A) lower than the existing plant contributions under neutral calm conditions. To ameliorate noise, the following design strategies have been recommended for consideration and incorporation into the design of the new plants:

• Individual purpose built enclosures; • A purpose built compressor building; • Low noise rated valves; • Low noise rated fans and blowers; • Insulated pipework where practical; and • Selection of plant to limit noise emissions. Where practical and feasible, motor drives and gearboxes would be specified and selected to achieve a noise level of less than 82dB(A) at one (1) metre from the source. Monitoring of the effectiveness of the operational noise control measures implemented as part of the expansion project will be undertaken in accordance with a programme developed following discussions with the DECC regarding compliance monitoring requirements. The programme will consider requirements such as monitoring locations and compliance criteria. 9.10.2 Construction Whilst the assessment results showed that noise generation from construction activities would meet criteria at nearby receivers, noise and vibration would be managed during construction and form part of the CSEMP. The plan would include a monitoring program, mitigation options and management practices. It recommended that the following be included:

• An undertaking to control and minimise noise and vibration impacts during the construction phase; • All plant would be selected after consideration of potential impacts from noise and vibration; and • The development of a site induction program for all contractors. The program to include noise reduction techniques and ongoing maintenance of noise controls throughout the duration of the construction works.

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9.11 Conclusion A noise assessment was undertaken to predict and assess potential impacts during operation and construction of the proposed expanded Orica Facility. The noise assessment focussed on identified receivers, particularly Stockton.

The results of the noise assessment show that the expanded facility will comply with recognised noise goals as stated within the INP. Based on identified design strategies, the plant and equipment associated with the proposed expansion were predicted to be more than 10dB(A) lower than the existing noise generation levels from the facility under neutral calm conditions. These predicted noise levels for the expanded facility are not expected to impact upon the nearby residential receivers at Stockton. Additionally, the assessment indicated that the proposed expanded facility would achieve the relevant sleep disturbance criteria.

Construction noise and vibration predictions showed that construction activities would achieve relevant noise and vibration goals for nearby receivers, such as Stockton.

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R5 R3

R1 - 186 Fullerton Road, Stockton R2 - 239 Dunbar Street, Stockton R3 - 284 Fullerton Road, Stockton R4 - Internal carpark fence opposite Ammonia Plant R5 - Boundary fence opposite No.1 Ammonium Nitrate Plant R6 - DECC Monitoring Point 1 (River Monitoring Station)

Site boundary Figure 9.1 Noise Measurement Location R1 Noise measurement location Orica Australia Pty Ltd 0 600m Environmental Assessment Proposed Uprate of Ammonium Nitrate Facility

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P5 P3

P1 - Fullerton Road, Stockton (opposite the Stockton Centre) P2 - 186 Fullerton Road, Stockton P3 - 239 Dunbar Street, Stockton P4 - 284 Fullerton Road, Stockton P5 - Boat Ramp, Fullerton Street, Stockton

Site boundary Figure 9.2 Predicted Noise Level Locations P1 Predicted noise level location Orica Australia Pty Ltd 0 600m Environmental Assessment Proposed Uprate of Ammonium Nitrate Facility

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(2009) Source: Atkins Acoustics Data Source: Atkins Acoustics (2009) Noise Contours - Existing PlantOrica (Calm) Australia Pty Ltd Environmental Assessment Proposed Uprate of Ammonium Nitrate Facility Figure 9.3

35 40 35

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55 50

Site boundary Noise contour (dBA) Noise measurement location

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45 40 600m 0 186 Fullerton Road, Stockton 284 Fullerton Road, Stockton 239 Dunbar Street, Stockton Internal carpark fence opposite Ammonia Plant Boundary fence opposite No.1 Ammonium Nitrate Plant DECC Monitoring Point 1 (River Monitoring Station) R1 - R2 - R3 - R4 - R5 - R6 - G:\Jobs\S6\S60600_S60699\S60653\EA\S6065303 F9.3 20 04 2009

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(2009) Source: Atkins Acoustics Data Source: Atkins Acoustics (2009) Noise Contours - Uprate PlantOrica (Calm) Australia Pty Ltd Environmental Assessment Proposed Uprate of Ammonium Nitrate Facility

Figure 9.4 30

R2 40

45 R6 50 R4

30 Site boundary Noise contour (dBA) Noise measurement location 35 R1 600m 0 DECC Monitoring Point 1 (River Monitoring Station) 186 Fullerton Road, Stockton 284 Fullerton Road, Stockton 239 Dunbar Street, Stockton Internal carpark fence opposite Ammonia Plant Boundary fence opposite No.1 Ammonium Nitrate Plant R1 - R2 - R3 - R4 - R5 - R6 - G:\Jobs\S6\S60600_S60699\S60653\EA\S6065303 F9.4 20 04 2009

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10.0 Hazard and Risk

10.1 Introduction A Preliminary Hazard Analysis (PHA) for the proposed expansion has been undertaken by consultants GHD on behalf of Orica. The PHA has been carried out in accordance with NSW Department of Planning (DoP) Hazardous Industry Planning Advisory Paper No. 6 – Guidelines for Hazard Analysis (HIPAP 6, (DoP, 1992)). This chapter summarises the contents of the PHA report. The full PHA report is presented in Appendix H.

In this chapter, the term “New Plant and Equipment“ is used to describe the additional plant and equipment to be installed as part of this proposal. The term “Project” is used to mean the combination of New Plant and Equipment, modifications to existing plants, and the unchanged site operations, i.e. the total future site operations following completion of the proposal.

10.1.1 Risk Assessment in Land Use Planning The NSW Government has recognised that the risks associated with the manufacture, processing, storage and handling of hazardous materials can never be entirely eliminated. Government and Industry have a responsibility to ensure that these risks are properly managed and that they are negligible compared to the risks the community faces during the course of everyday life.

The NSW Department of Planning (DoP) has developed a rigorous assessment process for approvals for developments involving potentially hazardous industries. This process provides assurance that the risks imposed by a development upon surrounding land uses stay within acceptable limits throughout the life of the development.

The NSW DoP’s Director General’s Requirements for the Environmental Assessment for this Project include the undertaking of a Preliminary Hazard Analysis (PHA) to provide a ’detailed assessment of the offsite risks’. These risks can be compared with the criteria for acceptable risk presented in the DoP’s Hazardous Industry Planning Advisory Paper No. 4, Risk Criteria for Land Use Safety Planning (HIPAP 4, (DoP, 1992/2002)) to assist in assessing whether the development is permissible.

10.1.2 Objectives of the Preliminary Hazard Analysis The general objectives of a PHA are to develop an understanding of the hazards associated with a potentially hazardous development and to model the consequences, calculate the various risks and compare these against the designated criteria. This will assist in determining whether the risks are sufficiently low that the development can be assessed as not being hazardous.

The Director-General’s requirements for this PHA are that it:

1 covers the “combined existing and proposed operations” 2 provides “a detailed assessment of the potential offsite risks”, 3 provides “details of the receipt, transfer and storage of chemicals on site, such as ammonia and ammonium nitrate”. In addition, the PHA results for the Project have been compared with the Existing Site Operations and also results given in the DoP publication Newcastle Kooragang Island Risk Assessment Study (DoP, 1992b). This study made a number of recommendations to reduce risk, with all major actions having been adopted by the Orica Kooragang Island Facility.

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10.2 Preliminary Hazard Analysis Overall Methodology 10.2.1 Scope The Project is designed to increase ammonium nitrate production capacity at the Orica Kooragang Island Facility by modification of the Ammonia Plant to increase ammonia capacity, an additional Nitric Acid Plant and an additional Ammonium Nitrate Plant. Associated works including upgraded ammonium nitrate storages will also be implemented.

The PHA is therefore required to assess the credible, potential hazardous events and corresponding risks to people, property and the biophysical environment, associated with the New Plant and Equipment and with completion of the Project at the Orica Kooragang Island Facility.

The PHA covers risks from:

• Process operations; • Receipt, transfer and storage of chemicals on site; • Liquid ammonia loading/unloading at the nearby port; and • Liquid ammonia pipeline transfers between the port and the site. Reasonably detailed design information for the upgrade to the Ammonia Plant, new Nitric Acid Plant and new Ammonium Nitrate Plant is available as this type of technology is currently used at the Orica Kooragang Island Facility or at other Orica ammonium nitrate (AN) facilities. However all design information including detail associated with changes to storages is of a preliminary nature. A Final Hazard Analysis report, which would be prepared if required as a Condition of Approval of the project, would include the effects of any changes to design parameters, configuration and layouts as a result of the project or which are required by future hazard studies such as HAZOPs.

10.2.2 Detailed Methodology In accordance with the approach recommended by DoP in HIPAP 6 (Guidelines for Hazard Analysis (DoP, 1992)), the underlying methodology of the PHA is risk-based; that is, the risk of a particular potentially hazardous event is assessed as the outcome of its consequences and likelihood.

The main steps in assessing the risks are:

• Hazard identification ( what type of undesired incidents could occur, based on the properties of the materials in the form in which they are stored and used at the Orica Kooragang Island Facility); • Consequence assessment (what would happen to people, property and the environment in the event of an undesired incident); • Selection of incidents which have offsite consequences (to eliminate the large number of minor incidents which have very localised effects); • Likelihood assessment (how likely each type of selected incident is to occur); • Calculation of risk for each selected incident; • Calculation of overall risks from all selected incidents; • Comparison of overall risks with the relevant criteria for each type of risk; and • Recommendation to reduce risks for any criteria which are not achieved.

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10.3 Risk Criteria The risk criteria applying to new developments in NSW are summarised in HIPAP 4, Risk Criteria for Land Use Safety Planning (DoP, 1992/2002). Criteria are defined for:

• Individual Fatality Risk (IFR); • Injury and Irritation Risk levels; and • Risk of Property Damage and Accident Propagation. 10.3.1 Individual Fatality Risk Criteria Individual Fatality Risk (IFR) is defined as the risk of death to a person at a particular point. Different groups of people have different levels of vulnerability and ability to take evasive action when exposed to hazardous incidents such as fires and toxic gas releases; accordingly different risk criteria are applied as given in Table 10-1, taken from HIPAP 4.

Table 10-1: Individual Fatality Risk Criteria (HIPAP 4 (DoP, 1992/2002)) Exposure Type Risk Levels

Hospitals, schools, child-care facilities and old age Half in a million per year housing developments (0.5 x 10-6 per year)

Residential developments and places of continuous One in a million per year occupancy (hotels/resorts) (1 x 10-6 per year)

Commercial developments, including offices, retail Five in a million per year centres, warehouses with showrooms, restaurants and -6 entertainment centres (5 x 10 per year) Ten in a million per year Sporting complexes and active open space areas (10 x 10-6 per year) Fifty in a million per year Industrial sites (50 x 10-6 per year)

The fatality risk to individuals from various activities in NSW, taken from HIPAP 4, is presented in Table 10-2 to provide a context in which the numerical risk criteria can be compared and to show the conservatism in the criteria against risk from various activities.

Table 10-2: Fatality Risks to Individuals in NSW (HIPAP 4 (DoP, 1992/2002)) Activities Risk Levels Transportation Risk (average to travellers) Travelling by motor vehicle 145 x 10-6 per year Travelling by Train 30 x 10-6 per year Travelling by aeroplane 10 x 10-6 per year Risks averaged over whole population Lightning Strike 0.1 x 10-6 per year Cancers (Total) 1800 x 10-6 per year Cancers (Lung) 380 x 10-6 per year

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Activities Risk Levels Pedestrian struck by motor vehicle 35 x 10-6 per year Being at home (accidents in the home) 110 x 10-6 per year Voluntary Risk (average to those who take the risk) Swimming 50 x 10-6 per year Playing rugby football 30 x 10-6 per year Owning firearms 30 x 10-6 per year

10.3.2 Injury Risk In the assessment of risk of injury and irritation from toxic exposure, a lower level of effect or exposure to toxic gas, thermal radiation and overpressure is applied compared to that used in IFR assessment. The HIPAP 4 criteria are summarised in Table 10-3.

Table 10-3: Injury and Irritation Risk Criteria (HIPAP 4 (DoP, 1992/2002)) Consequence Criteria Incident heat flux radiation at the residential and sensitive use areas should not Heat Radiation exceed 4.7 kW/m2 at frequencies of more than 50 chances in a million per year. Explosion Incident explosion overpressure at residential and sensitive use areas should Overpressure not exceed 7 kPa at frequencies of more than 50 chances in a million per year. Toxic concentrations in residential and sensitive use areas should not exceed a Injury risk from level which would be seriously injurious to sensitive members of the community exposure to toxic gas following a relatively short period of exposure at a maximum frequency of 10 in a million per year. Toxic concentrations in residential and sensitive use areas should not cause Irritation risk from irritation to eyes or throat, coughing or other acute physiological responses in exposure to toxic gas sensitive members of the community over a maximum frequency of 50 in a million per year.

10.3.3 Risk of Property Damage and Accident Propagation The assessment of impact of an event on the site propagating to the neighbouring industrial installations and hence initiating further hazardous incidents is also required primarily to determine whether there is any potential for a knock on or ‘domino effect’. The effect of thermal radiation and explosion overpressure are included in the assessment of property damage. The HIPAP 4 criteria are summarised in Table 10-4.

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Table 10-4: Property Damage & Accident Propagation Risk Criteria (HIPAP 4 (DoP, 1992/2002)) Consequence Criteria Effect Thermal Radiation Incident heat flux radiation at Thermal heat radiation of 23 neighbouring potentially hazardous kW/m2 may cause thermal stress installations or at land zoned to to unprotected steel with the accommodate such installations should potential for structural failure. not exceed a risk of 50 in a million per year for 23 kW/m2 heat flux level. Explosion Incident explosion overpressure at Explosion overpressure of 14 kPa Overpressure neighbouring potentially hazardous may damage piping and low installations, at land zoned to pressure equipment. accommodate such installations or at nearest public buildings should not exceed a risk of 50 in a million per year for the 14 kPa explosion overpressure level.

10.3.4 Societal Risk In the assessment of societal risk, multiple fatalities are considered instead of only single fatalities as in IFR. The same basic consequence calculations as used in IFR are used in the assessment of societal risk, where each incident outcome is considered in turn by combining the frequency (F) and the number (N) of people affected. The result is represented in the form of a Frequency-Number (FN) curve, which is a graph indicating the cumulative frequency (F) of killing ‘n’ or more people (N).

No specific criteria are defined for societal risk in the current edition of HIPAP 4 (DoP, 1992/2002), but general guidance is provided. In the PHA, societal risk guidelines published by the DoP in the draft revision to HIPAP 4 (DoP, 2008) were used for comparison with the societal risks estimated for the Project. These are presented in Table 10-5. The risks falling between the ‘intolerable’ and the ‘negligible’ bands are regarded as tolerable provided that they are As Low As Reasonably Practicable (ALARP), that is, the major risk contributors have been thoroughly reviewed and all practical risk reduction measures undertaken.

Table 10-5: Published DoP FN Curve Criteria (draft HIPAP 4 (DoP, 2008)) (Frequency of N or more Fatalities per year) As Low As Reasonably Intolerable Societal Negligible Societal Number of Fatalities Practicable (ALARP)Societal Risk Criteria Risk Criteria Risk Criteria Region between intolerable and 10 >1 x 10-4 <1 x 10-6 negligible Region between intolerable and 1000 >1 x 10-7 <1 x 10-9 negligible

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10.3.5 Criteria Applied to Developments on Existing Sites The risk criteria given in HIPAP 4 are applicable to “greenfield” sites, that is, new developments. They are therefore fully applicable to the “New Plant and Equipment” Case analysed in the PHA.

In the case of new developments on existing sites, risk criteria for the combined new plant and equipment and the existing operations need to be applied with consideration for “the tighter locational and technological standards applying now than at earlier times”. (HIPAP 4, Section 5 (DoP, 1992/2002)). This recognises the fact that older plants would often find difficulty in complying with current risk criteria, not just because of their technology, but also because of the proximity of other land uses which was permitted in the past. Full compliance with all current risk criteria for the totality of developments on an existing site may therefore not be practically attainable.

To resolve this issue, HIPAP 4 (section 5) (DoP, 1992/2002) identifies the critical risk criteria for application to the combined activities following completion of a development on an existing site:

“Intensification of hazardous activities in an existing complex accommodating a number of industries of a hazardous nature should only be allowed if the resultant 1 x10-6 [/yr residential] individual fatality risk level is not exceeded by the proposed facility and subject to cumulative risk threshold considerations.”

10.4 Hazard Identification 10.4.1 Hazardous Materials In order to prepare the PHA, it was first necessary to understand the hazards from the chemical materials at the site. The major hazardous materials with potential for offsite safety or environmental effects are listed in Table 10-6.

Table 10-6: Hazardous Materials - Orica Ammonium Nitrate Facility, Kooragang Island Main Class of Storage Hazardous Phase Dangerous Main Hazard(s) Produced / Used Quantity Material Good Changes Pipeline Feedstock for Natural Gas Gas Flammable Fire, explosion inventory only, ammonia production. no change Pipeline Intermediate for Hydrogen Gas Flammable Fire, explosion inventory only, ammonia production. no change Manufactured on site Reduced -from Toxic vapour; Pressurised and used for the maximum Anhydrous short-term liquid and Toxic production of nitric 183kL to ammonia environmental gas acid and ammonium maximum hazard nitrate. 100kL Manufactured on site Toxic vapour; and used for the Anhydrous Refrigerated short-term Toxic production of nitric No change ammonia liquid environmental acid and ammonium hazard nitrate, or exported. Toxic vapour, Solution of Aqueous short-term ammonia in Toxic End product No change ammonia environmental water hazard

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Main Class of Storage Hazardous Phase Dangerous Main Hazard(s) Produced / Used Quantity Material Good Changes Minor increase Intermediates Nitrogen Intermediate in process Toxic Toxic gas /byproducts in nitric oxides Gas inventory. No acid manufacture site storage. Produced in Nitric Chemical burn; Acid Plant and Increased from Solution in short-term consumed in maximum 2930 Nitric acid Corrosive water environmental Ammonium Nitrate t to maximum hazard Plant to produce 5022 t ammonium nitrate. Toxic fumes when heated; potential Solid for explosion if Ammonium Oxidising Agent granules involved in severe End product No change nitrate (not flammable) (prill) extended fire or badly contaminated Toxic fumes when heated; potential Increased from for explosion if Ammonium Solution in Oxidising Agent maximum 375 t involved in severe End product nitrate water (ANS) (not flammable) to maximum extended fire or 1375 t badly contaminated Toxic vapour; Pressurised Cooling water short-term Chlorine liquid and Toxic treatment in the No change environmental gas Ammonia Plant hazard Solution of Chemical burns; Caustic soda sodium short-term Corrosive Aid to manufacture No change solution hydroxide in environmental water hazard Chemical burns; Sulphuric short-term Liquid Corrosive Aid to manufacture No change acid environmental hazard

It should be noted that all these materials are currently present at the Orica facility. Of the materials mentioned above, incidents involving anhydrous ammonia, ammonium nitrate, nitrogen oxides, chlorine, natural gas and hydrogen were identified as having the potential for an offsite safety risk. Full details of the site processes involving these materials are provided in the PHA (Appendix H).

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10.4.2 Potentially Hazardous Incidents In accordance with the requirements of the DoP’s Guidelines for Hazard Analysis (HIPAP 6, (DoP, 1992)), it is necessary to identify hazardous incidents that could cause injury or fatalities to people, or damage to property or the biophysical environment from operations at the site.

Hazardous incidents include:

• Fires causing damage by heat radiation; • Explosions causing damage by overpressure; and • Toxic or environmentally hazardous materials escaping to the air, waterways or the ground. As recommended in HIPAP 6 (DoP, 1992), the PHA does not consider the effects of continuous or normal operating emissions to air or water. These are discussed elsewhere in the Environmental Assessment (see Sections 7 and 12, respectively).

Potential hazardous events for the Orica Kooragang Island Facility were identified through reviews of completed hazard identification exercises, reviews of similar processes at other Orica facilities, information from experienced Orica personnel, and historical incident reviews.

The large majority of the identified specific release scenarios of hazardous materials are caused by generic equipment failures, e.g. failures of vessels, pipes, etc. Information about these failures is taken from data collected on previous industrial events.

Other hazardous events can be caused by abnormal modes of operation, control system failure and human error. There are also external causes such as from natural events, malicious acts and neighbouring hazardous facilities.

The extensive Orica Safety Management System already in use at the Orica Kooragang Island Facility will cover the new plants to ensure that Orica’s high standards for safe operation and maintenance are maintained.

10.4.3 Risk Reduction Measures Adopted by the Project Many risk reduction measures for both existing and new equipment have been provided in the scope of the Project and are further described in the PHA.

Detailed consideration of operating methods and pipeline layouts has enabled the Project to propose reductions in inventories of pressurised liquid ammonia, despite the increased production of ammonia needed to supply two additional ammonia-consuming plants. The proposed design will also enable faster detection and isolation of any pressurised liquid ammonia leak sources.

There will not be an increase in on-site storage of solid ammonium nitrate despite the significant increase in ammonium nitrate production capacity. Solid ammonium nitrate storages have been modified to reduce the risks from a potential AN explosion.

The latest technology for process control and protection has been adopted on new plants and storages.

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In summary, the risk reduction measures which are proposed by Orica as part of the Project to reduce the site’s risk profile are as follows:

• Rationalise pressurised liquid ammonia storage and piping systems to reduce inventories and simplify isolation to minimise the potential quantity of ammonia released in an ammonia leak. • Implement additional ammonia detection and isolation systems to reduce the potential quantity released in an ammonia leak. • Reconfigure bulk ammonium nitrate storage arrangements through storage segregation to reduce the risk associated with the onsite bulk storage. • Reconfigure packaged ammonium nitrate storage arrangements including the withdrawal of timber pallets currently used in the store, to further reduce the likelihood of fires in storage areas. 10.5 Risk Assessment Results The combination of consequence of an outcome, such as injury or death, combined with the frequency (or likelihood) of an event gives the risk of an event. In order to assess the proposal, it is necessary to calculate the risk at a number of locations so that the overall impact can be assessed. The risk for each event is calculated according to:

Risk = Consequence x Frequency

Individual Fatality Risk is calculated accordingly as the risks to a person in the open from an event resulting in fatality. By convention in Australia, mitigation factors are not taken into account in the estimation of individual fatality risk. An individual is considered to be located permanently at a particular location, and no scope for shelter or escape is factored into the calculations. The risk results are essentially the risk at a location, not necessarily to a particular individual, and are therefore considered highly conservative.

The risk results are graphically represented in the form of risk contours. The contours represent points of equivalent risk level. The risk contours are overlaid on the site map of the Kooragang Island facility. The hatched areas on the maps represent residential areas.

10.5.1 New Plant and Equipment Risk Performance – Compliance with HIPAP 4 Risk Criteria Plots of IFR, Injury Risk, Irritation Risk and Property Risk for New Plant and Equipment are presented in Figure 10-1 to Figure 10-4. These can be compared against the HIPAP 4 risk criteria listed in Table 10-1, Table 10-3 and Table 10-4.

Figure 10-1 plots the IFR contours for the proposed New Plant and Equipment. It can be seen that the 0.5x10-6 per annum IFR contour does not extend to any sensitive areas and the 1x10-6 per annum IFR contour does not extend to the nearest residential area. The 50x10-6 per annum IFR contour remains within the site boundaries. Other IFR contours also remain within the KI industrial and port areas. The plotted contours thus demonstrate that the IFR for the New Plant and Equipment case fully complies with the NSW HIPAP 4 IFR criteria.

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Figure 10-2, Figure 10-3 and Figure 10-4 plot the Toxic Exposure Injury Risk, Toxic Exposure Irritation Risk and Overpressure Injury Risk for New Plant and Equipment respectively. The Overpressure Risk is primarily associated with the production, storage and handling of ammonium nitrate and ammonium nitrate solution onsite. The injury and irritation risks from toxic gas are primarily associated with the distribution of ammonia to the new plants and nitrogen dioxide in the new plants. A plot of Injury Risk relating to thermal radiation is not shown as although ammonia present in the New Plant and Equipment is flammable, there is no injury risk contour at the HIPAP 4 criterion associated with it due to its limited flammability. All plots show that the criteria contours do not extend into residential areas and hence fully comply with the NSW HIPAP 4 Injury and Irritation risk criteria.

Figure 10-5 plots the risk contour for property damage and propagation relating to overpressure for New Plant and Equipment. The property damage and accident propagation risks from overpressure are primarily associated with the production, storage and handling of ammonium nitrate and ammonium nitrate solution onsite. Similar to injury risk, there is no risk contour associated with thermal radiation for the HIPAP 4 criterion due to the limited flammability of ammonia. Figure 10-5 shows the 14 kPa overpressure damage and propagation risk contour of 50 x 10-6 per annum extends marginally offsite to the south into the Patrick Logistic storage facility. This facility does not contain a potentially hazardous installation. This contour does extend slightly offsite to the east but does not reach potentially hazardous developments or the nearest public building which is located in Stockton. As this contour does not extend into industrial areas zoned for potentially hazardous installations or to the nearest public building, the New Plant and Equipment meets the requirements of HIPAP 4 for overpressure damage and propagation risk.

The assessment of societal risk showed that the incidents associated with the New Plant and Equipment does not result in fatalities at the residential areas, hence there is no plot of FN-curve.

In summary, the PHA found that the New Plant and Equipment complies with all IFR, Injury Risk, Irritation Risk and Property Risk criteria in HIPAP 4 (DoP, 1992/2002).

10.5.2 Project Risk Performance – Compliance with HIPAP 4 Risk Criteria The Project Case is defined as the new plant and equipment, modifications to existing plants, and the existing site operations, i.e. the total future site risk profile after completion of all proposed work.

As noted above, Section 5 of HIPAP 4 (DoP, 1992/2002) states: “Intensification of hazardous activities in an existing complex accommodating a number of industries of a hazardous nature should only be allowed if the resultant 1 x10-6 [/yr residential] individual fatality risk level is not exceeded by the proposed facility and subject to cumulative risk threshold considerations.”

Figure 10-6 plots the individual fatality risk for the Project Case and shows that the individual fatality residential risk criteria (1 x10-6 /yr) does not reach the nearest residential area.

To demonstrate the cumulative risks from the Project Case, Figure 10-7 plots the societal risk curves for the Project Case and shows that the societal risk for the Project is within the ‘negligible’ region of the societal risk criteria proposed in the draft revised HIPAP 4 (DoP, 2008).

Hence the Project complies with the two identified risk criteria in HIPAP 4 for additional hazardous plants on a site with “existing industries of a hazardous nature”.

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10.5.3 Project Risk Performance – Comparison with 1992 Study and Current Operations In 1992 a risk assessment study was undertaken by the NSW Department of Planning (DoP) for the area of Newcastle and Kooragang Island covering a number of industrial facilities to identify, analyse and assess hazards and risk to people and the environment from each facility and from the whole area. The study culminated in a public report Newcastle Kooragang Island Risk Assessment Study, NSW Department of Planning, 1992 (DoP, 1992b). The report contained individual fatality risk and societal risk contours associated with the Orica (then Incitec) Kooragang Island Facility. The study also resulted in a series of recommendations for the purpose of risk reduction.

The DoP Risk Study (DoP, 1992b) results for individual fatality risk and societal risks are given in Figure 10-8 and Figure 10-10 respectively. The results have been replotted on the same base map and F-N chart scale to enable comparison with the results of the Project Case in Figure 10-6 and Figure 10-7. Also shown in Figure 10-9 and Figure 10-11 are the IFR contours and societal risk curve for current operations today (Current Operations). These plots are provided to enable comparison for IFR and societal risk between the 1992 study, current operations and the proposed future operations (Project Case).

The comparison of the IFR figures for the 3 cases (Figure 10-8, Figure 10-9 and Figure 10-6 show that there is a significant reduction in the extent of the IFR contours between the 1992 Study and the current site operations, and further reduction through implementation of the Project (Project Case).

The reduction in the risk contours between the Current Operations and the 1992 Risk study is primarily a result of implementation of the risk reduction measures agreed in 1993 between the site and DoP as an outcome of the 1992 Study. Refer to Appendix H for further detail.

The further reduction in the extent of fatality risk contours between the Project Case and Current Operations, despite the introduction of new plant and equipment, results primarily from the risk reduction measures proposed to be undertaken to the existing facility as part of the proposed expansion. These are summarised in Section 10.4.3.

The comparison of the Societal Risk F-N curves figures for the three cases (Figure 10-10, Figure 10-11 and Figure 10-7) show that again there is a significant reduction in societal risk between the 1992 Study and the current site operations (Current Operations), and further reduction through implementation of the Project (Project Case).

The reductions in individual and societal risks show the significant benefit which the completion of this Project can provide.

10.5.4 Risks to the Biophysical Environment The main concern associated with the assessment of risk to the biophysical environment is potential effects on the short term or long term viability of the ecosystem or species populations.

The Orica facility is situated on a promontory on the south eastern corner of Kooragang Island and is adjacent to the north and south arms of the Hunter River. The site was formed through land reclamation activities and is highly modified, with the area of the site and surrounding land zoned for use as port and industrial related activities. There is no remnant vegetation present in this section of the island and the land directly adjacent to the site does not support any threatened or endangered species or ecological communities. The site is located approximately 1.5 km south of the Hunter Estuary National Park. Sections of the park are a declared RAMSAR site and also subject to two international treaties on migratory birds. The Hunter River estuary functions as a port and recreation area. In addition, sections of the river, such as the North Channel and Fullerton Cove, are utilised by a small number of oyster farming operations. Recreational fishing occurs throughout the Hunter River estuary.

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The PHA considered the potential impact of the various hazard scenarios on the biophysical environment surrounding the Orica operation. Harm to the biophysical environment could potentially occur as a result of an accidental release of one of the toxic materials, an explosion involving ammonium nitrate or from thermal radiation involving a large fire at the Orica facility.

The potential hazard scenarios identified included:

• Release of ammonia from the facility or during ship loading/unloading operations • Release of nitric acid from the facility • Release of chlorine from the facility • Explosion and fire involving ammonium nitrate • Discharge of nitrogen to the environment via surface water and groundwater • Thermal radiation as a result of a fire • Contamination of soil as a result of storage and handling of materials The review of the risks associated with these scenarios can be found in the PHA (Appendix H). The review of risks to the biophysical environment as a result of the new plant and equipment indicate that there will be no increase in the level of risk and, as a result of the implementation of additional control measures proposed in the expansion project, risk should actually be reduced.

10.6 Conclusions & Recommendations A Preliminary Hazard Assessment (PHA) has been prepared for the proposed expansion of the Orica Kooragang Island Facility in accordance with Hazardous Industry Planning Advisory Paper No. 6 – Guidelines for Hazard Analysis (HIPAP 6 (DoP, 1992)) and using the criteria contained within Hazardous Industry Planning Advisory Paper No. 4, Risk Criteria for Land Use Safety Planning (HIPAP 4 (DoP, 1992/2002)). The full PHA can be found in Appendix H.

The risks associated with the proposed New Plant and Equipment at the Orica Kooragang Island Facility have been assessed and compared with DoP HIPAP 4 (DoP, 1992/2002) risk criteria for Potentially Hazardous Development. The results of this assessment show that the New Plant and Equipment risks comply with all the HIPAP 4 criteria for individual fatality, injury, irritation and societal risk.

The Project (comprising all site operations after completion of the proposal) was assessed against the HIPAP4 criteria for intensification of hazardous activities on an existing site. These are individual risk at the nearest residential area (1 x 10-6/yr) and societal risk (criteria proposed in draft revised HIPAP 4 (DoP, 2008)). The Project also complies with these criteria.

The primary reason for the low risk levels associated with the Project is that further significant efforts have been made to reduce risk both in the existing plant and in the new plant, by reducing both likelihood and consequential impacts from potential hazardous events. The main contributors to risk reduction are:

• Reductions in hazardous inventory of pressurised liquid ammonia; • Faster detection and isolation of any leaks from pressurised liquid ammonia inventories; • Risk reduction measures for the storages of ammonium nitrate; and • Adoption of latest technology for new installations of process control and protection.

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• The PHA makes the following recommendations to validate the PHA and further reduce risk: • Review the process parameters post commissioning of the Project and confirm the values used in the Quantitative Risk Assessment (QRA) to ensure consistency. • Review the use of liquid chlorine for cooling water disinfection on site and consider replacing it with a less hazardous aqueous biocide or implementing an automated shutoff system for chlorine dosing designed to reduce the duration of chlorine leaks due to a failure of the dosing equipment. • Investigate additional engineering risk controls for ammonia truck loading, including automatic shutdown if a leak is detected and additional drive away protection measures. • Continue efforts to determine if there are further opportunities to reduce the risks associated with ammonium nitrate explosions.

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Source: GHD (2009)

G:\Jobs\S6\S60600_S60699\S60653\EA\S6065303 F10.1 21 04 2009 Note: Hatching Denotes Residential Areas Figure 10.1 Individual Fatality Risk Contours (New Plant and Equipment) Orica Australia Pty Ltd Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

Source:GHD (2009)

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Note: Hatching Denotes Residential Areas Figure 10.2 Toxic Injury Risk (New Plant and Equipment) Orica Australia Pty Ltd Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

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Source: GHD (2009)

G:\Jobs\S6\S60600_S60699\S60653\EA\S6065303 F10.3 21 04 2009 Note: Hatching Denotes Residential Areas Figure 10.3 Toxic Irratation Risk Contours (New Plant and Equipment) Orica Australia Pty Ltd Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

Source:GHD (2009)

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Note: Hatching Denotes Residential Areas Figure 10.4 Overpressure Injury Risk Contour (New Plant and Equipment) Orica Australia Pty Ltd Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

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G:\Jobs\S6\S60600_S60699\S60653\EA\S6065303 F10.5 28 04 2009

Source: GHD (2009)

Note: Hatching Denotes Residential Areas Figure 10.5 Overpressure (Property Damage) Risk (New Plant and Equipment) Orica Australia Pty Ltd Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

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Source: GHD (2009)

G:\Jobs\S6\S60600_S60699\S60653\EA\S6065303 F10.6 28 04 2009 Note: Hatching Denotes Residential Areas Figure 10.6 Individual Fatality Risk Contours (Project Case) Orica Australia Pty Ltd Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

Source: GHD (2009)

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Figure 10.7 Societal RiskF-NCurve (Project Case) Orica Australia Pty Ltd Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

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Source: GHD (2009)

G:\Jobs\S6\S60600_S60699\S60653\EA\S6065303 F10.8 28 04 2009 Note: Hatching Denotes Residential Areas Figure 10.8 Individual Fatality Risk Contours (1992 Study) Orica Australia Pty Ltd Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

Source:GHD (2009)

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Figure 10.9 Individual Fatality Risk Contours (Current Operations) Orica Australia Pty Ltd Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

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Source: GHD (2009)

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Figure 10.10 Societal RiskF-NCurve (1992 Study) Orica Australia Pty Ltd Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

Source: GHD (2009)

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Figure 10.11 Societal RiskF-NCurve (Current Operations) Orica Australia Pty Ltd Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

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11.0 Traffic

11.1 Existing Road Network The Orica site is located on Kooragang Island, and is bounded by Heron Road along its western boundary and Greenleaf Road on its eastern boundary as shown in Figure 11-1. Vehicle access to the site is provided directly off Greenleaf Road. There are several gated access points on Heron Road

The main access between Kooragang Island and Port Stephens from Newcastle is the use of Cormorant Road and Teal Street, which are part of the designated Main Road 108 or route 121. Teal Street connects to the Stockton Bridge crossing the Hunter River North Arm while Cormorant Road joins Tourle Street at the bridge crossing of the Hunter River south arm. Tourle Street connects with Industrial Drive at a signal controlled T intersection about 500m south of the Hunter River.

Cormorant Road is a two lane two way road for much of its length across Kooragang Island. From the vicinity of Egret Street to the Teal Street Roundabout it becomes a four lane two way road. Teal Street is a divided carriageway four lane road. It operates under a posted speed limit of 80 km/h in the general vicinity and does not provide any pedestrian facilities and only limited cyclist facilities.

Greenleaf Road connects with Teal Street via grade separated slips. Greenleaf Road provides a typical industrial road standard, with an overall width in the order of 15 m. It provides a single lane of travel in both directions and provides access to a number of industrial users along its length, with the major user being the existing subject site.

Cormorant Road through to beyond Fullerton Cove to the north and south-west to Industrial Drive is an approved B-Double route. All of the roads within the Kooragang industrial area are approved for B- Double use, including all of the roads that will be used as part of the subject development.

11.1.1 Traffic Volumes Peak period data at the Cormorant Road / Teal Street roundabout indicate that peak periods occur between 7.30 and 9.30 am and 3.30 and 6.30 pm. The peak hour counts were consistent with earlier data in terms of peak trends. An assessment of current level of service (LOS) for the surrounding road network was undertaken using the RTA’s Guide to Traffic Generating Developments (RTA, 2002). The LOS provides an indication of the traffic efficiency and is used as the performance standard. When considering a development proposal, the objective is to maintain the existing LOS. This is a qualitative assessment of the quantitative effect of factors such as speed, volume of traffic, geometric features, traffic interruptions, delays and freedom to manoeuvre.

There are six levels of service (LOS), as described below, from AUSTROADS Guide to Traffic Engineering Practice – Part 2: Roadway Capacity (AUSTROADS, 1988).

• Level of Service A. A condition of free flow in which individual drivers are virtually unaffected by the presence of others in the traffic stream. Freedom to select desired speeds and to manoeuvre within the traffic stream is extremely high, and the general level of comfort and convenience provided is excellent. • Level of Service B. This level is in the zone of stable flow and drivers still have reasonable freedom to select their desired speed and to manoeuvre within the traffic stream, although the general level of comfort and convenience is little less than that of the level of Service A.

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• Level of Service C. This service level is also in the zone of stable flow, but most drivers are restricted to some extent in their freedom to select their desired speed and to manoeuvre within the traffic stream. The general level of comfort and convenience declines noticeably at this level. • Level of Service D. This level is close to the limit of stable flow but is approaching unstable flow. All drivers are severely restricted in their freedom to select their desired speed and to manoeuvre within the traffic stream. The general level of comfort and convenience is poor, and small increases in traffic flow will generally cause operational problems. • Level of Service E. This occurs when traffic volumes are at or close to capacity and there is virtually no freedom to select desired speeds or to manoeuvre within the traffic stream. Flow is unstable and minor disturbances within the traffic stream will cause a traffic-jam. • Level of Service F. This service level is in the zone of forced flow. With it, the amount of traffic approaching the point under consideration exceeds that which can pass it. Flow break-down occurs and queuing and delays result. The hourly two way traffic volumes and capacity of the roads in the vicinity of the subject site are given in Table 11-1 below.

Table 11-1: Existing Traffic Volumes Traffic Flows (vehicles per Level of Level of Road Location hour) Capacity Service* Service* (am) (pm) am pm West of roundabout 753 1354 2800 A B Cormorant eastbound Road East of roundabout 1452 1364 2800 C B westbound North of roundabout 748 1483 2800 A C northbound Teal Street North of roundabout 1429 1212 2800 C B southbound Northbound 982 1398 1400 E E Tourle Street Southbound 1269 1272 1400 E E *Level of service: AUSTROADS Guide to Traffic Engineering Practice – Part 2: Roadway Capacity (AUSTROADS, 1988).

Arterial road access to Kooragang Island is generally operating at satisfactory service levels. Traffic congestion is the greatest on the two lane arterial section of Cormorant Road approaching the two lane section of Tourle Street Bridge, operating at Level of Service ‘E’. When considering the operational environment of this road, with access generally controlled so that turning movements are limited, then the typical lane capacity quoted for Level of Service ‘E’ is satisfactory at peak times. It should be noted that the RTA has effectively ratified this operational level as satisfactory in its recent planning and implementation of the replacement of the Tourle Street Bridge as a two lane road operating under these flow conditions. The two lane bridge has been considered adequate for current and future flows, with the situation to be reviewed at some time in the future.

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Whilst no specific traffic surveys have been completed at the intersection of Teal Street and the ramps to Greenleaf Road, observations on site indicate that existing traffic flows in and out of Greenleaf Road at this location are very low, with the vast majority of the traffic movements at this location associated with the existing use on the subject site.

The local industrial road network that provides access to the subject site is currently operating well within its technical and functional capacity levels.

A review of historic traffic flows indicates that traffic flows along this route have been steadily increasing over the last 10 years. For the purposes of the traffic assessment, it was assumed that the background traffic growth along this route is in the order of 2.5% per annum, to ensure robustness of the assessment.

11.1.2 Intersection Performance Intersection performance was assessed using the SIDRA computer modelling program. SIDRA calculates the amount of delay to vehicles using an intersection, and gives a level of service rating which indicates the relative performance of that intersection treatment. Levels of service of A to C are considered to be satisfactory, a level of service of D is acceptable, and levels of E and F are considered unsatisfactory. SIDRA also calculates the degree of saturation, which indicates the amount of spare capacity available. Traffic flows on the local industrial road network, for example at the Heron Road / Cormorant Road intersection, are within the free flow limits of Austroads guidelines and hence no analysis has been included for these intersections.

At the Cormorant Road / Teal Street intersection, data has been drawn from observations during peak traffic flow surveys (June 2007). Using approach flows, a series of calculations using SIDRA were performed to assess the likely operational characteristics of this roundabout. The calculations are based on a roundabout with two lane circulating flow on the arterial road legs of the junction. A detailed summary of results is included in Appendix I.

Based on the results of the SIDRA model, existing conditions indicate that the nearby roundabout intersection is operating well within its technical capacity limits with significant spare capacity. An analysis for the future design year of 2018 was also completed, assuming 25% growth on the base year of 2008. Based on this growth factor, the roundabout will continue to provide adequate capacity for the traffic flows, with a minimum Level of Service of B maintained.

The roads in the vicinity of the subject site fall into two general categories, the local industrial access roads, and the arterial road Main Road 108 across Kooragang Island. Based on the observed traffic data, Egret Street, Heron Road, Cormorant Road and Greenleaf Road in particular east of the Teal Street Roundabout and in the vicinity of the subject site are lightly trafficked and well within acceptable limits when compared to their traffic carrying capacity.

The level of traffic use of the Main Road 108 route across Kooragang Island is more heavily utilised, however it is within its technical capacity limits.

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11.2 Existing Operations 11.2.1 Staff Movements There are currently some 260 employees on site (150 Orica and 110 contractors) with approximately 210 personnel on site during normal working hours. Given the site operates 24 hours per day there are a number of shift rosters with shift changeovers at 6:30 AM and 6:30 PM for the Ammonia Plant, and 10:00 AM and 10:00 PM for the Nitrates plant. Outside of normal operating hours there are typically 20 staff on site. More specifically, staff currently arrive on site between 6:00 AM and 8:00 AM for the 6.30 AM start for the Ammonia Plant and 7:00 AM to 8:00 AM start for day operations. The majority of staff would depart site between 3:00 PM and 4:30 PM from day operations. The Ammonia shift staff (5 staff) and Nitrates shift staff (6 staff) would depart at 6:30 PM and 10:00 PM respectively.

Existing parking is provided between a mixture of on-site and on road.

11.2.2 Product Delivery and Dispatch Currently, there are some 133 trucks inbound and outbound per weekday associated with the current operations on site. The trucks are a mixture of B-Doubles (17%), truck and dog trailer (23%) and single trailer units (60%). There are currently 27 trucks inbound and outbound per day on weekends.

Site access is currently provided via the main site access point on Greenleaf Road (Figure 11-1). The access point on Greenleaf Road provides separate vehicle access points for light vehicles and laden trucks carrying materials. This allows for separation of vehicle types as well as on-site weighing of the trucks.

Finished products are dispatched via Cormorant Road to access Industrial Drive. Road vehicles exit the site via Greenleaf Road, then turn left onto Teal Street, then continue along Cormorant Road. Inbound truck movements are the opposite, with trucks turning off Teal Street and using the off ramp to connect with Greenleaf Road.

11.3 Potential Impacts The expanded facility has the potential to impact traffic during the construction phase and the operational phase as further detailed below.

11.3.1 Construction The construction phase is anticipated to commence following the necessary approvals and span approximately 28 months. During this period, potential impacts to traffic may include:

• Increases in traffic movements from construction vehicles and material deliveries; • Increases in traffic from construction personnel to the surrounding road network, particularly during periods of peak traffic; and • Pressure to parking availability on-site for construction personnel vehicles and construction vehicles. These are further discussed below.

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Construction Material Deliveries

Construction would require a significant volume of material to be delivered to the site, however this would vary throughout the construction phase. This traffic is predicted to be up to 30 trucks per day. During critical stages, such as during concrete pours, there may be a number of concrete trucks accessing the site over a short period, however, the remainder of the supplies would be delivered over a number of hours and days, reducing the overall impact. There may also be up to 30 large deliveries to the site over the duration of the construction as detailed in Appendix I. Overall, it is considered that the impact of the materials delivery vehicles would be acceptable upon the existing traffic movements along Cormorant Road and Teal Street.

Staff Movements

During construction, the total workforce would vary between 50 to 250 personnel (see details in Appendix I). Construction activities would generally commence at 7.00 am, with a majority of workers expected to be sourced from the Newcastle area. As such, a majority of the construction workforce would travel along Cormorant Road, turn left into Teal Street, and then left into Greenleaf Road via the exit ramp. Access to and from the construction site may be via the main gate on Greenleaf Road and Fifth Avenue. Alternate access arrangements would depend upon the final location of the construction facilities.

Construction on site is scheduled to start at 7.00 am and as such, the majority of traffic would arrive at the site before 7.00 am. The majority of this traffic will be travelling against the dominant direction of traffic flow along Cormorant Road. A review of the traffic data on the Stockton Bridge provided by the RTA count station shows that traffic flows are lower prior to the peak observed at 7.30 to 8.30 am. Assuming the 7.00 am start, a majority of construction staff would finish on site by 5 pm, as per normal construction hours.

It is considered that the impact of this traffic flow will be acceptable upon the existing traffic movements along Cormorant Road. The flow associated with the construction will generally occur before the normal peaks along the adjacent road network and the construction traffic volume will vary throughout the construction process. Whilst the peak is expected to be some 250 staff, at other times the number of people working on site could be much lower, especially at start up and finish periods. With the construction expected to occur over a period of approximately 28 months, it is considered that any additional delays created by this construction work will be temporary and acceptable to road users.

It is noted that the current construction work associated with the upgrade of the Tourle Street Bridge should be completed by the middle of 2009, prior to the construction of the subject development is anticipated to commence, thus minimising potential cumulative impacts on traffic.

There is anticipated to be up to 250 construction personnel on site at the peak of construction. The large increase in personnel at the site has the potential to increase pressure on parking availability on the site. Additional car parking would be provided for construction personnel. There are ongoing investigations for additional space adjacent to the main Orica site to be leased during the construction period for the construction facilities, including additional parking requirements (refer to Section 3.15).

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11.3.2 Operation Potential impacts to traffic associated with the operation of the plant expanded would include:

• Increased pressure on road network performance as a result of increased staff movements; • Increased pressure on road network performance as a result of increased truck movements for delivery of materials and dispatch of products; • Increased pressure on intersection performance associated with increased vehicle movements; • Increased pressure on the site access associated with the increase in vehicle movements; and • Increased pressure on car parking availability on site for the additional personnel. These potential issues are further discussed below.

Staff Movements

The expanded facility would employ up to 54 additional persons, with 48 attending the site in any given 24 hour period. Due to the relative remoteness of the site and the lack of public transport, it is considered that all of the staff would drive to the site.

Shift times would remain similar to current operations once the uprate is completed. i.e. staff would arrive on site between 6:00 AM and 8:00 AM for the 6.30 AM start for the Ammonia Plant and 7:00 AM to 8:00 AM start for day operations. The majority of staff would depart site between 3:00 PM and 4:30 PM from day operations. The Ammonia shift staff (5 staff) and Nitrates shift staff (6 staff) would depart at 6:30 PM and 10:00 PM respectively. A summary of the increases in vehicle movements associated with the operation of the expanded facility is provided in Table 11-2. Assuming a reasonably well spread out movement of cars across the peak period, a typical increase of 10 - 13 cars per hour during the peak period is anticipated.

It can be seen that the development will not generate high volumes of traffic during the critical peak periods on the adjacent road network. As per normal industrial activities, the start/finish times for staff do not all fall within the normal peak travel times on the adjacent road network, with only 45% of staff arriving and departing within the normal peak travel times. Of the 45% travelling within the peak travel times, the timing of arrivals and departures is relatively staggered due to the various start and finish times for shift and day operations. Based on the current LOS on the surrounding road network, additional staff movements are not anticipated to affect levels of traffic movement surrounding the site. As such, the additional vehicle movements would not have significant impacts on the surrounding traffic network. In addition the staff traffic is generally against the maximum peak flow of traffic.

There are a number of industrial areas within the Newcastle location that operate in this manner, and a number of users in the general locality of the subject site operate in this manner. The peak times on the adjacent road network are between 7.30 and 9.00 AM and then 3.30 to 6.00 PM. The shift times on site do not coincide with these times, and the remainder of start and finish times vary across the peak period.

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Table 11-2: Summary of traffic movements during operation of the facility Vehicles Existing Future Additional 218 per day 266 per day 48 per day Cars 96 cars during peak periods, 118 during peak periods, 22 during peak periods, typically 43- 57 per hour one typically 53-60 per hour one typically 10-13 per hour one way way way 133 per day, typically 13-14 196 per day, typically 19-20 63 per day, typically 6-7 per Trucks per hour two-way per hour two-way hour two-way

Product Delivery and Dispatch

The facility would require additional road transport for delivery of materials inbound and for the distribution of the finished product. The number of trucks for the expanded facility is expected to increase to approximately 196 trucks per day entering and exiting, with up to 33 - 34 B-Double trucks (additional 10 - 11 per day), 45 truck and dog trailers (additional 14 per day) and 118 semi trailers per day (additional 38 per day) anticipated to arrive at the site. Weekend truck movements would be 36 per day (from 27 per day currently).

Assuming a reasonably well spread out movement of trucks in and out of the site for materials product dispatch, it is anticipated that the site could generate some 19 to 20 truck movements per hour during the working week (an increase of 6 or 7 trucks per hour) and considerably less on weekends (see Table 11-2).

Inbound trucks would enter through a new site entrance on Greenleaf Road and cross a weighbridge within the site before parking and loading within designated loading/unloading areas. Trucks would depart via a new site access point on Heron Road. These access points would be at the southern end of the site (refer to Figure 11-1). Pending final layout reviews, they may be condensed to a single entrance/exit on Greenleaf Road.

Whilst the Facility is not currently transporting product by rail, there are current investigations into the resumption of rail for transporting materials. There is existing rail infrastructure, including a siding on site, that in the past has been used for product dispatch from the Orica facility. The use of the rail would require maintenance and repair works to the existing railway infrastructure in addition to approvals from the relevant rail authorities and users. The resumption of the railway line for product dispatch of bulk AN for the domestic market would significantly reduce the volume of material transported by road, thereby reducing the number of vehicles on the road.

Cargo ships are currently utilised for the transport of Nitropril and Opal™ products. The use of cargo ships for product dispatch is anticipated to continue at approximately the same cycle and methods that currently apply, however, there may be a slight increase in shipping in the early years following the plant expansion as surplus Nitropril® is exported. As such, the volume of material transported by road, and consequent traffic movements, would be reduced if volumes of materials transported by cargo ships are increased.

However, for the purposes of the traffic assessment for this EA, a worst case scenario has been considered, assuming that all material would be carried on road based vehicles.

The overall levels of hourly traffic movement to and from the site are anticipated to have a minimal effect on the traffic flows on the main road system during the critical peak periods. Additional traffic flows during the peak periods on the adjacent road network are likely to be very low. Peak hour flows could be in the order of an additional 6 or 7 truck movements (in and out) per hour, associated with material dispatch.

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Table 11-1 indicates that the current road network is operating within acceptable limits and the additional 6 to 7 trucks per hour and 10 – 13 cars per hour during the peaks in both directions will have little, if any, impact. The additional vehicle movements per hour per direction represents a very minor increase in traffic movements (less than 2%) and will have little if any noticeable impact on delays and congestion for existing road users.

Intersection Performance

The roundabout junction of Heron Road with Cormorant Road is designed to cater for heavy vehicle movements, and with movements planned during the peak and off peak periods the junction will remain well within its technical capacity. Based on the available approach volume data for the junction no discernable change is expected with operations still well within technical capacities of a two lane roundabout. This applies particularly to the non peak periods when most movements associated with this proposal would occur i.e. shift start and finish times.

The additional 6 to 7 truck movements exiting on Teal Street to head west along Cormorant Road via the roundabout to head towards the Hunter Valley would have little if any impact upon the operation of this roundabout. The inbound truck movements will similarly have a minimal impact upon the capacity of this roundabout, due to the high level of service this roundabout provides for all road users. This is true for both the current design year and the future 2018 design year, allowing for 25% growth in background traffic flows on the arterial road network.

Site Access

Two new access points are planned to be provided for the site to enable smooth one-way traffic flow through the site. The location of the entrance point would be immediately south of the main administration area on Greenleaf Road. The location of the exit point would be at the southern end of the Orica facility on Heron Road. These are shown in Figure 11-1. This will include the provision of new weighbridges and associated security gates, etc. The access points are on straight sections of road and will ensure that visibility for vehicles entering and exiting the site will be in accordance with the relevant Australian Standards. The design of the new access points will cater for the swept paths movements associated with B-Double use, as per the existing operations on site. The detailed design of these access points will be in accordance with relevant Council and RTA guidelines.

The access points will enable more efficient control and movement of trucks onto site. An electronic security gate will control access of drivers to the site. The existing light vehicle access point on Greenleaf Road to the north of the administration would be retained for light vehicles, store deliveries and maintenance vehicles. It is anticipated that the existing heavy vehicle access point at the northeast end of the site will be closed.

It is considered that nearly all of the finished product will head via Cormorant Road to access Industrial Drive, as per the existing situation. Road vehicles would exit the site via Heron Road driving north towards the Cormorant Road roundabout. Inbound truck movements would turn off Teal Street and use the off ramp to connect with Greenleaf Road.

Observations on site show that the existing traffic flows on these sections of Greenleaf Road and Heron Road are very low, well under 80 vehicles per hour two-way. The vast majority of traffic movements are associated with the subject site with little through traffic movements. It is considered that the existing and proposed site access points will provide an appropriate and acceptable layout.

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Parking

As part of the expansion of the site, there will be up to 48 additional staff over a 24 hour period. Given the location of the site together with the shift times, it is considered that all of the additional personnel will drive to the site and as such will require parking facilities. Investigations are underway to determine whether existing parking facilities (i.e. mixture of on-site and on road) are sufficient to accommodate the additional personnel or whether additional car parking would need to be provided on site. Modifying the layout of the existing car parking arrangements may be sufficient to accommodate additional staff vehicles.

11.4 Safeguards 11.4.1 Construction The following safeguards would be implemented on-site, where possible, to minimise potential impacts to the surrounding road network during the construction phase of the development:

• The provision of additional temporary car parks; • The movement of oversized loads to the site in accordance with the standard procedures documented by the RTA and appropriate approval from the RTA. 11.4.2 Operation The following safeguards would be implemented during the operational phase of the development to minimise potential impacts to the surrounding road network:

• Provision of adequate car park facilities to cater for the additional 54 staff anticipated; and • Development of new site access points to ensure additional traffic movements are catered for, especially for the larger vehicles associated with materials movement (B- Doubles). 11.5 Conclusion The proposal is not likely to result in significant impact on the road network surrounding the site. General road performance levels would remain unchanged and well within technical intersection and road capacities. The SIDRA analysis for the key roundabout controlled intersection of Teal Street and Cormorant Road shows that the intersection provides a high level of service for all road users with minimal delays. The analysis for the future design year, with a 25% increase in background traffic movements, confirms that this roundabout will continue to operate well over the 10 year review period. The performance of all other intersections will remain essentially unchanged and at satisfactory service levels.

During the construction period, potential impacts to traffic flows are considered to be acceptable and any potential additional delays created by this construction work will be temporary and acceptable to road users

During operation, the additional 6 or 7 trucks per hour and 10-13 cars per hour during the peaks in both directions will have minimal impact on the surrounding road network. The additional vehicle movements per hour per direction represents a very minor increase in traffic movements (less than 2%) and will have little if any noticeable impact on delays and congestion for existing road users, in addition to the movement of cars generally being against the peak traffic flow. As such, the additional vehicle movements would not have significant impacts on the surrounding traffic network, provided the safeguards are implemented.

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Newcastle Airport/Port Stephens

G:\Jobs\S6\S60600_S60699\S60653\EA\S6065303 F11.1 28 04 2009

Hunter Estuary National Park Approved B-Double Route Private road

Kooragang Coal Loader

Cormorant Rd Hunter River (South Arm) Tourle St Bridge Raven St

St Curlew St

Egret

Teal St

Kooragang Berths 4, 5 & 6

HERON ROAD MAYFIELD GREENLEAF ROAD

Site Location Kooragang Berths 1, 2 & 3

New Truck Exit Point New Truck Entrance Point

STOCKTON

Figure 11.1 Approved B-Double Routes Orica Australia Pty Ltd Environmental Assessment 0 1km Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

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12.0 Surface Water Quality

12.1 Introduction STORM Consulting Pty Ltd (STORM) was engaged to prepare a water management assessment of existing and proposed operations at the site, consisting primarily of stormwater and effluent management. This section provides a summary of the report, which is provided in full in Appendix J.

12.2 Existing Environment 12.2.1 Stormwater The site is divided into seven separate catchment areas which discharge to the Hunter River as follows (see Figure 12.1):

• Catchments 1, 2 and 3 include the Ammonia Plant and existing Cooling Towers, as well as open space with grassed areas; • Catchment 4 contains much of the existing Nitrates manufacturing facilities including the Ammonium Nitrate Plants and Nitric Acid Plants; • Catchment 5 has a relatively low-level of activity and contains part of the Bulk Store, with some hardstand areas as well as open grassed areas. • Catchment 6 contains the Bag Store and some hardstand areas as well as open grassed areas. • Catchment 7 contains a container storage area, with the remainder predominantly a greenfield area. This catchment is not serviced by any collection infrastructure and stormwater infiltrates through the greenfield area. Stormwater from Catchments 1, 2 and 3 discharges directly offsite due to the low potential for contaminants in these areas. However, Catchments 4, 5 and 6 are managed via the capture of the ‘first flush’ stormwater flows, which are designed to capture the first 10mm of runoff generated from roof areas, hardstand and other operational areas connected to the stormwater drainage system, in accordance with DECC guidance on first flush systems. The stormwater runoff is diverted to a 120kL tank in each of these catchments. Once a tank is full, any continuing stormwater flow is diverted past the tank to stormwater outlets discharging to the Hunter River. Stormwater stored in the ‘first flush’ tanks is pumped to either the site effluent system or an effluent holding pond depending upon the quality of the stormwater (see Section 3.1 of Appendix J). Once combined with the site effluent, it is tested in accordance with the site’s Environment Protection Licence (EPL), including total suspended solids (TSS), pH, ammonia, nitrate and other potential contaminants, prior to discharge to the Hunter River.

Minor hardstand or roof areas not connected to the stormwater drain system are deemed to drain to grass and infiltrate.

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12.2.2 Effluent Existing effluent volume discharged from the site is in the order of 2,000kL per day, with a very infrequent maximum daily discharge of approximately 3,000kL. The effluent consists of:

• ‘Blowdown’ water from Cooling Towers and Boilers; • Process wastes from plant operations; and • Some stormwater (collected in the flush systems). Where possible, liquid streams are recycled on site in various processes to increase the plant water efficiency and reduce the effluent volumes and contaminant loads. Liquids that cannot be recycled within the existing operations are collected, managed and disposed of the site effluent system. The system consists of a network of effluent pipes from all areas of the plant that direct waste water that meets the discharge criteria to the effluent discharge system. The effluent is discharged to the north arm of the Hunter River via a diffuser system to ensure rapid mixing with the river water.

The site has three main hold points where effluent that does not meet the discharge requirements can be diverted for treatment or management prior to release to the site effluent system. These are:

• Nitrates Effluent Pond – holds effluent that has elevated nitrogen levels or high/low pH, to control discharge from the pond at a rate allowing for overall acceptable specifications; • Demineralisation (‘Demin’) Pond – holds and treats waste liquid from the demineralisation process (high/low pH); and • Effluent Diversion Pond – additional temporary storage capacity for off-specification effluent prior to transfer to Demin Pond for pH adjustment or disposal offsite using appropriately licensed liquid waste contractors. Effluent quality is subject to a range of concentration limits detailed within the DECC EPL for temperature, pH, total nitrogen, zinc, arsenic, hexavalent chromium and oil and grease. The site undertakes effluent monitoring on a continuous, composite and grab sample basis to assess compliance.

A Pollution Reduction Program (PRP), as part of the site’s current EPL, requires a reduction in annual nitrogen discharge from the site to below 200 tonnes per annum. A program of works is currently being undertaken at the site to minimise the discharge of nitrogen to the effluent system and thus enable the site to comply with this limit.

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12.3 Potential Impacts 12.3.1 Stormwater Construction

Potential impacts to stormwater / surface water during the construction of the proposed development, including the additional first flush system and storages include:

• Increased sedimentation and turbidity from erosion; and • Contamination from accidental spills and/or waste handling. It is considered that these identified impacts during construction are minor and would be addressed and managed within the CSEMP which will include requirements for the management of erosion and sedimentation.

Operation

A large proportion of the undeveloped southern area of the site, which is currently pervious surfaces such as grass, would be developed during the proposed expansion of the facility, which would result in approximately 30,000m3 of additional impervious area on the site. Catchments 4 to 7 would contain most of the proposed expansion activities as shown in Figure 12-1.

Potential impacts to stormwater during the operation of the expanded facility would include:

• Insufficient first flush capacity and storage within certain stormwater catchments which would have the potential to flush contaminated stormwater into the Hunter River. Due to the proposed alterations in existing facilities and additions in hard standing areas, Catchments 5 and/or 6 may require additional first flush capacity and possible redirection of stormwater to other catchments; however the specific requirements would be determined during the detailed design of the stormwater system (see Appendix J for details). A new first flush system and storage unit would be 3 required within Catchment 7 to accommodate the first flush volume of 260m maximum.

A review of the capacity of the stormwater systems to manage typical design firewater run-off volumes for the site will be required to ensure that the potential impact of firewater is minimised.

During detailed design the approach for the management of stormwater from the proposed expansion project, including safeguards, will be finalised in accordance with the framework provided in Section 12.4.1.

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12.3.2 Effluent Potential operational impacts relating to effluent as a result of the expansion project could include:

• Exceedences of current site effluent quality limits; and • Exceedences of current site effluent quantity limits. The existing site effluent system would remain unchanged as a result of the proposed expansion project. The proposed development on the site would result in an increase of approximately 896kL/day of effluent, consisting of solutions from the Nitric Acid Plant and Ammonium Nitrate Plant, Cooling Tower / Boiler blowdowns and general process wastewater. The additional volume of generated effluent as a result of the facility expansion would remain well within the EPL (No. 828) quantity limit of 4,500kL/day, and would retain additional volume of approximately 1,000 – 1,500kL/day for occasions where effluent volumes above the expected daily average need to be discharged. Details of the additional effluent sources and quantities are provided in Appendix J.

The new plant and equipment would not contribute to the discharge of additional arsenic or hexavalent chromium as these substances would not be utilised in these plants.

Liquid wastes (e.g. ammoniated oily waste, oily water and waste oils) generated as a result of the proposed expansion project which are not suitable for discharge to the site effluent system would be contained and stored for appropriate disposal, as currently occurs. Appropriate storage of this waste would be installed to prevent discharge of this waste to the effluent system and allow collection by an appropriately licensed liquid waste contractor. Site management systems exist to appropriately handle and store these wastes to minimise the risk of spills.

Systems will be implemented to recycle where possible waste nitric acid solutions from the Nitric Acid Plant, however where this is not possible the solutions will be directed to a neutralisation pit or the Demin Pond and then to the site effluent system.

The new Ammonium Nitrate Plant will be designed to minimise the generation of effluent through the optimisation of plant design, recycling of solutions within the process and reuse offsite. Solutions containing low quantities of ammonium nitrate, which cannot be recovered, are likely to be diverted to the effluent system.

Appropriate environmental safeguards would be required to minimise the likelihood of impacts relating to effluent as further detailed in Section 12.4.2.

12.4 Environmental Safeguards 12.4.1 Stormwater Safeguards would be implemented during construction of the proposed development to minimise potential identified impacts to stormwater / surface water. Safeguards would be incorporated into the CSEMP to ensure that:

• Sediment and erosion control measures, such as sediment fences and bunding, are installed and maintained, with particular attention where the drainage is towards a surface water body;

• Stockpiles are stabilised and appropriate sediment and erosion control measures are installed down slope of stockpiles; and

• Spill kits are made available to construction vehicles so that accidental leaks and spills can be controlled (see Section 12.4.2. for further safeguards relating to leaks and spills).

Proposed Ammonium Nitrate Facility Expansion 12-4 S6065303_FinalEA_1June09.doc

The approach to be undertaken for operational stormwater management incorporates a number of environmental safeguards to minimise the potential for contamination of stormwater. In the design phase this would involve classifying impervious surfaces depending on the risk of stormwater contamination and the surface area to be managed. Using such an approach would achieve the following stormwater management goals:

• Minimise the area of polluting surfaces contributing to stormwater runoff / first flush volumes by excluding high pollutant load areas from the stormwater system and directing surface water in these areas to the effluent system; • Make first flush capture more efficient and targeted at the areas that need it, that is, make sure only first flush is captured in the tanks and not the ‘clean’ stormwater that follows; and • Reduce the first flush volume collected from areas less likely to contribute to stormwater contaminant loading. During site detailed design and layout each area will be assessed to determine the potential to generate contaminated stormwater and appropriate stormwater controls will be implemented to minimise the quantity and optimise the quality. Part of this approach is to use and optimise existing infrastructure such as first flush tanks and minimise the reliance on stormwater infrastructure where feasible.

Strategies to minimise the generation of contaminated stormwater runoff in the catchments include:

1 New plant designed to minimise the discharge of air pollutants that could contribute to stormwater contamination. 2 Roofing and bunding of some plant areas to minimise rainwater ingress where potential contamination sources could be present, and to preferentially direct any materials on the ground surface within these protected areas to the appropriate effluent management system. For example, key process plant areas and vehicle loading facilities. 3 Undertaking simple hydraulic calculations and site drainage design to establish appropriately sized catchment areas for each stormwater drainage inlet that leads to first flush capture system. 4 Management of vehicle traffic to minimise the tracking of stored materials from the bulk storage and bagging areas. 5 Bunding in key areas where materials are processed to segregate the processes from the stormwater system. 6 Consider the adoption of ‘water sensitive design’ engineering approaches for low intensity areas where the stormwater quality and quantity would make the use of bio- filtration, swales and infiltration basins possible for the treatment and disposal of the stormwater. Depending upon the outcomes of the detailed design phase and the review of possible stormwater control options for each plant area, it may be necessary to extend the first flush system to accommodate all new impervious areas.

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Firewater The existing storm water first flush system will be assessed for its capacity to capture typical design fire water run-off volumes for the site. During the detailed design phase, the requirements for firewater management for the proposed new plant and equipment will be assessed in accordance with the applicable standards and policies for NSW. These may include the NSW Government’s Hazardous Materials Policy Co-ordinating Committee’s Best Practice Guidelines for Contaminated Water Retention and Treatment Systems (1994) and the Department of Planning’s Hazardous Industry Planning Advisory Paper No. 2 Fire Safety Study Guidelines (1993, under review).

12.4.2 Effluent A range of mitigation measures would be implemented to minimise the effluent output volume from the proposed expansion and to improve site efficiency through effluent reuse. In addition, the new plant would be designed to comply with the current effluent quality limits.

New plant design would have measures integrated into the design to minimise the volume of effluent produced, including the use of equipment to minimise water consumption, such as water-limiting devices on ANP3 washdown systems and hoses, mist eliminator pads on Cooling Towers to minimise loss of water droplets from the cooling tower system, and recycling liquid streams within site processes where possible.

As the new plants would not utilise processes that require the use of arsenic or hexavalent chromium there will be no increase in the discharge of these substances as a result of the proposed expansion project.

To ensure that the expanded facility complies with the mass discharge limit for nitrogen in effluent of 200tpa and the concentration limits, a number of design features in both NAP4 and ANP3 will be installed. Nitric acid containing streams in NAP4 would be recycled within the plant where possible to minimise the discharge of nitrogen to the effluent system.

Furthermore, ANP3 would be designed to minimise the generation of effluent containing ammonium nitrate through:

• Plant design: Utilise plant design to reduce the quantity of solution requiring recycling, reuse or disposal. This will include the design of the process condensate system, which can be a significant source of nitrogen in effluent.

• Recycling solution within the process: Where possible, ammonium nitrate solutions will be recycled within the plant.

• Reuse offsite: Where solutions cannot be recycled within the process these will be collected and treated to produce Weak AN Solution which is then used offsite at another Orica facility or sold for use as an agricultural fertiliser.

In addition, the new plants will be designed to maximise the reuse of process condensate including:

• Provision of storage capacity and distribution systems to enable reuse within ANP3 for process applications and equipment wash-down during plant shutdowns; and

• Designing the proposed Nitric Acid Plant (NAP4) to enable some of the process condensate to be used in the manufacture of nitric acid.

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Additionally, appropriate post plant treatments on process condensate, such as reverse osmosis, which is currently used, would also be implemented to minimise the contribution of this source to the discharge of nitrogen from the site, if required.

Mitigations would also be undertaken to ensure that the temperature of the additional effluent does not affect existing effluent temperatures, including:

• Appropriate sizing of cooling systems for the application;

• Heat recovery on waste streams with elevated temperatures, and

• Recycling of solutions where possible.

The proposed plant associated with the expansion would be designed to minimise the potential for environmental harm as a result of spills to the effluent system. Spill management systems would be installed and will include:

• Blind sumps in workshop areas and enclosed plant areas where hazardous materials are used;

• Placement of spill kits at suitable locations;

• Bunding of chemical storage areas and collecting spilled liquids for re-processing and / or reuse or directing to the effluent system, depending on the nature of the material and its concentration;

• Catch drains to prevent spread of spilled liquids / materials;

• Utilising the first flush system to capture larger spills for treatment, where these occur in areas outside the controlled effluent collection zones, for example spillage from a road tanker whilst on plant;

• Operational areas would be fully bunded and sealed in accordance with operational requirements and measures put in place to monitor and manage effluent generated within the new plant areas.

12.5 Conclusion Provided the recommended environmental safeguards are implemented throughout the detailed design stage of the proposed plant, during construction and during the operation of the plant, potential impacts relating to the management of surface water (i.e. stormwater and effluent) would have minimal environmental impacts and would remain within the existing prescribed EPL limits for the site.

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G:\Jobs\S6\S60600_S60699\S60653\EA\S6065303 F12.1 24 02 2009

Source: Storm Consulting Pty Ltd (February 2009)

Figure 12.1 Stormwater Plan Orica Australia Pty Ltd

Not to Scale Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

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13.0 Resource Implications and Interfaces

13.1 Existing Environment The Orica Ammonium Nitrate Facility has been operating on Kooragang Island since 1969. The facility has an existing maximum capacity of 500 ktpa but currently operates at 430 ktpa. The key resources consumed during the daily operation of the facility have been identified as water, electricity and natural gas. In addition, small quantities of chemicals for the management of water chemistry are consumed. Other servicing infrastructure including telecommunications and sewerage (via onsite septic) are existing, integrated into the facility and are not expected to be affected by the proposed development.

13.1.1 Water Consumption The current facility requirements for water are supplied by Hunter Water Corporation (HWC) via an external potable water line and an onsite ring-main. The existing site demand is approximately 9.6 megalitres (ML) per day. The majority of the onsite water consumption occurs in the Demineralised Water (Demin) Plant and the facility’s cooling towers. The Demin Plant produces water of a suitable quality for use in the boilers for the Ammonia Plant, Nitric Acid Plants and Ammonium Nitrate Plants. Current water consumption is shown below in Table 13-1.

Table 13-1: Primary Areas of Current Potable Water Consumption Plant Volume Demin Water Plant 2.8 ML/day NAP1 (Nitric Acid Plant) Cooling Tower 1.2 ML/day NAP2 Cooling Tower 0.8 ML/day NAP3 Cooling Tower 1.0 ML/day Ammonia Plant Cooling Tower 3.4 ML/day Ammonia Storage Cooling Tower 0.4 ML/day Total Water Usage 9.6ML/day

13.1.2 Electricity Consumption

Current consumption of electricity is approximately 105,000 megawatt hours (MWh) per annum. The site’s electricity is currently supplied via two 33 kilovolt (kV) feeders (transformers) off the Kooragang Island ring-main. Current site load is approximately 12 megawatts (MW), peaking at approximately 14.5 MW during plant start-up. 13.1.3 Natural Gas Consumption Natural gas is a major feed and fuel resource for the existing Ammonia Plant. Current consumption is approximately 32 Terajoules per day. With a plant uptime of around 95%, the total natural gas consumption from the Ammonia Plant is approximately 11 Petajoules (PJ) per annum.

In addition, natural gas is utilised in boilers onsite to generate steam to supplement the steam generated from waste heat boilers installed in a number of the plants. Steam is used within all processes on site to drive machines and provide heating systems.

Overall site natural gas consumption is approximately 12 PJ per annum.

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13.2 Assessment Methodology In order to assess the impacts of the proposed plant expansion on the consumption of water, electricity and natural gas, the existing rates of consumption, as outlined above, were considered as the baseline figures. Changes in demand for these resource inputs were examined to determine the impacts on the supply capability of the existing infrastructure and the impacts on resource availability.

13.3 Potential Resource Impacts Orica has contacted the relevant electricity, water and natural gas utilities regarding their ability to supply the required increase in services, and to determine their general requirements, as outlined below. The proposed expansion does not require new utility infrastructure connections into the site.

13.3.1 Water The potable water distribution system for NAP4 and ANP3 will be integrated into the existing potable water line and main ring main system.

The proposed plant expansion will increase the demand for water, as currently supplied by HWC. The majority of the additional demand for water would come from the proposed NAP4 and ANP3 Cooling Towers, and the Ammonia Plant Cooling Tower. All new plants will also require potable water for safety shower systems, firewater systems and general maintenance requirements such as plant flushing. The estimated primary areas for increased demand for water are shown below in Table 13-2 and equates to an approximate 50% increase in site water demand.

Table 13-2: Allocation of Increased Potable Water Consumption Plant Volume NAP4\ANP3 Cooling Tower 3.6 ML/day NH3 Cooling Tower 0.7 ML/day Demin Water (and miscellaneous uses) 0.5ML/day Total increase in water usage 4.8ML/day

HWC is currently investigating opportunities to supply facilities on Kooragang Island with recycled water to reduce reliance on potable water. Orica is actively involved in discussions with HWC regarding this opportunity. Additionally, Orica will pursue water savings initiatives through the design process of the project and consider the site’s capabilities regarding re-use of process water within the site’s operations and infrastructure.

13.3.2 Electricity It is anticipated that overall consumption of electricity following the plant expansion will see a modest decrease in demand of approximately 8%. This anticipated reduction in the demand for electricity occurs as a result of two initiatives in the new plants:

• In the Ammonia Plant the planned replacement of a large electric motor driving a process air compressor with a steam driven motor will reduce electricity consumption by approximately 1.5MW. • Additionally, the anticipated increase in electricity consumption from the planned introduction of NAP4, ANP3 and the associated despatch facilities would be offset by the potential inclusion of a motor generator in the nitric acid plant air compressor unit returning approximately 2.2MW.

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Other slight increases in electricity consumption are anticipated to occur from the cooling towers, Demin Plant and other general infrastructure such as instrument air compressors and office requirements. The site’s anticipated electricity consumption is provided below in Table 13-3.

Table 13-3: Allocation of Annual Electricity Consumption

Electricity Units Nitrates Ammonia General Total (per annum) Current Future Current Future Current Future Current Future

Electricity MWh 55,179 75,117 36,008 23,525 15,573 19,466 106,760 118,108 Used

Electricity MWh 0 19,765 0 0 0 0 0 19,765 Generated

Net Usage MWh 55,179 55,352 36,008 23,525 15,573 19,466 106,760 98,343

Whilst it is anticipated that there will be a net reduction in electricity consumption, peak requirements during startup periods will increase. Hence additional electrical infrastructure is to be installed in the expansion.

13.3.3 Natural Gas To facilitate the anticipated increased demand for natural gas, the existing gas distribution network will be extended within the site to integrate the new facilities. The majority of the anticipated increase in demand for natural gas will be from the Pre-Reformer and the Reformer in the Ammonia Plant. Natural gas will also be consumed by the new boiler and the NOx and/or N2O abatement in NAP4.

Natural gas consumption from the Ammonia Plant is estimated to increase by approximately 20% from the existing operation. Operating with an uptime of approximately 95% the total natural gas consumption from the Ammonia Plant is expected to increase from approximately 11 PJ per annum to 13 PJ per annum. The overall gas consumption from the site is expected to be approximately 14 PJ per annum.

As part of the proposed development, Orica intend to improve the gas efficiency (GJ/t) in the Ammonia Plant by approximately 4%. This planned efficiency saving is incorporated into the above projections of natural gas consumption.

13.3.4 Steam Due to the start-up steam pressure requirements of NAP4 the existing site steam systems will not be adequate and a new gas-fired Boiler will be installed to start NAP4.

The steam system supporting NAP4 and ANP3 is planned to be integrated into the existing site steam system to enable them to either export or import steam depending upon the process requirements and to maximise efficiency of steam usage across the site. This may ultimately enable the replacement of the existing boilers.

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13.4 Environmental Safeguards It is anticipated that the proposed expansion of the Orica Ammonium Nitrate Facility will increase natural gas and water consumption and will see a modest reduction in electricity demand. It is therefore important to ensure that natural gas efficiency and potable water use and reuse efficiency are maximised.

As mentioned above, Orica is seeking to improve its efficiency of natural gas consumption per tonne of output from the Ammonia Plant. At full future capacity (i.e. 1050 tonnes per day) this natural gas efficiency target represents a saving of 1575 GJ per day.

The electricity power consumption in the Ammonia Plant is expected to be reduced by 1.5 MW by the replacement of one of the electric driven process air compressors with a steam turbine driven air compressor. In addition, Orica is investigating the installation of an electrical generator on the NAP4 compressor unit to enable the recovery of electricity from steam created in the new acid plant returning approximately 2.2MW.

Orica is an active participant in the Federal Government’s Energy Efficiency Opportunities program and the NSW State Government’s Energy Savings Action Plan Program. These medium term programs that promote investigations into energy efficiency are aimed at resulting in further reductions in energy consumption from the existing plants.

13.5 Residual Impacts The residual impacts will be based primarily on the associated increase in overall energy consumption, despite an improvement in the energy efficiency in the production of the products. There will be an improvement in energy efficiency per saleable tonne of product from the site as a result of the proposed expansion project.

The increased demand for potable water may be affected if Australian drought conditions persist and begin to affect the ability of HWC to supply the contracted amount of water. However it is not anticipated that the increased demand would cause any substantial stress on the current potable water delivery system. Orica will continue to liaise with HWC to maximise opportunities to reduce reliance on potable water, particularly regarding its proposed recycled water project.

13.6 Conclusion The proposed plant expansion will increase the demand for natural gas and water; however, the increases in demand can be safely and effectively supplied using either the current infrastructure or upgrading the infrastructure as discussed above. It is anticipated that the consumption of electricity will decrease through the measures described above.

Orica is seeking to improve resource efficiency to minimise the increased demand on resources through measures implemented in this project. Improvements will be made in the Ammonia Plant resulting in a 4% improvement in natural gas efficiency. Also, a large electric drive on an Ammonia Plant compressor will be replaced by a steam turbine and a motor generator is being considered on a new compressor train in NAP4 which will collectively result in up to an 8% reduction in total electricity usage. Orica is also investigating, in cooperation with Hunter Water Corporation, the possibilities of using recycled water to replace potable water in their production processes.

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Additionally, Orica has set internal environmental and sustainability targets for their business, which are called Challenge 2010. Challenge 2010 includes safety, health and environment objectives and milestones that Orica is striving to achieve by the year 2010. By 2010, Orica has committed to reducing its energy consumption by 15%, water consumption by 15% and waste by 50% across the total business.

The Orica operation will ensure that all opportunities for reducing resource consumption are thoroughly investigated through their involvement with governmental energy efficiency programs and internal targets for improving the sustainability of the operations.

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14.0 Soil and Groundwater Quality

14.1 Background The methodology for this assessment included a desktop review of previous investigations undertaken at the site. These documents included:

• Matthei, L.E., 1995. Soil Landscapes of the Newcastle 1:100,000 Sheet Report, Department of Land and Water Conservation, Sydney; • Coffey and Hollingsworth, 1966. Soil Investigation for Nitrogenous Fertilizer Complex at Walsh Island, Newcastle. Prepared for Eastern Nitrogen Ltd; • URS, 2003. Remedial Action Plan Orica Kooragang Island, December 2003; • URS, 2008. Orica Kooragang Island Stage 2 Voluntary Remediation Agreement Completion Report. Prepared for Orica Explosives Pty Ltd. 27 March 2008; • URS, 2008b. Environmental Management Plan (Revision 1,) Prepared for Orica Australia Pty Ltd. 20 March 2008; and • Kinhill, 1997. Ammonium Nitrate Upgrade, Kooragang Island: Environmental Impact Statement. Prepared for Incitec Ltd., Kinhill Engineers Pty Ltd. Soil Landscape sheets (Matthei, 1995) identify Kooragang Island as disturbed terrain as it was originally a series of low-lying islands that were progressively in filled with sediment dredged from the Hunter River. Site reclamation was undertaken between 1866 and 1960’s and as a result, there has been a significant alteration of soils. The soils on the site comprise fill material underlain by marine and estuarine sediments.

The proposed facility expansion is to be located on part of the original Walsh Island, one of the islands incorporated into Kooragang Island as part of reclamation works. The Department of Public Works and Services undertook drilling on Walsh Island (now Kooragang Island) in 1964 which showed sand to a depth of 65 m followed by bedrock (Coffey and Hollingsworth 1966). The sand is Quaternary age and the bedrock consists of Permian sediments. Soft organic clay, probably deposited by the Hunter River during flooding has been found at two metres depth on some parts of Walsh Point. Reclaimed parts of Walsh Point have been filled with grey-brown shelly sand. Currently, few areas of exposed soil occur on the site as much of the surface on the site has been sealed to provide hardstand areas for plant and equipment or as road base. Unsealed areas of the site are generally grassed, with some small landscaped gardens adjacent to some buildings, paths and roads. Given the area was formed by reclamation activities and the long history of industrial activities on Kooragang Island; soil contamination has been reported throughout parts of the Island.

Groundwater and soil investigations have been conducted at the Site since the late 1990’s. Contaminants of potential concern identified by these investigations have included arsenic, ammonia/ammonium and nitrite/nitrate.

Arsenic contamination has previously been identified associated with a Former Sludge Disposal Pit, located approximately 200m west of the Ammonia Plant, which was reportedly used for the storage of arsenic sludge and runoff from the Ammonia Plant. The pit was decommissioned in 1997 with remaining waste material removed and treated (URS, 2003). In addition, low levels of arsenic contamination were identified in the Ammonia Plant area and a former pit in the Nitrates area. Groundwater investigations conducted by HLA prior to 2000 identified concentrations of arsenic in these areas to be above guideline concentrations (URS, 2003).

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Ammonia contamination has also previously been reported across the Site at a number of locations. The primary source of ammonia contamination is believed to have been the Ammonia Storage Scrubber, where liquids resulting from water scrubbing of ammonia vapour were discharged to the subsurface (URS, 2003).

Ammonium nitrate contamination from a number of contributing sources from the Nitrates plants was also reported (URS, 2003).

14.2 Existing Groundwater and Soil Impacts 14.2.1 Arsenic Elevated levels of arsenic in groundwater have been identified in a narrow band which runs from a former sludge disposal pit in the north western sector of the site in a north westerly direction towards the Hunter River (URS, 2003) Two locations with minor, localised arsenic contamination, were also identified to the east of the Ammonia Plant and at a former pit in the Nitrates area.

The Former Sludge Disposal Pit, which had been used for the disposal of arsenic containing sludge and runoff from the Ammonia Plant, ceased operation in 1994. The pit is thought to have been constructed around the time the Ammonia Plant commenced operation and in 1974 some work was undertaken to line the pit and reduce ingress to the ground. An additional membrane liner was installed in 1988 (URS, 2003) and the pit decommissioned in 1997.

Bi-annual groundwater monitoring of arsenic has shown that arsenic concentrations have remained consistent since 2006 (URS, 2007). The arsenic appears to have been naturally attenuated within the aquifer, elevated levels downstream of the pit reducing to low levels close to the south arm of the Hunter River. The process for the attenuation of the contamination dispersal is thought to be adsorption of arsenic onto amorphous iron naturally present within the aquifer. This has significantly retarded the movement of arsenic from that expected by groundwater flow velocities (URS 2008).

Remediation activities have recently been undertaken at the site to address the previously identified arsenic contamination of soil and groundwater. In 2005, arsenic contaminated soil below and around the former arsenic disposal pit, but above the water table, was treated and removed from the site. Additional investigations are currently underway on the management and remediation of the residual arsenic contamination. Ongoing remediation activities will be unaffected by the proposed development.

14.2.2 Nutrients Preliminary investigations identified the presence of ammonia in groundwater across the site (URS, 2003). The highest concentrations of total ammonia were observed in the vicinity of the Borrow Pit/Ammonium Nitrate Effluent Pond and down gradient of the Ammonia Storage Tank. Lower concentrations were found surrounding the Former Sludge Disposal Pit and the southern portion of the Site as well as an isolated hot spot near the Bagging and Dispatch Area (URS, 2003). Off site monitoring wells located down gradient of the Ammonia Storage Tank also reported elevated concentrations of total ammonia.

Source control activities were undertaken between 2004 and 2005 to minimise the potential for further nutrient contamination of groundwater.

On going monitoring of groundwater wells since 2003 has indicated that concentrations of total ammonia has decreased over time through natural degradation (URS, 2008).

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14.2.3 Acid Sulphate Soils (ASS) Estuarine sediments of coastal NSW from the Holocene geological age may contain iron pyrite, the main constituent of Acid Sulphate Soils (ASS). These sediments are generally found below 5m Australian Height Datum (AHD), typically in coastal and floodplain areas. Pyritic sediments can be divided into classes based on their oxidised state. If the pyritic material is being oxidised it will generally have a pH of less than 4.0 and is called actual acid sulphate soil (AASS). If the pyrite material is below the water table and has not been oxidised, it is termed potential acid sulphate soil (PASS) and generally has a pH of 6.5 to 7.5 (close to neutral).

An analysis of the Newcastle Acid Sulphate Soils Map reveals that Kooragang Island is classified as ‘Disturbed Terrain’. This classification is in reference to filled areas of land, often through the process of land reclamation. The Acid Sulphate Soils Map indicates that the Orica site on Kooragang Island is located at an elevation between 2 and 4 metres (AHD). The Potential Acid Sulphate Soil Planning Map indicates that the site is in a Class 2 ASS area, which requires consent for all disturbance of the soil below the ground surface. Additionally, the Newcastle Acid Sulphate Soil Risk Map indicates the potential for the presence of acid sulphate soils (ASS) or potential acid sulphate soils (PASS). Previous investigations have noted that ASS is present in the areas surrounding Kooragang Island, including the river sediments which were reclaimed for the formation of Kooragang Island. Therefore, it is possible that the natural underlying soils of the site may be PASS.

If present, the disturbance of acid sulphate soil has the potential to cause environmental harm. The release of sulphuric acid from ASS often mobilises metals such as aluminium, iron and magnesium from otherwise stable soil matrices. Elevated concentrations of such elements in site runoff may result in changes which are potentially detrimental to receiving water bodies and associated aquatic organisms. No construction activities are proposed in the areas where there are known arsenic and nutrient contamination issues, hence the presence of ASS will not affect the stability of these systems.

In 1997 Kinhill Pty Ltd (Kinhill, 1997) undertook soil testing and analysis to determine the presence of acid sulphate soils prior to the development and construction of NAP3. This testing occurred approximately 50 metres from the proposed NAP4 and 200 metres from the proposed ANP3. The Kinhill sampling showed no signs of acid sulphate soils. Additionally, no records exist of ASS being present on any previous development projects on the Orica site.

14.3 Remediation Activities 14.3.1 Arsenic Contamination The arsenic remediation activities have been undertaking in accordance with a series of Voluntary Remediation Agreements (VRA) with the DECC. The Stage 1 VRA, carried out between 2003 and 2006, involved a literature review of previous investigations, delineation of soil and groundwater impact, characterisation of the aquifer and investigation of the receiving environments. Biannual groundwater monitoring was implemented and a conceptual site model was developed. Remediation strategies were proposed as a result of these investigations.

The Stage 1 VRA also included the undertaking of source control activities to remove arsenic contaminated material and soils from above the groundwater table in the vicinity of the former sludge disposal pit. The source control activities involved the removal of approximately 15,000 tonnes of material from above the groundwater table, treatment where required, and offsite disposal. Residual arsenic contamination of soil remains both on the Orica site and the adjacent Incitec Pivot Ltd and Hydro Aluminium Pty Ltd sites (URS, 2008b).

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A Stage 2 VRA, undertaken between 2006 and 2008, included conservative geochemical modelling by URS (2008) to investigate the stability of the arsenic in the soil, which is the source of arsenic in groundwater. The aim was to determine whether there could be continued migration of the contamination. The geochemical modelling indicated that due to high arsenic concentrations in groundwater a gradual decline in redox potential and the loss of soil adsorption capacity could occur over time. This could lead to an increase in the concentrations of arsenic discharged into the Hunter River. Evidence of this actually occurring has not been observed in ongoing arsenic monitoring and the actual redox potentials monitored in the field are greater than those predicted by the model. Due to limitations with the modelling it is possible that a marked decrease in redox potential may not occur as predicted.

However, as a result of the uncertainty regarding the long-term stability of the arsenic in the soil Orica has committed to undertake additional works that are detailed in a Stage 3 VRA, which is currently underway. The Stage 3 VRA includes the design of a groundwater hydraulic containment system and preliminary investigations into longer term insitu stabilisation of the contamination.

To address the residual contamination of soil and groundwater an Environmental Management Plan (EMP) was prepared by URS in late 2007 and provided to Orica and all other surrounding stakeholders, including Incitec Pivot Ltd, Hydro Aluminium Pty Ltd and Newcastle Port Corporation. As part of the EMP a briefing was held and a communication plan was developed to ensure stakeholders were aware of the presence of arsenic in the soil and groundwater. The purpose of the EMP was to minimise human exposure to arsenic in groundwater through the management of excavation works and maintain existing groundwater conditions to minimise the mobilisation of arsenic toward the Hunter River.

Bi-annual monitoring of groundwater for arsenic contamination in selected wells both on and off site will continue to be undertaken while the Stage 3 VRA works are undertaken to assess the continued system stability. The Stage 3 VRA is to be undertaken separately from the proposed expansion that is the subject of this EA.

14.3.2 Ammonia Contamination As part of the Stage 1 VRA works, source control activities were undertaken to address the contamination of groundwater as a result of the discharge of solution from the Ammonia Storage Scrubber. This included the installation of an emergency generator to provide power to the refrigeration compressors associated with the Ammonia Storage Tank in the event of a power failure, installation of an effluent drain to direct any solution to the site effluent system and removal of the former discharge system.

Monitoring of nutrients in groundwater has shown that ammonia concentrations have decreased since the cessation of discharge of Ammonia Storage Scrubber effluent in 2005 (URS, 2008). Continued reduction of nutrient concentrations is expected due to natural degradation. Ongoing monitoring will be undertaken to confirm that nutrient concentrations continue to decrease. The site EPL includes a requirement to undertake ammonia monitoring in accordance with a nutrient monitoring plan.

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14.4 Potential Impacts 14.4.1 Construction During the construction phase of the proposed expansion works, potential environmental impacts to groundwater and soil could include:

• Inappropriate management of potentially contaminated groundwater during any dewatering activities; • Spillages of fuel or chemicals used during the construction activities; • Excavation of potentially contaminated soil from the project construction areas; • Presence of Acid Sulphate Soils; • Erosion and sedimentation of soils during excavation;

• Spillages during demolition of redundant equipment and plant.

The Construction Safety and Environmental Management Plan (CSEMP) will detail the measures to be implemented to address these potential impacts including the sampling of groundwater and soil for the presence of contaminants of potential concern.

14.4.2 Operation During the operation of the new facilities groundwater and soil could potentially be impacted as a result of:

• Failure of containment systems for chemicals, products and wastewater, such as tanks, bunds, pipework, sealed surfaces; • Failure to fully implement management systems to prevent tracking of materials from dry product storage areas; • Failure of systems for the refuelling of mobile equipment; • Failure of training systems to ensure that personnel onsite respond in a timely manner to incidents that could result in groundwater contamination; • Failure of equipment resulting in elevated levels of air emissions and subsequent fallout issues;

The plant design and operational safeguards will aim to minimise the potential risks to groundwater and soil as a result of the new operations.

14.4.3 Environmental Safeguards 14.4.4 Construction It is not proposed to undertake any construction activities in the vicinity of the known arsenic or ammonia contamination. However, the CSEMP will include requirements for the assessment of water quality and the management of water generated during any dewatering activities that are required to be undertaken at the site.

The CSEMP will include requirements for monitoring compliance with the controls for prevention of soil and groundwater contamination.

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Given the potential for ASS being present on the site, project elements have been designed to minimise excavations and potential disturbance of ASS. Limited excavations at depth will be required during the construction of the Project including the establishment of footings and infrastructure on the site, which will have the potential to intercept ASS.

• The CSEMP will require soil testing to be conducted on excavated soils to determine the presence of acid sulphate soils (ASS). If sampling of excavated materials returns positive results, then an ASS management plan will be developed and implemented in accordance with the Department of Natural Resources (now DWE) “Acid Sulphate Soils Manual”. The CSEMP will include a requirement that all excavated soils be tested to identify whether there are contaminants present in the soil. The results of monitoring will be compared with the DECC waste guidelines and the National Environment Protection (Site Contamination) Measure guidelines to determine the appropriate management strategy for the soils.

• All construction activities and works will be in accordance with “Managing Urban Stormwater; Soils and Construction” (Landcom, 2004). • In addition, the CSEMP will include measures to ensure excavations are managed to minimise the potential for erosion and sedimentation. Predicted impacts would vary depending on the proposed destination of excavated material and the potential for undetected contaminants. The areas on the site previously identified as having arsenic contaminated soils (Section 14.2) are not identified as development sites for the proposed development. Measures to manage this erosion and sedimentation issue will include the use of standard dust suppression measures in order to minimise the potential for emissions from airborne dust and erosion, and sediment controls to minimise the potential for discharge of soil from the site during rain events, minimisation of the extent of the disturbed surface area, and minimisation of the duration of the disturbance. The CSEMP will include requirements for the monitoring of the compliance with the requirements in relation to address potential for soil and groundwater contamination.

14.4.5 Operation The proposed expansion of the plant will be designed to ensure that the potential for contamination of groundwater and soil is minimised. This will include:

• Minimisation of the need for underground pits and pipework; • Use of secondary containment for underground pits and pipework in accordance with relevant Orica and Australian standards; • Design of sealed floors in plant areas to minimise the potential for ingress of process solutions into the groundwater as a result of failure; • Design of material handling areas to minimise the potential for transport of ammonium nitrate outside of these areas; • Bunding of all process areas and tanks in accordance with relevant Orica and Australian Standards; • Design of appropriate loading and unloading facilities to ensure that spillages are collected and able to be recycled or disposed of appropriately; and • Bunding for chemical storage areas.

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In addition, inspections, maintenance and monitoring of these systems will be included in existing management systems. All personnel onsite will be provided with information to ensure they are aware of the requirements to manage this issue.

14.5 Conclusion Arsenic and nutrient contamination has been identified in parts of the Orica Site in both soil and groundwater leading to Orica entering into a series of VRA’s with the DECC. The expansion project is not proposed to be undertaken in the areas identified as impacted, however the CSEMP for the proposed works will require the assessment of soil and groundwater in construction areas.

Once construction activities at the site are completed, expansion operations are not expected to impact further on groundwater and soil, with the design of the new plants to include measures to prevent further contamination issues. In addition, management systems used at the site to minimise the impact of operations on the receiving environment will be updated to include the new plant and equipment.

The CSEMP and project design components as outlined in this section, would ensure appropriate mechanisms are in place to manage any potential risks associated with groundwater and soil contamination or acid sulphate soils.

It is anticipated that the construction and ongoing management of the proposed development would not adversely impact the contaminated groundwater and soil, providing the identified control measures are implemented.

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15.0 Visual

15.1 Existing Environment Kooragang Island (‘the Island’) is essentially flat and low-lying. It has an industrial character which features large tanks, stacks, pipe work, buildings and port facilities. Scattered vegetation and the rock revetment walls define and protect the site and Kooragang Island generally. These features are visually insignificant compared to the overall industrial appearance of the Island. The southern section of the Island can be seen from residential areas such as Stockton to the east and south-east, Carrington to the south-west and Newcastle to the south. The site is also visible from the heavily industrialised areas directly to the north and to the west across the Hunter River.

The overall character of the vicinity of the proposed development is industrial. The site for the proposed developments, similarly with the surrounding industrial area, is generally flat. In the immediate area there are the existing Nitric Acid Plants (NAPs), Ammonia Plant (NH3 Plant), Ammonium Nitrate Plants (ANPs) and other plant related infrastructure including storage sheds, cooling towers and discharge stacks. There are also heavy vehicles using Greenleaf and Heron Roads and freight ships travelling along the Hunter River.

The site operates on a 24hr/day, 7 day per week basis, not taking into consideration shut down periods for maintenance.

15.2 Assessment Methodology The visual impacts of the proposed development were assessed by considering the spatial locations where the proposed developments could be viewed. Specific attention was paid to how the introduction of the proposed developments may impact the vistas in contrast with, and in the context of, the pre- existing industrialised landscape.

15.3 Potential Visual Impacts The site specific locations of the proposed developments would be situated within the existing industrial environment of the Island. The proposed developments would provide Orica additional industrial infrastructure similar to that already existing on the site, and would be visually consistent with existing facilities in the immediate surrounding industrialised area. The potential visual impacts from the Hunter River and nearby residential areas such as Stockton can be minimised though the maintenance of existing plantings of vegetation which would provide some screening barrier to the proposed development.

The stacks and columns on the existing Ammonia Plant, Nitric Acid Plants and Ammonium Nitrate Plants range from 48m to 84m. In addition, the existing Prill Tower is approximately 45m high. There are also a range of other buildings on site up to approximately 25 metres in height.

The proposed infrastructure would be within the height range of the existing infrastructure. The proposed infrastructure would be of a similar nature, including stacks, columns, a number of significant buildings and structures, and a new Prill Tower. Given the visual similarity to existing infrastructure, the visual impacts of the proposed development would not create an additional overbearing focus on the Orica site. A colour scheme that is complementary with the existing Orica site colour scheme would be applied to the proposed infrastructure to assist in integrating the development into the existing site skyline.

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The approximate heights of proposed key infrastructure of visual significance are shown in Table 15-1.

Table 15-1: Approximate Dimensions of Proposed Infrastructure of Visual Significance Item Height Diameter/Width Stacks / Columns / Towers Pre-Reformer Stack 27m 1.35m Nitric Acid Plant No. 4 Stack 55m 1.4m Nitric Acid Plant No. 4 Absorber 50m 4m Ammonia Scrubber Vent Stack 55m 0.16m ANP3 Prill Tower Up to 65m Up to 6m ANP3 Final Scrubber Stack 24m 1.7m ANP3 Ammonia Scrubber Vent 24m 0.2m Stack Boiler Stack 40m 1.4m Major Buildings & Structures Nitric Acid Plant No.4 structure 25m 35m x 35m ANP3 building / structure 25m 65m x 30m ANP3 Bulk Store 15m 70m x 35m Road Bulk Loadout Building 25m 37m x 13m NAP4 Cooling Tower 15m 50m x 10m

15.3.1 Night Time Visual Impact The site will continue to operate on a 24hr/day, 7 day per week basis, not taking into consideration shut down periods for maintenance. Whilst there will be additional infrastructure which will include lighting for personnel safety and security, no significant increases in the intensity of lighting on the site at night are expected.

15.4 Potential Viewpoints To assess the potential impacts of the construction and operation of the infrastructure associated with the proposed expanded Facility, photographs were taken from two key viewpoints from within the surrounding environment. These photograph locations are shown in Figure 15-1.

15.4.1 Stockton Views across to the Island from Stockton would remain as views of an industrialised landscape. The proposed structures for the NAP4 and ANP3 including the ANP3 Prill Tower and NAP4 absorber/stack would be visible. A number of new buildings and structures would be visible particularly at the southern end of the site which is currently only partially developed. There would be no noticeable change to the Ammonia Plant skyline. Overall, the proposed development would be consistent with the industrial character of the Island and would be similar in scale to the industrial infrastructure already existing at the Orica site. Views to the Island would be aesthetically similar to the general industrial views currently available. These are shown in Figure 15-2.

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15.4.2 Hunter River Views to the Orica site are possible from the Hunter River; which is used recreationally by people for fishing and boating, and by those who work in the port and on ocean vessels. Tourist/entertainment boats may also travel near the proposed site. People viewing the site from the Hunter River experience only transient views given they are usually on moving craft, or temporarily stationed in a location where the site is visible. The proposed development would intensify the views toward the Island from certain close up river-based locations. However, the proposed developments would not become a focal point, but comprise part of the industrial vistas that the Island offers to River users.

15.4.3 Newcastle City Selected elevated areas in Newcastle City show views to Kooragang Island and the Walsh Point Reserve. The Orica site can be seen to the north behind the Walsh Point Reserve. Elevated and often permanent viewing locations, such as from offices or residences in Newcastle City, are approximately 2.5 km or further from the Orica site. Therefore, these viewing locations are considered to be less sensitive to changes on the Island given the infrastructure on the Island would appear smaller in scale at that distance. The proposed development would result in limited changes in views toward the Island from Newcastle City locations. The proposed development would generally integrate with the Island’s industrial infrastructure. These are shown in Figure 15-3.

15.4.4 Walsh Point Reserve The proposed development is not likely to block views to Walsh Point Reserve. The proposed site infrastructure would be contained wholly within the predefined Orica industrial site, and its scale would be in keeping with the surrounding industrial infrastructure. The proposed development, being a continuation of the industrial character and scale of the Orica site, is likely to have minimal impact upon the Walsh Point Reserve.

15.5 Environmental Safeguards The potential visible impacts highlighted above indicate that while the proposed development will see some significant additions to the Island landscape, these proposed developments must be viewed in context of the existing industrialised nature of the Island. As the Orica site is situated in the heart of a heavily industrialised area, and the proposed developments are similar in nature and aesthetics to the existing infrastructure on the Island and specifically the Orica site, no significant visual amenity safeguards are proposed, other than using a colour scheme that complements the existing building colours to integrate the development into the existing site skyline, identified for this proposed development.

Currently the vegetative screening along the boundary is evenly distributed and trees spaced apart due to security requirements for the site. To soften in the visual impact of the proposed development options for the provision of additional landscaping at the site will be considered. The extent of the landscaping will be affected by the requirement to comply with the site Security Plan.

If the proposed development proceeds, there will be a number of sources of visible air emissions. These will include: NAP4 Stack on start-up and shut-down, Cooling Tower discharge, steam vents, and the ANP3 Dry Section Scrubber and Evaporator discharge. These would be consistent or of lower visual impact than existing sources. The Nitric Acid Plant will be designed to minimise NOx emissions during operation. Scrubbing will be installed on the new Prill Tower (ANP3) to minimise particulate emissions.

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15.6 Residual Impacts The residual impacts of the proposed development in relation to visual amenity are two fold. Firstly the proposed development sees an intensification of the bulk or density of industrial infrastructure situated on the southern end of Kooragang Island. This area has been determined as an appropriate location for industrial activities; however the proposed development intensifies the industrial nature of Kooragang Island.

Secondly, residual visual amenity impacts arise through possible increased visible air emissions. Modern technologies will be used to minimise the effects of visible air emissions.

15.7 Conclusion Overall, the visual impacts of the proposed development are not likely to significantly alter the existing visual nature of the southern end of Kooragang Island. The site and the surrounding landscape are industrial in nature and the proposed development is unlikely to result in a significant modification to the skyline.

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Hunter River (SouthKooragang Arm) Berths 4, 5 & 6

GREENLEAF ROAD

BHPBilliton Berths 3, 4,& 5 HERON ROAD

Kooragang Berths 1, 2 & 3

Site Location

700m

Stockton

Hunter River (North Arm)

3000m

STOCKTON

3000m

Newcastle CBD

G:\Jobs\S6\S60600_S60699\S60653\EA\S6065303 F15.1 19 02 2009

Figure 15.1 Viewpoint Locations Orica Australia Pty Ltd 0 500m Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Viewpoint location and direction of view Greenleaf Road, Kooragang Island

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Existing Infrastructure View from Stockton looking north-west

Existing NAP3 and Boiler Existing NAP2 Proposed NAP4 Plant/Absorber/Stack and Ammonia Scrubber Vent Stack & Existing NAP1 Cooling Towers

Existing Prill Tower

Proposed Prill Tower & ANP3

Proposed Road

TO Bulk Loadout Building

Proposed Infrastructure View from Stockton looking north-west

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Figure 15.2 Proposed Infrastructure (View from Stockton) Orica Australia Pty Ltd Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

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Existing Infrastructure View from Newcastle CBD looking north

Existing Prill Tower Proposed Prill Tower Existing NAP1 Proposed NAP 4 Ammonia Plant Stripper Absorber Stack

Proposed Infrastructure View from Newcastle CBD looking north

G:\Jobs\S6\S60600_S60699\S60653\EA\S6065303 F15.3 09 04 2009

Figure 15.3 Proposed Infrastructure (View from Newcastle CBD) Orica Australia Pty Ltd Environmental Assessment Proposed Ammonium Nitrate Facility Expansion Greenleaf Road, Kooragang Island

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16.0 Other Environmental Issues

16.1 Flora and Fauna 16.1.1 Existing Environment The Orica site is located on reclaimed land and as such there are no remnant areas of native vegetation. Since reclamation has occurred, the area has been subject to extensive disturbance, through industrial development and land use.

Approximately 1.5km to the north (upstream) of the Orica site is the recently established Hunter Estuary National Park. The park incorporates the former Kooragang Nature Reserve, which covers an area in excess of 2,923 ha, and sections of which are a RAMSAR site (pertaining to the conservation and sustainable utilisation of wetlands). The wetland area is important to migratory and Australasian waders, waterfowl and other wetland birds and these are protected under the terms of an ‘Agreement between the Government of Japan and the Government of Australia for the Protection of Migratory Birds and Birds in Danger of Extinction and their Environment’ (JAMBA) and an ‘Agreement between Australia and the People’s Republic of China for the Protection of Migratory Birds and their Environment’ (CAMBA).

Flora

As the Orica site is located on reclaimed land in a highly modified industrial area the vegetation that now occurs on the peninsula is primarily comprised of grasses and weeds such as Common couch (Cynodon dactylon) and Paspalum (Paspalum dilatatum) (Kinhill, 1997). There are some areas of the peninsula, particularly along main roads and property boundaries that have been landscaped with a mixture of exotic and native trees and shrubs. These include Acacia spp., Casuarina spp., Leptospernum spp. and Melaleuca spp.. None of these are considered indigenous to the area.

In low-lying areas of the peninsula, Juncus spp. and Common reed (Phragmites australis) are prevalent, while along the South Arm of the Hunter River, a narrow fringe of Grey Mangrove (Avicennia marina) is dominant.

Vegetated areas of the site comprise mainly grasses and weeds. There are some small landscaped gardens adjacent to some buildings and roads within the site. These generally contain exotic species such as herbaceous annuals and have little ecological value. Areas of grass and gardens are regularly maintained.

Fauna and Fauna Habitat

Searches of threatened species databases (NSW Threatened Species Conservation (TSC) Act and Commonwealth Environmental Protection and Biodiversity Conservation (EPBC) Act) list a number of threatened fauna species that have been recorded in the area including:

• Australasian Bittern (Botaurus poiciloptilus); • Green and Golden Bell Frog (Litoria aurea); • Eastern Bent-wing Bat (Miniopteris shreibersii); and • Grey-headed Flying Fox (Pteropus poliocephalus). There is limited habitat for these species on the site due to the lack of water bodies and the lack of trees for roosting.

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There is no aquatic habitat on the site that would support a population of the Australasian Bittern or Green and Golden Bell Frog. The habitat for the Eastern Bent–wing Bat and Grey-headed Flying Fox is limited to foraging habitat as there are no potential roost sites, however it is considered unlikely that these species would utilise the heavily developed Orica site for regular foraging. Aquatic Flora and Fauna

The Hunter River estuary functions as a shipping harbour, port and recreation area. It receives industrial discharges (including from the Orica facility), periodic urban stormwater runoff and flood volumes of water from the Hunter Valley following heavy rains. Nevertheless, the estuary provides the basis for the wetlands area, oyster farming, and professional and amateur fishing.

The bulk of the fishing activity in the vicinity of Kooragang Island is carried out in the North Channel and the river section between Hexham and Raymond Terrace. The channels of Fullerton Cove and the South Channel are also trawled.

Commercial fishing accounted for less than 1 per cent of all of the region’s employment in 2001. The number of commercial fishing operations within the Hunter River has declined from 76 in 1997-98 to 52 in 2003-04 (HVRF, 2008). Data provided by NSW Fisheries shows that the gross weight of wild harvest has also declined with 239,901kg caught in 1997-98 to 152,702kg in 2003-04., although some fluctuations were observed. In 2003-04, estuarine production by species from the Hunter River comprised:

• Approximately 75% for all finfish (mainly sea mullet); • Approximately 25% for all crustaceans (mainly school prawns); and • Insignificant catch for molluscs (< 0.1% by weight) but the region produced 45.9 per cent of total NSW oyster production in 2002-03. An extensive amateur fishery also exists in the area.

Search Results

A search of the Department of Environment and Climate Change (DECC): Atlas of NSW Wildlife (formerly the National Parks and Wildlife Service) was undertaken on 17 July 2008 for records of threatened flora and fauna species known to occur within 10 km of the site. The list of species is presented in Appendix K and is summarised in Table 16-1 below.

Consideration of potential habitat impacts to threatened species, endangered ecological communities (ECC) and migratory species that potentially occur within 10 km of the study area, was also undertaken on 16 July 2008 using the Department of Environment, Water, Heritage and the Arts EPBC Protected Matters Search Tool. The search identified threatened species occurring within 10km of the site. The list of potentially occurring threatened species in the area is provided in Appendix K and summarised in Table 16-2.

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Table 16-1: Summary of DECC Atlas of NSW Wildlife report for threatened species within 10km of the site Number of Species Potentially Type Occurring Amphibia 1 Aves 37 Insecta 0 Mammalia 11 Plants 10

Table 16-2: Summary of EPBC Act Protected Matters Search Tool Report within 10 km of proposal site EPBC Act Protected Matter Results within 10 km Buffer Zone Wetlands of International Significance 1 (RAMSAR sites) Commonwealth Marine Areas Relevant 1 (White-Yellow-Box-Blakely’s Red Threatened Ecological Communities Gum Grassy Woodland and Derived Native Grasslands) Threatened Species 41 Migratory Species 55

Endangered Ecological Communities The White Box-Yellow Box-Blakely's Red Gum Grassy Woodland and Derived Native Grasslands are an EEC known to occur within 10 km of the proposed development (Table 16-2). The White Box-Yellow Box-Blakely's Red Gum Grassy Woodland and Derived Native Grasslands has a ground layer of native tussock grasses and herbs, and a sparse, scattered shrub layer. White Box (Eucalyptus albens), Yellow Box (E. meliodora) or Blakely’s Red Gum (E. blakelyi) dominate the ecological community, where a tree layer still occurs. The Identification Guidelines for Endangered Ecological Communities: White Box- Yellow Box-Blakely’s Red Gum Woodland (Box-Gum Woodland) were used to determine whether the vegetation at the Orica site constitutes an EEC. The site location for the proposal is highly disturbed, originally being part of the Hunter River Islands Reclamation Scheme. As such the Box-Gum Woodland EEC is not present at this location.

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16.1.2 Key Threatening Processes Key Threatening Processes (KTPs) are processes that threaten, or could threaten, the survival or evolutionary development of species, populations or ecological communities. Types of KTPs that may be occurring in the area include:

• Clearing of native vegetation; • Competition and grazing by the feral European rabbit; • Predation by feral cats; and • Predation by the European Red Fox.

The proposed works do not constitute Key Threatening Processes and therefore such processes are unlikely to have an impact on the study site.

16.1.3 Potential Impacts The proposed development is unlikely to have a significant impact upon flora and fauna. The site was formed through land reclamation activities and is highly modified with the existing industrial development, thus, it contains very little habitat value for native species. The proposed project would not require clearing or other activities which would affect native species and their habitats.

Although the Hunter Estuary National Park is located approximately 1.5 km from the site, the proposed project would incorporate safeguards to minimise off-site impacts. It should be noted that the Orica site currently monitors its discharge points into the Hunter River which are downstream of the Hunter Estuary National Park and are in accordance with their existing EPL.

Whilst it is considered highly unlikely given the preventative measures already successfully implemented on site for the current operations, potential direct impacts of the project would include:

• Effects to organisms through pollutants from leaks / spills and from increased effluent into the Hunter River during construction and operation of the plant. Similarly, existing environmental management measures operate on site, however potential indirect impacts of the Project would include:

• Soil and water quality impacts – sedimentation and erosion, increased nutrients, Acid Sulphate Soils. 16.1.4 Mitigation Measures Mitigation measures have been provided below to address the identified potential impacts.

• The effluent from the operation of the plants would be discharged according to the Site’s EPL. Safeguards have been incorporated into the design of the plants (e.g. additional cooling towers, engineering measures and effluent treatment / recycling) to ensure that the effluent would meet the accepted guidelines. • The CSEMP will include requirements to ensure that sedimentation and erosion from the construction activities are minimised to prevent potential impacts to nearby waterbodies and habitat. • Storage and hardstand areas would also be appropriately bunded to contain any potential leaks / spills during operation. Such mitigations would minimise the potential impact on the ecological environment.

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16.1.5 Residual Impacts No residual impacts are anticipated in respect of flora and fauna as a result of the proposed development.

16.1.6 Conclusion As the site is located in a highly modified environment, the proposed development is not likely to have significant impacts upon native flora and fauna.

16.2 Heritage 16.2.1 Existing Environment Prior to European settlement and subsequent reclamation works, the area known as Kooragang Island was a series of tidal mud-flat islands separated by narrow tidal inlets (Williams et al 2000: 16-18).

The Orica site is comprised of very flat relief. Kooragang Island was artificially created by amalgamating several smaller islands with dredged material and industrial waste. The island consists of tidal flats, overlain with dredge-spoil, with a limited local relief of less than 3 m. The soil landscape in the southeastern quadrant of Kooragang Island has been identified (Matthei 1995: 191, 224-5) as Disturbed Terrain, where soils are highly variable and extensively disturbed due to past activities including the reclamation scheme which involved the use of sediment dredged from the Hunter River channels. Soils at the Site consist of dredged materials which overlies parts of the original Walsh Island to the south of the Site.

In addition to land reclamation, the Site itself comprises a highly industrial area with the presence of the existing ammonium nitrate facility. This indicates that the study area has been highly disturbed, and the likelihood of either surface or sub-surface archaeological materials remaining in context is extremely unlikely. Therefore, in agreement with DECC, a desk-based assessment has been undertaken.

Registered Aboriginal Sites

A search of DECC’s Aboriginal Heritage Information Management System (AHIMS) database revealed that there were no registered Aboriginal sites on the subject land. There are 123 registered Aboriginal sites within a 14 x 14 km area centred over the site as shown in Table 16-3. The majority of sites are associated with developments occurring in Newcastle City, along Stockton Beach and Fullerton Cove. Only two Aboriginal sites have been recorded on Kooragang Island, including a shell midden on what was formerly Moscheto Island (#38-4-0050) and a shell midden on the northern approach to the Tourle Street Bridge (#38-4-0041).

Table 16-3: AHIMS Registered Sites Search Results within 14 km of the Site Site Type Site Feature(s) Number of Sites Open Camp Site AFT (Artefact) 20 AFT, ETM (Typical Earth Midden 22 Mound), SHL (Shell) Combined Open Camp Site and AFT, ETM, SHL 5 Midden Scarred Tree TRE (Tree) 1 Axe Grinding Groove GDG (Grinding Groove) 2 Isolated Find AFT 1

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Site Type Site Feature(s) Number of Sites ACD (Aboriginal Ceremony and Natural Mythological (Ritual) 2 Dreaming) Various combinations of AFT, SHL, PAD (Potential Archaeological Deposit), BOM None (Site type not defined) 70 (Non Human Bone and Organic Material), ETM, BUR (Burials), ACD TOTAL 123

16.2.2 Potential Impacts The site is already highly modified with the existing ammonium nitrate facility and contains very little cultural value having being formed through land reclamation. The proposal would involve the construction of new chemical plants and additional storage and infrastructure requirements. The construction of these works would require earthworks, groundbreaking activities, excavation and nominal 15m depth piling for the plant foundations. Due to the type of proposed works, there is considered low potential for isolated finds at depth.

The AHIMS search results show that there are no existing Aboriginal sites occurring in close proximity to the study area. Furthermore, the site consists of a highly industrialised area with the locations for the proposed plants being greatly disturbed, currently comprised of graded gravel / grass areas amongst existing plant.

Kooragang Island has been identified as having cultural heritage significance to the Aboriginal community, based on the likelihood that the area was used by Aboriginal people (Williams et al 2000: 16-18). Nevertheless, no specific cultural values have been identified on the site and the site is considered as having a low archaeological potential due to the history of land reclamation activities on Kooragang Island and the industrial nature of the area to be impacted by the proposed works. This assessment does not imply that the site is devoid of all value; rather it suggests that the cultural heritage values are not significant when considered in the wider context of Aboriginal sites in the Lower Hunter region.

As such, heritage issues are not considered to be a constraint to the proposed works if safeguards are incorporated into the CSEMP to manage potential Aboriginal artefacts which may be uncovered during the works.

16.2.3 Safeguards The study area is unlikely to contain items of heritage significance that would constrain the proposed works. The CSEMP will include the following requirement in relation to heritage considerations:

• Any Aboriginal objects that are uncovered during the remediation works should be left undamaged and in situ. Construction works should cease and an assessment be conducted by a qualified archaeologist in consultation with Aboriginal stakeholders and the DECC for direction as to its preservation, historical recording and / or removal if such items are uncovered. 16.2.4 Residual Impacts No residual impacts are anticipated in respect of Aboriginal Heritage as a result of the proposed development.

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16.2.5 Conclusion Given the disturbance history and highly modified environment on site it is considered that the Aboriginal Heritage Significance of the site is low and that significant impacts in respect of Aboriginal Heritage are unlikely to result from the proposed development.

16.3 Climate Change 16.3.1 Introduction Summers in the Hunter region are relatively hot, with average maximum January temperatures of approximately 29–32°C. Winters are mild, with average maximum July temperatures of 17–18°C. Annual rainfall varies across the Hunter region with about 650 mm/year, with the rainfall from Kooragang Island averaging higher at around 1,000 mm/year. Peak precipitation occurs between January and March, however the variability in rainfall from one year to the next is high.

A recent report (CSIRO, 2004) released on behalf of the NSW Government found that between 1950 and 2003, NSW became 0.9°C warmer, with more hot days/nights and fewer cold days/nights. Annual total rainfall reduced by an average of 14 mm per decade, with the largest declines in rainfall near the coast since the mid-1970s. Extreme daily rainfall intensity and frequency have also decreased throughout much of the state.

16.3.2 Sea Level Rise The area of Kooragang Island where Orica’s facility is located is at an elevation of approximately 2 – 4 m Australian Height Datum (AHD) according to the Digital Elevation Model (DEM) of Newcastle LGA (NSW DoP, 2008). Whilst the extent and rate of climate change occurring on the east coast of Australia is a matter of some debate, there currently appears to be a technical consensus that the climate is now changing at an increasing rate. Consequently, the coastal zone will experience the most direct physical impacts of climate change and significant sea level rise (SLR) is anticipated along the coast of Australia. The most authoritative and most recent (at the time of writing) report on climate change (IPCC, 2007) predicts a global average SLR of between 0.2 and 0.8 metres by 2100, compared with the 1980 levels. In addition to SLR, climate change is also likely to result in changes in wave heights and direction, coastal wind strengths and rainfall intensity, all of which have the capacity to impact adversely on the proposed development. Mean relative SLR (including land movement) around Australia of about 1.2mm/year was recorded over the period 1920 to 2000. In Sydney, the frequency of extreme sea-level events reaching 2.1 or 2.2 m has doubled or tripled, respectively, since 1950 (CSIRO, 2004).

For NSW, climate change related sea level rise and an increased frequency and intensity of storms has the potential to impact virtually all aspects of occupation of the low lying coastal areas (NSW DoP, 2008) including:

• Loss of sandy beaches, especially where they are backed by seawalls; • Increased flood levels in the tidal reaches of estuaries by approximately the amount of sea level rise, this will be especially significant around coastal lakes and lagoons; • Changed estuarine tidal regimes (flows and elevation); • Problems with local drainage in the lower estuaries and adjacent to beaches where falls are currently small, potentially exacerbating nuisance storm flooding (increased frequency and water depths); • Reduction in under bridge clearances; and • Landward migration of mangroves and salt marshes in areas of no development and, where development restricts migration, potential loss of threatened and endangered species.

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The potential for the development to be affected by direct wave action is low considering the site location, which is approximately 4 km from where the Hunter River meets the sea. Nevertheless, storm surge in association with the anticipated SLR may potentially impact Kooragang Island if the seawalls were breached. If such an event were to occur, many developments along the Hunter River, including the Orica facility may be impacted.

The current likelihood of such an event occurring is quite low. Nevertheless, if the SLR increases according to predictions or beyond, mitigation measures may need to be implemented. This may include increasing the height of the seawalls or a more comprehensive regional solution may be sought after, such as the ‘Delta Works’ in the Netherlands (Deltawerken online, 2004).

A range of issues for Orica to consider in the future may include:

• For low-lying areas, bunding and pump-out of stormwater may be required, especially where coupled with rising water tables; • A requirement for the modification and /or relocation of sewage system infrastructure (e.g. mains and pumps) in low lying areas impacted by elevated sea levels; • Wharves, jetties, marinas and boat ramps may become inoperable at current locations and require refitting; and • Revision of emergency response planning for evacuation in the event natural disasters. 16.3.3 Temperature Increase Since 1950, the Hunter region has experienced warming of around 1.3ºC. This is likely to be partly due to human activities. The CSIRO (2007) has indicated that average Hunter temperatures are set to increase by 0.2 to 1.6°C by 2030 and by 0.7 to 4.8°C by 2070. The report stated that the number of extremely hot days (above 35°C could almost double by 2030 and there could be almost 4 to 4½ more days above 35°C by 2070 (up to 78). The report also suggested that the number of days below zero could significantly drop from current levels.

16.3.4 Water Availability Rainfall has declined by around 50 mm per decade along the Hunter coast. The contribution of human activities to the rainfall decline is hard to distinguish from natural variability. Although projected changes in average rainfall are currently not clear, given projected increases in evaporation, the catchment is likely to be drier. Despite this trend toward drier conditions, there is also potential for seasonal increases in extreme rainfall events (CSIRO, 2007).

Changes in rainfall and higher evaporation rates are likely to lead to less water for streams and rivers in the Hunter-Central Rivers Catchment, which will have downstream consequences for storages and place strains on water resources. Due to recent trends toward reduced rainfall, as of August 2006, the Glenbawn Dam on the Hunter River and the Glennies Creek Dam were at only 38% of capacity. However, the Lostock Dam on the Paterson River was 90% full (CSIRO, 2007).

The CSIRO (2007) has indicated that the projected rainfall for the Hunter region on average may possibly change by ±7% by 2030 and by ±20% by 2070. However as indicated earlier evaporation rates are expected to increase as the expected average temperatures increase with maximum evaporation rates as high as +40% on current levels a possibility by 2070.

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16.3.5 Additional Matters It is anticipated that conditions will be exacerbated by more extreme environmental conditions e.g. weed infestations, bushfire, etc. It is also anticipated that climate changes (as described above) would also increase heat waves, extreme winds and fire risk.

These are all potential effects that may occur over time due to climate change and Orica, along with all other industries, commercial activities and households may be contributing to the potential climate change effects outlined above. This provides an incentive for Orica to be proactive in considering further GHG emissions reduction and abatement technology in the future to reduce their overall carbon footprint.

16.4 Waste In 2007 Orica committed to moving towards becoming a business that does no harm to people and the environment, including becoming a zero waste company. To support this commitment, Orica is also committed to becoming carbon neutral, water neutral, and providing environmental friendly operations, products and services. Orica’s current targets, called Challenge 2010, aim to move Orica towards improved sustainability. The Challenge 2010 target for waste management aims to see Orica achieve a reduction in waste generation by over 50% per tonne of product produced across the company. Ensuring suitable management of waste has been identified as a key issue for both the construction and operational phases of the proposal to support Orica’s Challenge 2010 targets.

16.4.1 Construction Waste The sources of construction waste for the proposed expansion are likely to include surplus construction materials (scrap metal, asphalt, timber, fencing, concrete and used erosion and sedimentation control materials), waste oil from construction equipment maintenance, office waste (paper, ink cartridges, toner, cardboard), batteries, light globes, domestic waste from construction personnel, packaging waste associated with equipment and materials (plastics, timber pallets, metal wire and cardboard), and possible waste from the demolition of plant. In addition, there may be some liquid wastes generated during cleaning activities associated with preparing equipment for commissioning of the plant.

16.4.2 Operational Waste A list of expected additional wastes from all new sources at the proposed development is listed below. Table 16-4 below also lists the identified strategies to minimise these waste streams.

Table 16-4: Wastes from New Operation Waste Type Avoidance \ Minimisation \ Recycling Strategy Spent aqua ammonia filter Ensure that correct blowdown rates are implemented for the elements Ammonia Vaporiser Weak AN Solution filter elements Ensure that the waste is disposed of to an approved facility. • Minimise sample sizes to prevent product ageing. • Make batches to specification to ensure meets product Coating Agent quality requirements. • Minimise spills. Source bulk deliveries where possible. Empty Drums Used drums to be recycled.

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Waste Type Avoidance \ Minimisation \ Recycling Strategy • Minimise packaging. Inert material (product bags etc) • Organic material excluded from Ammonium Nitrate area. with nitrate contamination • Bund design to contain ammonium nitrate to designated areas. Unavoidable waste stream. Ensure that the waste is disposed of Spent air filter elements to an approved facility. Empty ammonium nitrate bags Bags to be thoroughly emptied and disposed of to landfill. 20L plastic chemical drums Recycled by water treatment contractor Wooden Pallets All reused/recycled by contractor Waste oil from equipment Removed from site by licensed contractor for recycling maintenance Spent oil filters and oily rags Waste disposed of to appropriately licenced facilities. Waste grease Removed from site for disposal at an approved facility Insulation materials removed during Disposed of in accordance with the Newcastle City Council maintenance (e.g. Synthetic mineral requirements. fibres) Sludges generated during Wastes assessed in accordance with the Waste Classification maintenance activities such as Guidelines (DECC, 2008) and disposed of to appropriately cleaning Cooling Tower Basins. licensed facilities. Wastes assessed in accordance with the Waste Classification Chemical cleaning solutions Guidelines (DECC, 2008) and disposed of to appropriately licensed facilities. Scrap metal from redundant equipment, piping and structural Recycled by scrap metal merchant. maintenance Reused offsite at Orica Mining Services sites or sold as Weak AN Solution agricultural fertiliser. Nitric Acid Plant Catalyst Recycled through the supplier Recycled where possible, or assessed in accordance with the Ammonia Plant Catalysts Waste Classification Guidelines (DECC, 2008) and disposed of to appropriately licensed facilities. Fine Ammonium Nitrate Reused offsite in mining or agricultural applications. Blowdowns from Cooling Towers Discharged to the site effluent system. and Boilers Demineralised Water Plant Acidic and alkaline wastes neutralised and discharged to the site Regeneration Solution effluent system. Acidic waste typically Nitric Acid Plants and Ammonium Nitrate Neutralised prior to discharge to the site effluent system. Plants Ammonia Scrubbing Solutions Reused onsite to produce aqueous ammonia solutions for sale. Nitric Acid Scrubbing Solution Reused within the Nitric Acid Plants

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Waste Type Avoidance \ Minimisation \ Recycling Strategy Reused within the Nitric Acid Plants. Surplus process Ammonium Nitrate Process condensate is treated to minimise the ammonium nitrate Condensate concentration prior to discharge to the site effluent system. Steam Condensate Reused within site boiler systems. Recycling hierarchy. Recycled within the Ammonium Nitrate Ammonium Nitrate Solutions Plants where safe to do so. Otherwise reused offsite as a weak generated during plant AN solution if suitable. Otherwise discharged to the site effluent maintenance activities system. Wastes assessed in accordance with the Waste Classification Oily water containing ammonia Guidelines (DECC, 2008) and disposed of to appropriately licensed facilities. Wastes assessed and disposed of to the site effluent system or to Washdown water from maintenance licenced waste disposal facilities depending upon the potential activities contaminants that could be present.

16.4.3 Waste Management Orica is committed to the principles of the Waste Avoidance and Resource Recovery Act 2001, which includes the efficient use of resource inputs and ensuring that resource management options are considered against a hierarchy of the following order:

• Avoidance of unnecessary resource consumption; • Resource recovery (including reuse, reprocessing, recycling and energy recovery); and • Disposal. Waste materials will be recycled where possible, with a comprehensive recycling programme operated at the site. However, chemical contamination can make recycling unfeasible in some situations. Reuse and recycling options will be incorporated into the design of the new plants to minimise the generation of solid and liquid wastes. All non recyclable wastes will be assessed in accordance with DECC guidelines for waste classification and disposed of to approved waste disposal facilities.

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17.0 Residual Risk Analysis 17.1 Approach The Residual Environmental Risk Analysis for the proposed Project is based on a process adapted from Australian Standard AS 4360:2004 Risk Management. The process is qualitative and is based on the Residual Risk Matrix shown below.

Residual Environmental Risk is assessed on the basis of the significance of environmental effects of the proposed project and the ability to confidently manage those effects to minimise harm to the environment.

The significance of environmental effects is given a numerical value between 1 and 5 based on the receiving environment, the level of understanding of the type and extent of impacts and community response to the environmental consequences of the project. This enables both the actual and perceived impacts to be considered. The manageability of environmental effects is similarly given a numerical value between 1 and 5 based on the complexity of mitigation measures, the known level of performance of the safeguards proposed and the opportunity for adaptive management. The numerical value allocated for each issue is based upon the following considerations.

Significance of Effects

5. Extreme Undisturbed receiving environment; type or extent of impacts unknown; substantial community concern.

4. High Sensitive receiving environment; type or extent of impacts not well understood; high level of community concern.

3. Moderate Resilient receiving environment; type and extent of impacts understood; community interest.

2. Minor Disturbed receiving environment; type and extent of impacts well understood; some local community interest.

1. Low Degraded receiving environment; type and extent of impacts fully understood; little community interest.

Manageability of Effects

5. Complex Complicated array of mitigation measures required; safeguards or technology are unproven; adaptive management inappropriate.

4. Substantial Significant mix of mitigation measures required; limited evidence of effectiveness of safeguards; adaptive management feasible. 3.Straight Straightforward range of mitigation measures required; past performance of forward safeguards is understood; adaptive management easily applied.

2. Standard Simple suite of mitigation measures required; substantial track record of effectiveness of safeguards; adaptive management unlikely to be required.

1. Minimal Little or no mitigation measures required; safeguards are standard practice; adaptive management not required

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The numbers are added together to provide a result which provides a ranking of potential residual effects of the project when the safeguards identified in this EA are implemented.

Table 17-1: Residual Risk Matrix Significance Manageability of Effects of 5 4 3 2 1 Effects Complex Substantial Straightforward Standard Minimal 1 6 5 4 3 2 Low (Medium) (Low/Medium) (Low/Medium) (Low) (Low) 2 7 6 5 4 3 Minor (High/Medium) (Medium) (Low/Medium) (Low/Medium) (Low) 3 8 7 6 5 4 Moderate (High/Medium) (High/Medium) (Medium) (Low/Medium) (Low/Medium) 4 9 8 7 6 5 High (High) (High/Medium) (High/Medium) (Medium) (Low/Medium) 5 10 9 8 7 6 Extreme (High) (High) (High/Medium) (High/Medium) (Medium)

17.2 Analysis The analysis of residual environmental risk for issues related to the proposed project is shown in Table 17-2. This analysis indicates the environmental risk profile for the proposed project based on the assessment of environmental effects, the identification of appropriate safeguards, and the Statement of Commitments included in this EA.

Table 17-2: Risk Profile Issue Significance Manageability Residual Risk Air Quality (odour) 1 2 3 (Low) Hazard and risk 2 3 5 (Low/Medium) Geology and soils 2 2 4 (Low/Medium) Stormwater management 1 2 3 (Low) Air quality (construction) 1 2 3 (Low) Visual 1 2 3 (Low) Noise and vibration 1 3 4 (Low/Medium) Biological effects 1 1 2 (Low) Traffic and transportation 2 2 4 (Low/Medium) Resource Implications 1 2 3 (Low) Heritage 1 1 2 (Low) Firewater management 1 1 2 (Low) Social and Economic 1 2 3 (Low)

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Issue Significance Manageability Residual Risk Water Management 2 2 4 (Low/Medium Greenhouse gas emissions 2 2 4 (Low/Medium Air emissions 2 2 4 (Low/Medium

The above residual risk analysis indicates that the proposal presents an overall low to low/medium risk in relation to each of the identified environmental issues, provided that the recommended mitigation, management and monitoring measures are implemented.

17.3 Cumulative Impacts Cumulative impacts on the environment can be considered on a project basis, taking into account each element on a locality or regional basis as well as taking into account the interacting impacts of other projects in the immediate locality and region.

The cumulative impacts of the proposed expansion to the Orica Kooragang Island Facility have been considered in relation to each identified environmental issue in Sections 7 to 16 of this EA and the cumulative impacts of the proposal especially with respect to air quality, noise and vibration, traffic and hazards and risk have been considered in each of the technical studies in respect of this proposal.

As the potential impacts for each of the environmental factors considered are minimal with the implementation of appropriate mitigation measures as described in this EA, no significant cumulative impact is expected.

The cumulative impacts of the proposal must also be considered taking into account other major projects planned in the local area. Of greatest significance is the construction and operation of the Third Coal Loader (Newcastle Coal Infrastructure Group) at Kooragang Island.

Given the distance of the Third Coal Loader to the Orica site and given the overall potential impacts of the expanded Facility assessed within this document, it is considered unlikely that the cumulative impact of the two developments would result in environmental impacts in the local area. However, there is the potential for concerns regarding traffic generation on Tourle Street Bridge during construction. It is envisaged that during the construction of the expanded Facility, Orica would liaise with NCIG and other major projects on Kooragang Island regarding traffic generation.

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18.0 Statement of Commitments

18.1 Introduction In accordance with the EA requirements under part 3A of the EP&A Act, the following Statement of Commitments (SoC) is provided. The SoC sets out Orica’s environmental commitments and details on the environmental management and monitoring of the proposed project during its construction and operational activities.

18.2 Statement of Commitments The SoC prepared in respect of the proposed construction and operation of the proposed expansion of the Ammonium Nitrate Facility has been compiled on an issues basis and is informed by the environmental risk analysis and impact assessment undertaken as part of this EA. The SoC has been written in a format which can be incorporated into project approval issued to act as the conditions of that approval.

Table 18-1: Statement of Commitments Issue Commitment Timing Orica will prepare and implement the following management plans for the project: Construction and General • A Construction Safety and Environmental Management Plan Operation (CSEMP) and • Operational Environmental Management Plan (OEMP). Orica will continue to consult with community through the implementation of the project through: Community Construction and Phone number Consultation • Operation • Regular briefings to community via the Reference Group • Information on project Web Page Orica will incorporate engineering measures into its plant design to ensure it minimises the impact of the proposed expansion on air quality, including:

• Catalytic NOx Abatement to reduce NOx in the tail gas of the Nitric Acid Plant No. 4 to a 99 percentile concentration limit of 150ppm NOx. • Air scrubbing and recirculation technology on the new AN Odour and Plant No.3 Prill Tower to minimise particulate emissions from Detailed Design Air Quality the new tower based on a 100 percentile concentration limit for TSP’s of 20 mg/m3. • Installation of a Refrigeration Purge Gas Scrubber on the Ammonia Plant to reduce NOx emissions from the Ammonia Plant to a 100 percentile concentration of 250 mg/Nm3 NOx • Scrubbing of ammonia emissions from the Nitric Acid Plant No.4 and Ammonium Nitrate Plant No. 3 during normal plant operation.

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Issue Commitment Timing As part of its improvement plans for its existing operations, Orica will also continue to investigate options to further reduce particulate and PM10 emissions from the existing AN Plant No.1 Ongoing Odour and Prill Tower Air Quality Within the CSEMP, Orica will include measures to control dust Construction during construction. Orica is committed to the maximum practical GHG reduction for its existing and expanded facility as part of its company sustainability goals. Greenhouse Through the course of the expansion project, it is Orica’s intention Detailed Design Gas to install N2O abatement technology on the proposed new nitric acid plant (NAP4) and retrofit technology to the existing nitric acid plants. Such technology is expected to reduce N2O emissions from nitric acid production by at least 65%.

Noise and vibration would be managed during construction and form part of the CSEMP. The CSEMP would include a monitoring Construction program, mitigation options and management practices.

As part of the expansion project Orica will design new plant and equipment to result in boundary noise at existing residential properties to be 10dB(A) less than current operations incorporating design measures to minimise the noise impact of new plant. Orica Noise and will agree a plan with DoP and DECC as to how to verify this Design and Vibration commitment. Orica propose to prepare a noise report 6 months Operation after completion of the project to demonstrate that the noise emissions from the new plant and equipment meet with this commitment.

Orica will continue to work with DECC to implement the programme to reduce noise emissions from the existing plant Ongoing based on the existing PRP in the site EPL.

Orica will implement the following hazard and risk reduction measures to reduce the risk profile associated with its operations at Kooragang island.

• Reconfigure bulk ammonium nitrate storage arrangements Hazard and through storage segregation to reduce the risk associated Detailed Design Risk with the onsite bulk storage. • Reconfigure packaged ammonium nitrate storage arrangements including the withdrawal of timber pallets currently used in the store, to further reduce the likelihood of fires in storage areas.

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Issue Commitment Timing • Implement additional ammonia detection and isolation systems to reduce the potential quantity released in an ammonia leak. • Rationalise pressurised liquid ammonia storage and piping systems to reduce inventories and simplify isolation to minimise the potential quantity of ammonia released in an Detailed Design ammonia leak. (Cont) Hazard and These measures will be in place by the completion of the project. Risk (Cont) Orica will also continue efforts to explore further practicable opportunities to reduce the risks associated with its operations.

Orica will undertake a Hazard Analysis of the expanded operations 3 years after completion of the project to update the hazard Operation analysis contained in the PHA and subsequent FHA.

Orica will ensure the provision of adequate parking during the Construction construction phase. Parking Orica will ensure the provision of adequate car park facilities for Operation additional staff anticipated for the expanded facility. Orica will ensure that the movement of oversized loads to the site during the construction phase are undertaken in accordance with Construction the standard procedures documented by the RTA and appropriate Transport approval from the RTA. Orica will ensure that the detailed design of the new access points will be undertaken in accordance with the relevant standards and Detailed Design guidelines to cater for B-Doubles.

The CSEMP will include requirements for the management of Construction erosion and sedimentation during the construction project. Surface Water Orica will incorporate measures into the plant design to minimise Quality the generation of contaminated stormwater runoff in the Detailed Design catchments such as bunding, roofing, first flush systems etc. where appropriate.

Orica will ensure effluent recovery measures are integrated into the new plant design, including the use of equipment to minimise water consumption, such as water-limiting devices on ANP3 Detailed Design Effluent washdown systems and hoses, mist eliminator pads on Cooling Towers to minimise loss of water droplets from the cooling tower system, and recycling liquid streams within site processes where possible.

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Issue Commitment Timing Orica will also implement design measures to improve the efficiency of resource use including

• Consideration of water efficiency and recycling in design of new plant Resource • Modification to the Ammonia Plant with a resultant Detailed Design Implications improvement in gas efficiency • Implementation of steam driven compressor trains versus electrical drives where appropriate (i.e. Ammonia Plant modification) • Consideration of optimising energy recovery into a usable form in the Nitric Acid Plant design Orica will incorporate into the design of the proposal appropriate use of sealed areas, bunding and double containment to minimise the potential for failures that could result in soil and groundwater contamination. All process areas and tanks will be bunded in accordance with relevant Orica and Australian Standards. Plant Detailed Design areas will be classified according to risks to soil and appropriately sealed. The use of underground piping and pits will be minimised and, where unavoidable, secondary containment will be provided for systems that could impact on the environment in the event of a loss of containment Soils and The CSEMP will detail the measures to be implemented to Groundwater address potential impacts to soil and groundwater during construction including:

• A requirement that all excavated soils be tested to identify whether there are contaminants present in the soil. Construction • Require soil testing to be conducted on excavated soils to determine the presence of acid sulphate soils (ASS) or other contaminants. All construction activities and works will be in accordance with “Managing Urban Stormwater; Soils and Construction” (Landcom, 2004). Orica will consider vegetation/screening options along the eastern Visual boundary that can be implemented and maintained in accordance Amenity with the onsite Security Plan for the Facility. The CSEMP will include requirements to ensure that Flora and sedimentation and erosion from the construction activities are

Fauna minimised to prevent potential impacts to nearby waterbodies and habitat.

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Issue Commitment Timing The CSEMP will include the following requirement in relation to heritage considerations:

• Any Aboriginal objects that are uncovered during the remediation works should be left undamaged and in situ. Heritage Construction works should cease and an assessment be conducted by a qualified archaeologist in consultation with Aboriginal stakeholders and the DECC for direction as to its preservation, historical recording and / or removal if such items are uncovered. Orica will develop a Waste Management Plan for the new plant detailing the means by which Orica will manage recyclable and waste materials at the site. This will include:

Recycling of solid and liquid waste materials where possible. • Waste • Classification of all non recyclable wastes in accordance with DECC guidelines for waste classification and disposed of to approved waste disposal facilities by licenced contractors. • Monitoring of recycling and waste disposal systems to assess the overall effectiveness of the plan.

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19.0 Project Justification

19.1 Introduction The proposed development provides an opportunity to expand an existing successful operation which is consistent with other industrial activities in the area, and has the potential to contribute positively to the local, regional State and national economies. This chapter provides a discussion of the justification of the plant expansion based upon the site location and economic, biophysical and social considerations. This chapter also examines Ecologically Sustainable Development (ESD) as it relates to the plant expansion and also the consequences of not proceeding.

19.2 Suitability of Location The subject site has a long-running history of similar activities to the proposed development. The proposed site contains an operational ammonium nitrate facility within an operating transport network, with convenient and ready access to wharf facilities for export. The manufacture of ammonia, nitric acid and ammonium nitrate has occurred at the site since the original facility was commissioned in 1969. The site’s proximity to regional mines, which use Orica’s product, demonstrates the site’s suitability for similar activities to be ongoing, and to be expanded.

The site is surrounded by industrial and port related activities. The site provides further opportunities for industrial expansion across the island while maintaining a sustainable impact on the environmental, social and cultural elements of the Kooragang Island environment. Further, the subject site is located at least 800 metres from the nearest residential properties at Stockton, which presents a buffer to minimise conflicting land use impacts. However, mitigation measures will be implemented during the construction and operation phases to ensure the expansion has minimal adverse impact.

19.3 Strategic Justification Schedule 2 of the EP&A Regulation requires that justification of any proposed project be provided with regard to biophysical, economic and social considerations together with the principles of ESD. The assessment of the proposal undertaken in this EA, and in particular Section 6, has integrated these considerations and principles.

19.3.1 Biophysical Considerations The existing site is highly disturbed through previous operational activities on Kooragang Island as well as the Island being reclaimed from the Hunter River. Therefore, the key biophysical considerations for the proposed project with respect to potential impacts are those to receivers external to the site.

The key potential biophysical effects associated with the proposed development, as detailed in Section 6 of this EA include:

• Noise; • Air quality, including air emissions, odour and greenhouse gas emissions; and • Water quality including effluent management and stormwater. Air quality impacts (Section 7) have been predicted to be manageable, particularly with the implementation of appropriate design and management strategies. Impact to air quality from potential pollutants has been demonstrated to be negligible, with no predicted significant impact to sensitive receivers. The proposed development will incorporate modern technologies to minimise NOx emissions from the new Nitric Acid Plant (NAP4) and PM10 emissions from the new Prill Tower (ANP3).

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The potential biophysical effects as they relate to GHG emissions are detailed in Section 8. Whilst Orica has a significant footprint of 1.7 Mtpa CO2-e dominated by its emission of nitrous oxide (N2O), (a by-product in nitric acid manufacture), Orica is committed to maximum practical GHG reduction for its existing and expanded facility as part of its company sustainability goals. Through the course of the expansion project it is Orica’s intention to install N2O abatement technology on the proposed new Nitric Acid Plant (NAP4) and also retrofit technology to the existing Nitric Acid Plants. This will reduce the site’s total GHG footprint to approximately 1.4Mtpa CO2-e, a 20% reduction.

Noise emissions (Section 9) during construction would be primarily limited to day time construction and are predicted to have no significant impact on the local community provided appropriate and recommended design measures are implemented. The noise assessment demonstrated that the noise contributions from the proposed expansion plant and equipment during operation would be at least 10 dBA lower than the existing plant contributions, hence they are not expected to impact upon the nearby residential receivers at Stockton. To ameliorate potential noise impacts, design strategies have been incorporated into the project.

The anticipated overall demand on external resources (Section 13) will increase, however, Orica is seeking to improve natural gas and electricity efficiency to minimise the increased demand on energy resources. Orica, as a corporation, has set internal environmental and sustainability targets for their business. As part of this internal strategy, Orica has committed to reduce its resource consumption per tonne of product by 15% for electricity, 15% for water and 50% for waste across the company. Orica is also investigating, in cooperation with Hunter Water Corporation, the possibility of using recycled water in place of potable water in the production processes.

Additionally, Orica is also an active participant in the Federal Government’s Energy Efficiency Opportunities program and the NSW State Government’s Energy Saving Action Plan Program. The outcomes of these medium term programs promote investigations into energy efficiency which, in the case of the proposed development, is likely to result in further reductions of energy consumption.

Another significant environmental benefit relating to this proposed development is the introduction of new technology to improve energy efficiencies within current and proposed plant processes. The plant expansion includes replacing an electric driven air compressor motor in the Ammonia Plant with a more efficient steam driven motor. This plant modification alone will enable a significant reduction in the demand for electricity (approximately 1.5 MW). The expansion is also investigating the installation of an electrical generator on the NAP4 compressor unit to enable the recovery of electricity from steam created in the new acid plant and returning approximately 2.2MW of electricity. The steam system across the site will also be further integrated to optimise steam usage.

This EA demonstrates that the construction and operation of the proposed Ammonium Nitrate Facility expansion will not result in significant adverse environmental impacts with the implementation of appropriate safeguards. This EA concludes that the residual risk (Section 17) associated with these potential impacts, after appropriate mitigation and management measures are implemented, is considered low.

The project is therefore justifiable in terms of the biophysical elements of the environment.

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19.3.2 Economic Considerations The proposed development will be a significant contributor to the local, regional, State and national economies and the international market. Economic contributions will be generated from domestic and export earnings, taxes, salaries, and purchases of goods and services during the construction and operational phase of the development. The majority of product from the facility will be used for the manufacture of explosives in the mining and quarry industries to support growth in those industries, largely in domestic business.

The proposed development provides an opportunity to expand an existing successful operation, which is consistent with other industrial activities in the region. The site’s proximity to regional mines and export facilities demonstrates the site’s suitability for similar activities to be ongoing, and to be expanded as Orica’s customers increase their needs for mining services, explosives and related products.

The proposed development would contribute to the improvement of Australia’s trade balance through the import substitution of these products and subsequent creation of export opportunities.

The proposed development would provide local direct and indirect employment opportunities. The two year construction phase is expected to require a construction workforce peaking at 250 personnel. The operational phase of the project is expected to provide long term employment for up to 20 personnel and up to an additional 50 contractors providing services such as maintenance, transport and support services.

The proposed development is, therefore, considered to be justifiable from an economic perspective.

19.3.3 Social Consideration The potential effects of the proposed development on social and cultural aspects of the area were examined in this EA, and included consideration of:

• Visual amenity; • Air quality; • Noise; • Hazard and Risk; and • Traffic and transport. The assessments presented in this EA regarding visual amenity, air quality, noise, hazard and risk, heritage and culture, and transport and traffic, indicate that provided appropriate mitigation and management measures as outlined in the Statement of Commitments are implemented, the proposed development would have a minimal and acceptable impact on socio-cultural issues.

The proposed development will be situated within the existing industrial environment and the visual amenity/appearance will be consistent with existing facilities in the industrial area and on the subject site. The development footprint will not increase for the proposed development; however, the proposed development sees a slight increase in the density of industrial infrastructure situated on the southern end of Kooragang Island. Proposed infrastructure will be of equivalent height or shorter than that currently on site, which is unlikely to result in a significant modification to the existing skyline. Operating hours for the proposed development will remain the same as existing operations.

As demonstrated in this EA, the predicted air quality impacts (Section 7) due to the proposed expansion are negligible. The proposed installation of appropriate technologies, such as NOx abatement on the new Nitric Acid Plant and scrubbing on the new Ammonium Nitrate Plant Prill Tower, would assist in further reductions of potential impacts to the surrounding environment. Also, through the

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implementation of N2O abatement technologies on the new Nitric Acid Plant and existing Nitric Acid Plants, the greenhouse gas impact of the site will be reduced from its current level (Section 8).

Similarly, the noise assessment (Section 9) demonstrated that incorporation of design strategies for the proposed new plant, such as acoustic enclosures for equipment (e.g. compressors), would result in noise generated from new plant and equipment being more than 10 dB(A) lower than the existing noise generation levels from the facility under neutral calm conditions. These predicted noise levels for the expanded facility are not expected to impact upon the nearby residential receivers at Stockton.

As a result of the proposed development the hazards and risk associated with the site’s operations will be significantly reduced (Section 10). The site has made significant improvements in its risk profile since the implementation of recommendations made in the 1992 NSW Department of Planning’s Newcastle Kooragang Island Risk Assessment Study (DoP, 1992). The new plant and equipment associated with the expanded facility has a profile which meets all DoP risk criteria. Additionally improvements to existing infrastructure through the course of the project will further reduce the site’s risk profile and satisfy the risk criteria for intensification of hazardous activities on an existing site.

Traffic (Section 11) associated with the operation of the proposed development is likely to increase slightly. The traffic impact assessment conducted as part of the EA concluded that the proposal is not likely to result in significant impact on the road network surrounding the site. General road performance levels would remain unchanged and within technical intersection and road capacities.

Furthermore, the proposed project is considered to be in accordance with current demand and will facilitate meeting the future consumer demand for ammonium nitrate, ammonia and nitric acid production in the region. This would involve significant contributions to the local, regional, State and national economies resulting in job creation.

The proposed project is therefore justifiable on social grounds.

19.3.4 Ecologically Sustainable Development Schedule 2 of the EP&A Regulation establishes four interrelated principles of ecologically sustainable development (ESD): the Precautionary Principle; intergenerational equity; biological diversity and ecological integrity; and valuation and pricing of environmental resources. Under the Environmental Protection and Biodiversity Conservation (EPBC) Act 1999, decision-making processes for the proposed development need to be addressed by including economic, environmental, social and equitable considerations.

The ESD principles and decision-making processes associated with the proposed development are provided below.

Precautionary Principle

The precautionary principle outlines the need to act with caution to prevent environmental degradation whether or not a risk to the environment has been scientifically demonstrated. The identification of potential impacts to the environment has been assessed through detailed specialist studies undertaken as part of this EA. This precautionary approach has enabled the proposed development to be designed to avoid significant impacts particularly for environmental and social issues such as air quality, risk and noise. The detailed environmental assessments have identified appropriate environmental management measures to be developed and implemented to minimise potential impacts so that significant adverse environmental outcomes are avoided. This precautionary approach will enable the proposed development to proceed while mitigating environmental degradation.

As such, the proposed project is consistent with the precautionary principle.

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Intergenerational Equity

The principle of intergenerational equity places an onus on ensuring that the health, diversity and productivity of the environment are maintained, if not enhanced, for the benefit of current and future generations.

The proposed project would provide further social and economic benefits to the community through employment opportunities, import substitution, and creation of export opportunities. The mining and quarrying industries in the Hunter Region will also benefit from the security of improved future supply of ammonium nitrate. Secure supply of ammonium nitrate will enable further growth in these economically important industries.

The proposed project would have minimal effect on the health of either the environment or local residents during construction and operation, through the implementation of mitigation measures.

The EA involved an assessment process aimed at fully understanding potential impacts, particularly site contributions to greenhouse gases (Section 8). Orica is committed to maximum practical reduction of greenhouse gases and it is its intention through the course of the project to reduce the greenhouse contributions from the facility through the introduction of technologies onto new and existing plant.

The proposed project represents a move towards the use of more advanced and efficient technology, and therefore an improvement over current conditions and practices. The maintenance of environmental integrity of the site will not be reduced as a result of the proposed project.

The proposed project is, therefore, considered to be consistent with the principle of intergenerational equity.

Biological Diversity and Ecological Integrity

This principle requires the maintenance and conservation of a full and diverse range of plant and animal species. An assessment of the effects of the proposed development on biological diversity and ecological integrity is contained in Section 16.1.

Kooragang Island has been subjected to significant disturbance through land reclamation and past industrial development, resulting in the site having insignificant ecological value. The proposed environmental management practices to be implemented during construction and operation of the facility would minimise any adverse effects on the ecology of the Hunter River, Newcastle Harbour, associated waterways and other sensitive environments.

As such, the proposed project is believed to be consistent with the principle of biological diversity and ecological integrity.

Valuation and Pricing of Environmental Resources

The Intergovernmental Agreement on the Environment (IGAE) and POEO Act 1997 require improved valuation, pricing and incentive mechanisms to be included in policy making and program implementation. In the context of environmental assessment and management, this would translate to environmental factors being considered in the valuation of assets and services.

Integration of environmental and economic goals is a key principle of ESD, which can be measured undertaking a cost-benefit analysis, that is, by measuring the costs of proceeding with a project against the benefits arising from the project.

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Given the different values placed on the environment, and the various components of the environment, it is difficult to assign a monetary value against the environmental costs and benefits associated with the project. In this context, the approach adopted for this project is the management of environmental impacts through appropriate safeguards, and to include the cost of implementing recommended safeguards in the total cost of the project.

Relevant to the consideration of the valuation and pricing of environmental resources are the impact assessment and alternative options which have been developed during planning of the proposed Ammonium Nitrate Facility Expansion. The relative costs of manufacturing locally with modern plant design are deemed to have a lower cost on the environment when compared to importing AN products to the Hunter Region from interstate or overseas.

The value of the environment is also managed through the legislative process by imposing financial penalties or requirements to rehabilitate on persons responsible for polluting the environment.

Orica would implement the safeguards and monitoring requirements outlined in this EA to minimise environmental impacts caused by the proposal, and to minimise the potential for pollution to occur.

The proposal will also capitalise on the use of the existing infrastructure to supply electricity, gas and water services to the proposed site expansion location. This use of existing infrastructure reduces the cost on the environment by limiting the resources required to integrate a new site to the electricity, gas and water supply networks.

Decision-making Process

Under the EPBC Act 1999, decision-making processes need to include economic, environmental, social and equitable considerations in the short and long term. This EA has provided an assessment of the proposed development in terms of these considerations. This will then need consideration by the Department of Planning in determining approval for the proposed development under Part 3A of the NSW EP&A Act, and by the Department of Environment and Climate Change in determining the conditions of the EPL that will require updating for the operation of the existing facility.

19.4 Consequences of Not Proceeding The expansion of the mining industry in the Hunter Valley, across Australia, and overseas is driving the increased demand for AN production at the Kooragang Island facility. The continued growth and expansion in the mining and extractive industries Australia wide has spurred considerable additional demand for AN in New South Wales, Queensland and Western Australia. Whilst the current global financial crisis has softened short term demand, long term growth is expected to remain steady. The current demand forecast for AN in the region supplied from Kooragang Island shows continued considerable growth over the short to medium term. The current AN production capacity of the existing facility is 430 ktpa, with a maximum latent capacity of 500 ktpa if further nitric acid were available. An increase to 750 ktpa plant capacity is required to satisfy future predicted market demand.

AN will necessarily be imported into the Hunter region from interstate or internationally if the proposed development does not proceeded. Some ammonium nitrate is already imported into the Port of Newcastle by Orica’s competitors. However global shortages are possible in the future should strong demand increases from global mining and agricultural markets return.

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Production of ammonium nitrate in Australia has increased significantly over the last 10 years; however the expanding mining and extractive industries are consuming the domestic supply. Ammonium nitrate is currently produced at four manufacturing plants around Australia. These are:

• Orica Newcastle, NSW – 430 ktpa; • Orica Gladstone, Qld – 570 ktpa • CSBP Kwinana, WA – 470 ktpa; • QNP Moura, QLD – 180 ktpa. QNP is currently in the process of expanding its Moura operation by 30ktpa, and is likely to be operational in 2009. Additionally, a new 330 ktpa Ammonium Nitrate plant is planned for Moranbah, Central Queensland by Incitec Pivot Limited with production stated to commence in 2011. Burrup Fertilisers have mooted an expansion into ammonium nitrate (300-350ktpa) in north west Western Australia, with commencement post 2012.

Import transport options for the Hunter region from alternative supply sources include by road and/or rail from Queensland or Western Australia and by ocean transport vessel from a number of international locations. Ocean transport will significantly increase the cost of AN while sourcing additional supply from within Australia may become increasingly more difficult as demand for AN approaches supply limits. If Hunter region businesses are forced to purchase AN from outside of the region (including internationally) the transport related greenhouse gas emissions per tonne of product will increase significantly. If AN for the Hunter Region is sourced from Queensland or Western Australia there will be a steady rise in heavy road transport and rail required for the distribution of the AN product to Hunter regional businesses.

If the proposed development does not proceed, the Kooragang Island facility will soon reach its operating capacity. Competition from other companies may encourage Orica to investigate investing in capacity improvements in its AN plant in Gladstone or elsewhere in Australia. Orica is expanding its AN production globally with a 300 ktpa facility in Indonesia and investigations into a new plant in Latin America. If the proposed development does not proceed then the improved economies of scale, improved plant efficiency and the ability of Orica to satisfy local demand for AN will quickly diminish.

Mining customers see security of supply of AN as a key issue for their future growth plans. Major customers want to continue to be able to access high quality AN from domestically produced sources, to underpin their future operations with cost competitive and productive operations. Maintaining productivity is a key issue for Hunter Valley miners, who face strong competition from Indonesian and Chinese coal producers in Asian coal markets.

Many customers see reliance on long-term import supply chains as a risk. Poorer quality material from import sources can compromise operational productivity in explosives manufacture and loading. Also of concern to these customers is supply surety, given the tightening supply and global regulatory environment around AN.

If the project does not proceed, there may be a potential impact on the cost and provision of AN within the Hunter region.

Failure to provide these products in the Hunter region would potentially increase transport costs associated with supply of product from markets external to the region, interstate or overseas. The costs of production for extractive and mining operations may increase. Also, this would increase consumption of fuel and potentially an increase in congestion of heavy vehicles along main transport routes.

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The consequences of not proceeding with the proposed development gravitate around an increasing demand for AN locally and globally while global exports are reducing from the traditional key sources. If local demand for AN is not met with local product then local extractive and mining industries may face higher costs of production in the short term, with the potential for sustained AN price rises where demand exceeds supply and the spectre of unmet demand. The economic consequences of the proposed development not proceeding include the loss of investment capital, the ongoing loss of increased employment and continued increased operating expenditures in the region.

19.5 Conclusion The proposed development, if operated with consideration of the Statement of Commitments, is considered to be in accordance with the principles of ecologically sustainable development. The facility would:

• Provide additional modern plant and technologies to improve plant efficiencies resulting in reduced greenhouse gas emissions; • Support an expanding mining industry both regionally and in Australia, with benefits from improved balance of payments; • Provide improvements to the operating environmental performance of the overall AN facility; and • Provide additional regional employment prospects and subsequent economic benefits to the local, regional and national economies. Overall the project would be upgrading existing infrastructure and introducing new plant with modern technology with improved plant efficiencies. Greenhouse gas emissions will be minimised for new plant and a program of emission reduction for existing nitric acid plants will be progressed. The hazards and risk associated with the sites operations will be reduced. Biodiversity would not be adversely impacted. Visual amenity will remain largely unchanged, with the new development occurring within the existing industrial landscape.

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20.0 Summary of Findings

The proposed expansion of the Kooragang Island Facility involves the following primary components:

• Modification of existing Ammonia Plant; • Additional Nitric Acid Plant (NAP4); • Additional Ammonium Nitrate Plant (ANP3); and • Associated infrastructure. The proposal is identified as a ‘Major Project’ under SEPP 2005 (Major Projects) of the EP&A Act, therefore the Minister for Planning is the consent authority.

The proposal has been subject to environmental assessment in accordance with Part 3A of the EP&A Act and the requirements issued by the Director General. The EA has concludes that whilst the project would have some residual impacts, the mitigation measures identified would effectively reduce these to an acceptable level of environmental risk.

Overall the project would be upgrading existing infrastructure and introducing new technology which would improve plant efficiencies, risk profile and environmental performance in a number of areas whilst minimising environmental impact in others. Biodiversity would not be adversely impacted. Visual amenity will remain largely unchanged, with the new development occurring within the existing industrial landscape. The project is considered justifiable on biophysical, economic and social grounds, and is considered to be consistent with the principles of ESD.

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Deltawerken online, 2004. available online: http://www.deltawerken.com/English/10.html?setlanguage=en (accessed 14/7/2008)

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DoP, 1994. Multi Level Risk Assessment, NSW Department of Planning, Sydney

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Proposed Ammonium Nitrate Facility Expansion - Environmental Assessment Publications Volume 2 Volume 1 Appendix A-K Main Report

Appendix A Director General’s Requirements Appendix B Clause 8 Opinion Appendix C Existing Primary Consents and Licenses Appendix D Community Consultation Appendix E Air Quality Impact Assessment Appendix F Greenhouse Gas Emissions Impact Assessment Appendix G Noise Impact Assessment Appendix H Hazard and Risk Assessment Appendix I Traffic and Transport Assessment Appendix J Stormwater Management Assessment Appendix K Threatened Species Lists