5 February 2020
The Independent Planning Commission has rejected South32's application to expand it's Dendrobium coal mine from 2030-2048.
A recap...
1. BAEconomics aka Brian Fisher was commissioned directly by the NSW Department of Planning, Industry and Environment to conduct the "independent review" of South32's economic assessment.
This was a potential breach of procurement policy - read here.
2. Fisher was requested to assess the risks associated with interruptions in the supply of coal from Dendrobium to Port Kembla Steelworks.
3. Fisher reported that the coal from Dendrobium (Wongawilly Seam coal) is crucial to the local blend of coal (Wongawilly seam coal + Bulli seam coal). According to Fisher and the NSW DPIE, coal from the Wongawilly seam is difficult to replace and critical to the region's economic survival.
4. Fisher's review presented a specific 'worst case scenario.' This scenario involved a cascading economic catastrophe. If South32's Dendrobium mine closed - this would force the closure of it's Appin mine, which would force the Port Kembla Coal Terminal to shut, and render Port Kembla Steel Works unviable. $10.7bil would be lost to the economy per year, along with around 25,000 jobs.
What did the IPC have to say?
The IPC did not agree with the characterisation of the importance of Dendrobium's coal to the region or the local steelworks.
The Commission's said:
although some of Dendrobium's coal does go to Port Kembla Steelworks most is destined for export
the water catchment and greenhouse gas emissions are equally important economic considerations
Port Kembla can't be as reliant on the coal from the Wongawilli Seam as has been made out. The Commission pointed to South32's own Project Schedule, which indicated that current operations extracting the Wongawilli Seam will end in 2024. Recommencement of extraction of the Wongawilli Seam will not recommence until 2043, leaving a 19 year non-extraction period. The IPC reasoned "the Applicant's Project Schedule did not correlate with the significance of Wongawilli Seam coal as suggested."
The IPC did not address arguments from submissions that green steel making is on the horizon and will become commercially viable by 2030.
The commission concluded: “The commission finds that the project will have beneficial economic impacts, but these beneficial impacts do not sufficiently outweigh the adverse environmental and other impacts of the Project if approved.”