Plans to expand a major coal mine near Wollongong in the NSW Illawarra region have been knocked back by the state’s Independent Planning Commission due to risks to local water resources.
Mining corporation South32 sought to expand the Dendrobium coal mine at Kembla Heights, extracting an additional 78 million tonnes of coal from two new areas, and to extend the mine’s life through to 2048.
The NSW Department of Planning in October recommended the approval of the mine expansion, saying it would provide “major economic and social benefits”, including by protecting about 400 local jobs.
But the Independent Planning Commission on Friday deemed the project’s risks to Greater Sydney’s drinking water catchment were too high.
It found the mine design did not successfully balance the revival of the mine and the maintenance of a safe drinking water supply.
Adverse impacts on the local environment were also likely to be permanent.
“The level of risk posed by the project has not been properly quantified and based on the potential for long-term and irreversible impacts – particularly on the integrity of a vital drinking water source for the Macarthur and Illawarra regions, the Wollondilly Shire and Metropolitan Sydney,” the IPC said.
Concerns were also raised about the effect of the mine expansion on biodiversity, upland swamps and Aboriginal cultural heritage sites.
Wollongong MP and NSW Labor natural resources spokesman Paul Scully said the IPC’s decision came as a surprise and would create uncertainty for locals.
“This decision by the IPC now has serious implications for thousands of workers and local businesses, given the importance of South32 to the Illawarra’s manufacturing supply chain,” Mr Scully said in a statement.
The NSW Minerals Council also condemned the IPC’s decision, saying it would prove a “dagger at the heart of the Illawarra economy” and would have negative flow-on effects at the nearby Port Kembla steelworks.
But the Greens and environmental groups supported the decision, saying it should be “the nail in the coffin” for mining near water catchments.
“Throughout NSW I’ve witnessed rivers, creeks and wetlands that have literally dried up due to the subsidence caused by longwall mining underneath, or in close vicinity to them,” Greens MP Cate Faehrmann said in a statement.
Ms Faehrmann also lauded the IPC for taking the potential carbon emissions resulting from the mine’s expansion into account in its deliberations.
Greenpeace Australia Pacific’s Martin Zavan said: “Thankfully the IPC has made the right decision to prioritise Sydneysiders’ drinking water over the declining profits of coal mining companies.”
South32 said in a market statement to the ASX that it was aware of the IPC’s findings and would continue to engage with project stakeholders.
The company’s stock price dipped by almost three per cent on Friday to sit at $2.65 just before 11.30am.