MAJOR PROJECT ASSESSMENT Cobbora Coal Project (10_0001) Director-General’s Environmental Assessment Report Section 75I of the Environmental Planning and Assessment Act 1979 February 2014 Cover Photos, Clockwise from top left: Laheys Creek cemetery; Spring Ridge Road crossing Laheys Creek; Sandy Creek semi- permanent pool; Pit B near Dapper Road looking west to east. © Crown copyright 2014 Published February 2014 NSW Department of Planning and Infrastructure www.planning.nsw.gov.au Disclaimer: While every reasonable effort has been made to ensure that this document is correct at the time of publication, the State of New South Wales, its agents and employees, disclaim any and all liability to any person in respect of anything or the consequences of anything done or omitted to be done in reliance upon the whole or any part of this document. Cobbora Coal Project Environmental Assessment Report EXECUTIVE SUMMARY Cobbora Holding Company (CHC), a public trading enterprise owned by the NSW Government, is seeking approval for a new open cut coal mine on land located near the towns of Gulgong and Dunedoo, about 60 kilometres (km) east of Dubbo. The proposed mine – known as the Cobbora Coal Project, has potential to provide thermal coal for Central Coast and Hunter Valley power stations and/or for export markets. The Cobbora Coal Project involves the extraction of 392 million tonnes of coal over 21 years, at an extraction rate of up to 20 million tonnes of run-of-mine (ROM) coal a year. The project infrastructure includes a coal handling and preparation plant, a rail load-out facility, a 28 km rail spur line to link into the Dunedoo-Gulgong Railway, a 26 km water pipeline, temporary construction accommodation village, and other ancillary infrastructure. The project also involves the closure and realignment of local public roads including Spring Ridge Road and Dapper Road. The site is located within the Mid- Western, Warrumbungle, and Wellington Local Government Areas. The City of Dubbo is also identified as a key employment source for the project workforce. The Government has announced its intention to sell or lease the project, if it is approved. The recent large land acquisition program by CHC to support development of the mine, coupled with the Government’s decision to sell or lease the mine with consequential delays in project commencement, have raised concerns over socio-economic impacts, particularly on Dunedoo and the surrounding district. These concerns have been recognised by the Government through the implementation of the $20 million Cobbora Transition Fund, separate to the Department’s consideration of the project’s impact. Under transitional arrangements, the project is being assessed as a ‘major project’ under the now- repealed Part 3A of the Environmental Planning and Assessment Act 1979 (EP&A Act), and requires the approval of the Minister for Planning and Infrastructure. However, under the Minister’s existing delegations, the project application must be determined by the Planning Assessment Commission (PAC) due to the number of public objections to the project. The project is also a ‘controlled action’ under the Commonwealth Environment Protection and Biodiversity Conservation Act 1999 . This means it also requires approval from the Commonwealth Minister for the Environment. The Department exhibited the Environmental Assessment (EA) for the project from 5 October until 16 November 2012, and the Preferred Project Report (PPR) for the project from 15 February 2013 until 8 March 2013. In total, the Department received 401 submissions on the project: 31 from government authorities, 42 from special interest groups and 328 from the general public. Most of the public submissions objected to the project, with key issues being the justification of the project and impacts on air quality. Concerns were also raised over water impacts as a result of water use from the Cudgegong River, impacts on biodiversity, Aboriginal heritage, agricultural productivity, and transport and noise impacts. Given the level of public interest in the project, the Minister asked the PAC to review the merits of the project, and to hold public hearings during the review. In accordance with its terms of reference, the PAC review focused on the proposed mine plan and potential health, amenity, biodiversity, water, and social and economic impacts of the project. The PAC completed its review in April 2013, concluding the project had merit and should be approved subject to stringent conditions. Overall, the PAC made 26 recommendations, most of which have been incorporated into the Department’s recommended conditions for the project. In August 2013, CHC further modified its project to address the recommendations made by the PAC and submitted a revised PPR to the Department. In particular, changes were made to the mine plan by reducing the number of operating pits and final voids, with a consequent reduction in the area of disturbance at any one time. The modifications also reduced the impacts on biodiversity including threatened flora and fauna species. The revised PPR was placed on the Department’s website and attracted further submissions. The revised project involves the supply of up to 220 Mt of thermal coal mainly for electricity generation at domestic power stations over its 21 year operational life. 1 Cobbora Coal Project Environmental Assessment Report The Department considers this to be a significant coal resource, which would provide a secure supply for the domestic market for some time. It is also satisfied that substantial benefits would flow from the project to the local, regional and State economies, including direct and indirect employment opportunities for rural communities with up to 590 operational and 550 construction personnel required. There would be a capital investment over the life of the mine of around $1.3 billion with more than $407 million in direct revenue for the State Government from coal royalties. These are substantial benefits, which should be given significant weight in assessing the project’s overall merits. The Department has assessed the EA (including the PPR and revised PPR), submissions on the project, the PAC’s review report and CHC’s response to the PAC recommendations. Based on this assessment, the key areas of concern surrounding the project are the potential biodiversity, land management, amenity/health, water and socio-economic impacts of the project. With regard to biodiversity impacts, the Department is satisfied that the revised mine plan has been designed to avoid impacts on threatened species as far as reasonable and feasible, particularly when a range of other constraints - such as the location of the most economic coal resource on site, operational costs, competing land-use for agricultural land and environmental impacts associated with longer haulage distances – are taken into consideration. Furthermore, a significant biodiversity offset strategy is proposed, including: • protection and enhancement of a minimum of 8,827 ha of land for conservation: • supplementary offsets towards threatened species research and programs including $500,00 funds towards research or measures to assist the recovery of threatened cave roosting bats, Fuzzy Box and Grey Box Endangered Ecological Communities; • translocation and propagation trials for threatened flora species; • additional biodiversity restoration through the ILMP including a minimum of 185ha restoration to improve woodland connectivity to the north of the mine; and • a rehabilitation strategy targeting restoration of both agricultural lands and woodlands. With regard to land management, the Department notes that CHC has acquired in the order of 45,800 ha of landholdings for the project, including land required for biodiversity offsets. The Department notes the concerns of the local community, in particular submissions from Warrumbungle Shire Council on socio-economic impacts associated with this acquisition, such as loss of local landowners and subsequent economic impacts - particularly on Dunedoo. The Department supports the PAC recommendation for the preparation and implementation of the ILMP to ensure the landholdings are appropriately managed for either biodiversity conservation or ongoing agriculture enterprises. The Department has recommended that this plan be developed in consultation with the relevant local councils and key Government agencies. A key objective of the ILMP is to provide an employment, training and skills development program. While the PAC were generally satisfied with the project’s proposed rehabilitation strategy (subject to further consideration of issues raised by their expert Dr Mark Burns), residual concerns were raised by the Department of Primary Industries on the ability to successfully rehabilitate land back to Class III and Class IV land capability. In addition, concerns were raised regarding management of soils, need for detailed performance and completion criteria, weed management and monitoring of agricultural productivity. The Department is satisfied that these concerns can be suitably managed through the proposed Rehabilitation Management Plan and ILMP, and has recommended that these plans be developed in consultation with Agriculture NSW. With regard to amenity and health (noise, dust, visual and lighting) impacts, the Department notes that the land acquisition program by CHC has created a substantial buffer to most receptors. In regards to noise impacts, mine operational noise limits have been set at 35dB(A) at all privately-owned