Citigold Corporation Limited v Chief Executive, Department of Environment and Heritage Protection (No. 5) [2016] QLC 62 (2016) 37 QLCR 277

LAND COURT OF QUEENSLAND CITATION: Citigold Corporation Limited v Chief Executive, Department of Environment and Heritage Protection (No. 5) [2016] QLC 62* PARTIES: Citigold Corporation Limited (appellant) v Chief Executive, Department of Environment and Heritage Protection (respondent) FILE NO/s: EPA055-15 DIVISION: General Division PROCEEDING: Appeal against determination of financial assurance for an Environmental Authority DELIVERED ON: 31 October 2016 DELIVERED AT: Brisbane HEARD ON: 7-16 December 2015; 3-6, 18, 19 February 2016; 10, 11 March 2016; 12-16 September 2016; 24 and 27 October 2016 HEARD AT: Brisbane MEMBER: PA Smith ORDER/S: 1. The Appeal is allowed and the decision of the respondent is set aside. 2. The Financial Assurance is determined in the sum of Five Million, Three Hundred and Sixty-Eight Thousand, Eight Hundred and One Dollars ($5,368,801). 3. The form of the Financial Assurance is a Bank Guarantee from an approved financial institution. CATCHWORDS: APPEAL – GENERAL PRINCIPLES – appeal de novo of administrative decision * Pursuant to r 21 of the Land Court Rules 2000, this is a corrected decision issued on 4 November 2016, and replaces the original decision issued on 31 October 2016. -- 1 of 118 -- COURTS – JURISDICTION AND POWERS – where Court standing in place of administrative decision-maker ENERGY AND RESOURCES – MINERALS – COURT EXERCISING JURISDICTION IN MINING MATTERS – calculation of Financial Assurance payable ENVIRONMENT – rehabilitation – determination of Financial Assurance payable by Mining Company in light of Plan of Operations EVIDENCE – GENERAL PRINCIPLES – expert evidence – where conflict in expert evidence – where evidence of the nature of expert evidence given by witness not called as an expert – where witness had expert credentials MONEY – Financial Assurance – determination of – factors to be considered MONEY – Financial Assurance – form of payment MONEY – Financial Assurance – whether contingency payable Acts Interpretation Act 1901, s 14A Environmental Protection Act 1994, s 287, s 288, s 289, s 292, s 295, s 521, s 524, s 527, s 528, s 530, s 548 Environmental Protection Regulation 2008, s 17B Financial Assurance under the Environmental Protection Act 1994 – Guideline Mineral Resources Act 1989 Alliance to Save Hinchinbrook Inc v Cook (2006) QSC 84 Citigold Corporation Limited v Chief Executive, Department of Environment and Heritage Protection (No. 3) [2016] QLC 21 Cuthbert v Moreton Bay Regional Council (2015) QPEC 36 Cuthbert v Moreton Bay Regional Council (2015) QPEC 63 Garbler v Redland Shire Council (2001) QPEC 028 Gladstone Ports Corporation v Queensland Heritage Council (2012) QPEC 9 Oakley v The Chief Executive Administering The Coastal Protection & Management Act 1995 (2014) QPEC 58 Origin Energy Electricity Ltd v Queensland Competition Authority (2014) 1 Qd R 216 Minister for Immigration and Citizenship v Khadgi (2010) 190 FCR 248 R v Hunt; Ex Parte Sean Investments Pty Ltd (1979) 180 CLR 322 Sanpine v Koompahtoo Local Aboriginal Land Council (2005) NSWSC 365 2 -- 2 of 118 -- Trevisan v FCT (1991) 101 ALR 26 APPEARANCES: Ms McIntyre of counsel for the appellant Mr Dillon of counsel for the respondent SOLICITORS: Holding Redlich for the appellant Litigation Unit, Department of Environment and Heritage Protection for the respondent 3 -- 3 of 118 -- Contents Opening ...................................................................................................................................... 5 Overview .................................................................................................................................... 5 Summary of Citigold’s Position ................................................................................................. 7 Summary of Respondent’s Position.......................................................................................... 10 Chronology ............................................................................................................................... 12 The Hearing .............................................................................................................................. 15 Urgency .................................................................................................................................... 16 The Relevant Legislation .......................................................................................................... 18 Onus of Proof ........................................................................................................................... 33 Analysis of Witnesses............................................................................................................... 38 Ms Reupena............................................................................................................................. 38 Mr Lynch................................................................................................................................. 39 Mr Towsey .............................................................................................................................. 46 Ms Minnesma.......................................................................................................................... 56 The Expert Evidence ................................................................................................................ 62 Mr Thompson.......................................................................................................................... 62 Mr Anderson ........................................................................................................................... 69 Areas of Agreement of the Experts ......................................................................................... 72 JER 2 Report Agreement Areas .............................................................................................. 73 Matters of Agreement during Concurrent Evidence................................................................ 74 Submissions Regarding the Expert Evidence .......................................................................... 76 Key Issue – Inclusion or Exclusion of Infrastructure................................................................ 78 Blackjack USL ........................................................................................................................ 86 Precautionary Principle............................................................................................................. 93 Citigold’s Submissions............................................................................................................ 93 Respondent’s Submissions ...................................................................................................... 94 Assessment of applicability of Precautionary Principle .......................................................... 94 Calculating the Financial Assurance Payable by Citigold ........................................................ 96 TSF High Risk or Low Risk .................................................................................................... 96 WRD High Risk or Low Risk ................................................................................................. 96 Contingency ............................................................................................................................ 97 Financial Assurance Calculations Using Exhibit 68 ............................................................... 99 Determination ......................................................................................................................... 105 ORDERS: .............................................................................................................................. 106 Appendix A – Glossary …………………………………………………………………….. 107 4 -- 4 of 118 -- Opening [1] Throughout this decision, various technical terms will be referred to. These terms all feature in the evidence and/or the submissions of the parties. To save duplication and confusion, this decision will follow a glossary. The terms or abbreviations used in the glossary will be used in the body of this decision, generally without further explanation, as that term is already defined in the glossary. For instance, reference to TSF in this decision is a reference to the Tailings Storage Facility which is defined in the glossary and referred to in Exhibit 54. [2] The glossary is set out in Attachment A to this decision. The glossary is formally incorporated into this decision and forms part of the reasons. Overview [3] This Appeal concerns the amount of financial assurance to be paid by the appellant Citigold Corporation Limited (ACN 060 397 177) (Citigold) in satisfaction of a condition of its environmental authority. [4] Citigold: (a) owns and operates the Charters Towers Gold Project, an open cut and underground gold mining operation at Charters Towers, Queensland (the Project); (b) is the holder of Environmental Authority (EA) (MIM800084602) and (MIN102516311) (together known as EPML00556713) [Exhibit 6 (Doc. CAT- 05)] in respect of the Mining Leases1 for the Project; and (c) as a condition of its EA, is required to provide a financial assurance in the amount and form required by the administering authority prior to the commencement of activities under its EA. [5] The appellant prepared a plan of operations for the period October 2014 to October 2016 and gave the plan of operations to the respondent on or about 31 October or early November 2014.2 [6] The appellant’s 2014-2016 plan of operations calculated and stated a proposed financial assurance amount of $587,000.3 [7] The respondent was required to decide the amount and form of the financial assurance following receipt of the plan of operations: s 295 of the EP Act. 1 The ML’s covered by the EA as described in the Plan of Operations are: Central ML’s 1347, 1385, 1398, 1472, 1488, 1491, 1499, 1545, 10005, 10093, 10193, 10196, 10208, 10281 and 10283; Black Jack ML’s 1387, 1407, 1408, 1409, 1424, 1428, 1429, 1430, 1431, 1432, 1433, 1548, 1585, 1735, 10032, 10042, 10282, 10284, and 10285; Imperial ML’s 1348, 1490, 1521 and 10222. [Exhibit 6 (Doc. CAT-05)]. 2 At [31]; Exhibit 9, at [18]. 3 At [2] and Exhibit CAT-5, p 229ff; Exhibit 9, at [26]-[27]. 5 -- 5 of 118 -- [8] On 27 November 2014 the respondent determined that a financial assurance in the amount of $12,509,000 was required.4 [9] Citigold filed an Appeal on 23 February 20155 against the Respondent’s administrative review decision to confirm the amount of financial assurance required to be paid by Citigold under the Original Decision. An Amended Notice of Appeal was filed on 19 May 2015.6 [10] This matter was been referred to the Land Court pursuant to s 524 of the Environmental Protection Act 1994 (the EP Act). [11] The Appeal has proceeded by way of hearing de novo.7 [12] The Court, in making its decision, has the same power as the administering authority8 and it may: (a) confirm the decision; (b) set aside the decision and substitute another decision; or (c) set aside the decision and return the matter to the administering authority who made the decision, with directions the Court considers appropriate.9 [13] In deciding the Appeal, the Court is not bound by the Original Decision or Review Decision and must: (a) assess the proposed amount of financial assurance contained in Citigold’s Plan of Operations;10 and (b) decide the amount and form of financial assurance in accordance with s 295 of the EP Act. [14] In this respect, the Court: (a) must have regard to: (i) any relevant regulatory requirements; and (ii) any criteria stated in a guideline made by the chief executive and prescribed under a regulation.11 (b) can not require financial assurance of an amount more than the amount that, in it’s opinion, represents the total of likely costs and expenses that may be incurred taking action to rehabilitate or restore and protect the environment because of environmental harm that may be caused by the activity.12 4 Exhibit 9, at [29]. 5 Exhibit 1, p 1. 6 Exhibit 2. 7 See below for further submissions regarding this point. 8 Section 528 of the EP Act. 9 Section 530 of the EP Act. 10 Exhibit 6. 11 Section 295(3) of the EP Act. 12 Section 295(4) of the EP Act. 6 -- 6 of 118 -- [15] A map which clearly indicates the location of the various mining leases which make up the Citigold project was prepared by an expert witness, Mr Anderson. It is Figure 1 of Exhibit 11 and is as follows: Summary of Citigold’s Position [16] Citigold has summarised its submissions as follows:13 13 Citigold’s submissions, paras [11]-[14]. 7 -- 7 of 118 -- “11. For the reasons outlined in these submissions, Citigold submits that: (a) in making a decision about financial assurance, the Court can be satisfied that the: (i) PoO complies with the requirements of section 288 of the EP Act; (ii) rehabilitation program contained in the PoO complies with the conditions of the EA; (iii) Citigold can, and has, entered into agreements with the underlying landowners regarding the retention of infrastructure on the tenements subject of the EA; (iv) the rehabilitation program contained in the PoO is appropriate given the: (A) nature (B) staging and areas of proposed rehabilitation works; (C) the proposed rehabilitation techniques; and (D) the rehabilitation land form criteria in the EA. (v) the FA is appropriate in light of the proposed rehabilitation program contained in the PoO; (vi) alternatively, the rehabilitation program proposed by the expert for Citigold and outlined below is appropriate given the: (A) nature (B) staging and areas of proposed rehabilitation works; (C) the proposed rehabilitation techniques; and (D) the rehabilitation land form criteria in the EA. and, the FA should be assessed in accordance this. (vii) in the alternative to the FA stated in the PoO, the amount of financial assurance proposed by Mr Thompson in the joint report and identified as WPT1 is appropriate to satisfy the legislative purpose of providing for financial assurance; and (viii) Alternatively, in the event that the Court does not accept the landowner agreement and infrastructure statement, that certain infrastructure has a residual beneficial use which does not interfere with the conditions of the EA and accordingly should remain in situ, with financial assurance reduced proportionately. (b) in making a decision about financial assurance, the Court can not: (i) impose its own rehabilitation program; (ii) have regard to the principles regarding an environmental management decision; and (iii) have regard to the precautionary principle. MATTERS FOR THE COURT TO DECIDE 12. The substantive issue for the Court to determine is the amount and form of financial assurance to be paid by Citigold in compliance with its EA. In this respect, consideration of the following is also required: 8 -- 8 of 118 -- (a) which version of the Guideline: Financial assurance under the Environmental Protection Act 1994 [Exhibits 26 and 69] applies, and how it is to be followed; (b) whether the calculator must be followed and if so, to what extent; (c) whether or not there are any other ‘relevant regulatory requirements’ (s295(3)(a) EP Act); (d) whether or not a rehabilitation plan can be imposed on an environmental authority holder; (e) what rehabilitation assumptions can be relied on when calculating FA: (f) whether or not the infrastructure agreements satisfy the requirements of the Environmental Authority and/or the Guideline; (g) whether or not the rehabilitation program included in Citigold’s PoO is appropriate considering the: (i) nature, (ii) staging and areas of proposed rehabilitation works, (iii) the proposed rehabilitation techniques and (h) the rehabilitation landform criteria in its Environmental Authority.; and (i) whether or not the proposed FA corresponds with the rehabilitation program. 13. In answering the question of whether the rehabilitation program is adequate and appropriate, the Court ought consider inter alia: (a) Whether the material contained in the Tailings Storage Facility and the waste rock stock piles ought be classified as ‘high risk’ or ‘low risk’ material; and (b) Whether, in the absence of the Infrastructure Agreements, improved rural outcomes are consistent with the conditions of the environmental authority and certain infrastructure should be retained for such purpose. 14. Citigold’s position is inter alia that: (a) absent the infrastructure agreements, some built infrastructure if left at the relevant sites will add value to subsequent rural land use and should be retained in situ; (b) post mining, the Tailings Storage Facility (TSF) structure needs to be converted so that it is no longer a referrable high risk dam structure and that it sheds water and is strongly vegetated; (c) assessments of material taken at site, pursuant to National Environmental Protection (Assessment of Site Contamination) Measures (NEPM) 2013, show that the TSF material to be covered represent neither a significant Health Limit risk nor a more general Environmental Limit risk that would necessitate even a preliminary stage (Tier 1) investigation for contaminated land; (d) the Citigold approach to rehabilitation does consider engineering issues to the extent necessary to satisfy the EA; (e) sufficient testing and reporting of waste rock has been undertaken to determine background geology; (f) the TSF material is not ‘high risk’; and 9 -- 9 of 118 -- (g) the waste rock material is not ‘high risk’ and that there is no evidence of acid drainage effects at the base of the waste rock dumps nor on plant growth.” (footnotes omitted) Summary of Respondent’s Position [17] The respondent has summarised its position as follows:14 “(1) The appeal is by way of rehearing, in the nature of a hearing de novo. (2) The statutory intention is that the Appellant bears the legal or practical onus of persuading the Court that its financial assurance calculations should be imposed, in circumstances where: (a) The EP Act places responsibility upon the applicant to provide a rehabilitation program and costings for that program, in the form of financial assurance calculations. (b) It is the decision of the Respondent and not the Appellant which determines the amount and form of the financial assurance required for a plan of operations. (c) Once made, the Respondent’s decision is operative and binds the Appellant unless and until it is substituted or set aside following an internal review or appeal. The orthodox legal convention that a party seeking to set aside a decision must prove its case applies. (3) Alternatively, neither party bears the legal or practical onus. (4) The legislative regime is as follows: (a) Section 295 provides that the Court “must have regard to” the prescribed guideline and any regulatory requirements. (b) The statutory intention is not that the guideline is strictly binding upon the Court. It is a matter which must be taken into consideration. However, in all the circumstances, it should be given significant weight. (c) In circumstances where the hearing is a hearing de novo, version 3 of the guideline is the version to which the Court must have regard. (d) Alternatively and in any event, section 295 does not prevent the Court from having regard to all relevant matters in making its decision, including version 2 and version 3 of the guideline. (e) Other matters which the Court may have regard to as being relevant to the calculation of financial assurances include the regulatory requirements concerning environmental management decisions contained in the Environmental Protection Regulation 2008 (“the EP Regulation”), and the “precautionary principle”. However, the Court’s decision need not turn on consideration of either of those matters. 14 Respondent’s submissions, para [3]. 10 -- 10 of 118 -- (5) In determining whether costs and expenses are “likely” to occur, the word “likely” should be interpreted as meaning a “real chance or possibility”, rather than “more probable or not”. (6) The key issues in the appeal are: (a) First, what infrastructure should be included or excluded from the calculations? (b) Second, what rehabilitation requirements or assumptions should be relied upon to calculate the costs? (7) In terms of the first issue: (a) The waste rock dumps and tailing storage facility (“TSF”) are not infrastructure. They are not properly the subject of landowner agreements or statements. They should be included in the financial assurance calculations. (b) The infrastructure on unallocated State land is not properly the subject of landowner agreements or statements. The infrastructure should be included in the financial assurance calculations. (c) Neither the Respondent nor the Court are precluded from scrutinizing the landowner statements and agreements, and determining whether it is appropriate to give effect to them. (d) In all of the circumstances, it is not appropriate that the infrastructure which is the subject of the landowner agreements and statements be excluded from the financial assurance calculations. (e) Further, and alternatively, the landowner agreements and statements are inconsistent with the conditions of the Appellant’s environmental authority, including and in particular condition F1-1. (8) In terms of the second issue: (a) In light of Mr Towsey’s qualifications and expertise, his interests in Citigold and his duties to the company, and the opinions of Mr Thompson and Mr Anderson, the Court should give Mr Towsey’s evidence about his own rehabilitation designs and assumptions, and the resulting financial calculations, no or alternatively very little weight. (b) The Appellant has not established that Mr Thompson has sufficient qualifications and expertise to give expert evidence concerning mining or metalliferous mining rehabilitation generally, or alternatively that he is qualified to give expert evidence about the risks and rehabilitation requirements concerning the waste rock dumps and TSF. (c) If the Court determines that Mr Thompson is capable of giving expert evidence, it should be given little or no weight, and the evidence of Mr Anderson should be preferred. 11 -- 11 of 118 -- (d) The Court should rely upon the rehabilitation requirements and assumptions adopted by Mr Anderson, and the financial assurance calculations he has prepared. (e) The financial assurance should be calculated on the basis that rehabilitation of the TSF involves high risk material. Alternatively, the calculation should be made on the basis that the rehabilitation involves low risk material. (f) The financial assurance should be calculated on the basis that rehabilitation of the waste rock dumps involves high risk material. Alternatively, the calculation should be made on the basis that the rehabilitation involves low risk material. (g) A contingency amount should be included in the financial assurance calculation.” Chronology [18] The parties have further assisted the Court by providing an agreed chronology as follows: CHRONOLOGY Date Event Source December 1996 The Tailings Storage Facility is constructed at the Blackjack site Exhibit 29 July 2003 Citigold prepares an Environment Management Overview Strategy for the Charters Towers Gold Project (Central) Blackjack Project and Warrior (Imperial) Project sites Exhibit 40 02.12.03 Citigold is granted an amended environmental authority for its mining activities at Charters Towers Exhibit 51 24.10.05 Citigold is granted an amended environmental authority for a non-code compliant level 1 mining project for its mining activities at Charters Towers Exhibit 47 at [9] 06.08.10 The Department issues Citigold with a notice to conduct or commission an environmental evaluation. Exhibit 31 page 8. 2011 Cheryl Low prepares an environmental report for Citigold in response to the Department’s notice to conduct or commission an environmental evaluation Exhibit 23 11.11.11 The Department issues Citigold with a notice to conduct or commission a further environmental evaluation Exhibit 31 2012 The Department commences an operational review which includes a review of the Department’s financial and following assurance guideline Exhibit 10 at [11] 09.04.13 Citigold lodges a replacement plan of operations (April 2013 – April 2015) with the Department Affidavit of Samuel Hedge affirmed 13 March 2015 at [8(f)] 01.05.13 The Department decides that the amount of financial assurance required for Citigold’s mining activity is $8,591,703.68 Affidavit of Samuel Hedge affirmed 13 12 -- 12 of 118 -- March 2015 at [8(g)] 10.05.13 Citigold applies for an internal review of the Department’s decision 23.05.13 The Department considers Citigold’s application for internal review and decides to reduce the financial assurance required to $8,067,379.71 Exhibit 47 at [16]; Affidavit of Samuel Hedge affirmed 13 March 2015 at [8(h)] 31.05.13 The Department’s guideline Financial assurance under the Environmental Protection Act 1994 (V1) is rescribed under the Environmental Protection Regulation 2008 (Qld) Exhibit 10 at [19] 05.07.13 Citigold appeals to the Land Court against the Department’s review decision, resulting in appeal EPA194-13 Affidavit of Mark Lynch affirmed 9 March 2016 at [4]; Affidavit of Samuel Hedge affirmed 13 March 2015 at [8(i)]; affidavit of Anne-Maree Kate Ireland affirmed 13 Marc 2013 at [5] 07.03.14 The Department’s guideline Financial assurance under the Environmental Protection Act 1994 (V2) is prescribed under the Environmental Protection Regulation 2008 (Qld) Exhibit 10 at [22] April 2014 The Queensland Audit Office report “Environmental Regulation of the resources and waste industries” is tabled in the Legislative Assembly Exhibit 10 at exhibit JSWR01 18.08.14 The personal representatives of the estate of James Joseph Lynch (Estate) apply to the Department of Natural Resources and Mines to purchase the unallocated state land on Lot 72 on Crown Plan SL48027 (USL) Exhibit 5 at [9] 29.08.14 Citigold prepares an environmental evaluation in response to the notice to conduct or commission such an evaluation issued by the Department on 11 November 2011 Exhibit 31 31.10.14 The personal representatives of the estate agree to retain the infrastructure used by Citigold for its mining activities on its land after the mining project ceases Exhibit 5 at [21] 31.10.14 Citigold agrees to retain the infrastructure used for its mining activities on land its subsidiary controls after the mining project ceases Exhibit 5 at [22]; Exhibit 55 at [9] 31.10.14 Citigold lodges a replacement plan of operations (October 2014 – October 2016) [Exhibit 6] with the Department (received by the Department on 6 November 2014) Exhibit 47 at [21] 13 -- 13 of 118 -- 31.10.14 Citigold seeks the consent of the Department to discontinue Land Court Appeal EPA194-13. Affidavit of Anne- Maree Kate Ireland affirmed 13 March 2015 at [16] 27.11.14 The Department decides that the amount of financial assurance required for Citigold’s mining activity is $12,509,000 Exhibit 2 at [22] 1.12.14 Citigold files a Notice of Discontinuance signed by the Department in appeal EPA194-13 on a condition that costs are paid to the Department Affidavit of Anne- Maree Kate Ireland affirmed 13 March 2015 at 17 04.12.14 The Department sends a letter stating that the replacement plan of operations has been assessed and meets the content requirements under s 288 of the Environmental Protection Act 1994 (Qld), and that EHP has not approved Citigold’s proposed rehabilitation strategy. Exhibit 47 at [25] Exhibit 9 at [20]. 10.12.14 Citigold applies for an internal review of the Department’s decision Exhibit 2 at [24] 22.01.15 The Department considers Citigold’s application for internal review and decides to confirm the financial assurance required is $12,509,000 Exhibit 2 at [27] 23.02.15 Citigold appeals to the Land Court against the Department’s review decision Affidavit of Samuel Hedge affirmed 13 March 2015 at [8(p)] 05.03.15 Citigold applies for a stay of the Department’s decision pending the outcome of the appeal Affidavit of Matthew Martin sworn 13 March 2015 at [2] 13.03.15 The Land Court orders that the Department’s decision be stayed until 31 December 2015 on condition that Citigold pays additional financial assurance in the form of cash or bank guarantee in the sum of $507,696 27.03.15 The Department writes to Citigold requesting further information in relation to the environmental evaluation it submitted on 29 August 2014 Exhibit 41 14.04.15 The Estate receives a letter from DNRM enclosing an agreement to offer a deed of grant over the USL Exhibit 5 at [10] 15.04.15 The Department provides Citigold copies of its assessment report and financial assurance calculations Exhibit 32 at [22] 22.04.15 The Department provides Citigold with the reasons for its review decision Exhibit 32 at [22] 11.05.15 The persona representatives of the estate advise DNRM that the conditions of the agreement to offer are acceptable but an extension of time is Exhibit 5 at [13] 14 -- 14 of 118 -- required to complete negotiations with the relevant native title holders regarding an ILUA 12.05.15 Citigold writes to the Department in relation to its request for further information about its environmental evaluation Exhibit 43 13.05.15 DNRM confirms the personal representatives of the estate have an extension of time to negotiate and registeran ILUA with the native title holders Exhibit 5 at [15] 27.09.15 Peter Anthony Lynch registers the business name “Queensland Gravel” Exhibit 42 18.11.15 The Charters Towers Regional Council advises the Estate that it supports, in principle, the proposal to expand the existing gravel business on the site Exhibit 32 at [14] – [15] 18.11.15 The Charters Towers Regional Council advises Citigold that it supports, in principle, the development of an underground mine tour experience as a post-mining land use Exhibit 32 at [16] – [17] 25.11.15 DNRM grants the personal representatives of the estate an extension of time to negotiate and register an ILUA with the native title holders Exhibit 32 at [8] 16.12.15 The Land Court orders that the Department’s decision be stayed until 29 February 2016 28.01.16 Citigold enters into an amended infrastructure agreement with the personal representatives of the estate about the retention of infrastructure after the mining project ceases Exhibit 32 at [10] 18.02.16 The Land Court orders that the Department’s decision be stayed until 11 March 2016 04.03.16 The Department’s guideline Financial assurance under the Environmental Protection Act 1994 (V3) is prescribed under the Environmental Protection Regulation 2008 (Qld) Affidavit of Thomas Ambrose affirmed 9 March 2016 at [6] 06.03.16 Citigold enters into infrastructure agreement with Charters Towers Gold Pty Ltd about the retention of infrastructure after the mining project ceases Exhibit 55 at [13] 10.03.16 The Land Court orders that the Department’s decision be stayed until the delivery of the decision on Citigold’s application dated 1 March 2016 The Hearing [19] The hearing began in Brisbane on 7 December 2015 and was scheduled for a week, including two days of inspection on site in Charters Towers on 8 and 9 December 2015. The inspections were held as planned, but unfortunately the parties’ estimates of time required for the hearing were well under what was actually needed. The hearing continued in Brisbane from 10-16 December 2015, and again resumed in Brisbane on 3 February 2016 and continued on 4, 5, 6, 18 and 19 February. [20] It appeared that evidence in the matter had concluded on 19 February and a timetable was set for written and oral submissions. However, on 4 March 2016 Financial Assurance 15 -- 15 of 118 -- Guideline 315 was gazetted. This resulted in an application by Citigold to reopen the hearing. The application was granted. The facts and circumstances surrounding the reopening, and the reason for granting the reopening, are fully set out in my decision of 10 March 2016.16 [21] Due to very heavy court commitments that I had already set down, it was not possible to resume the hearing until 12 September 2016.17 On 16 September the parties again closed their cases and a timetable was set for the provision of written submissions, with oral submissions subsequently heard on 24 and 27 October. Unfortunately, both parties were considerably late with their written submissions, which has severely impacted on the Court’s ability to deliver a decision urgently by 31 October 2016, as stressed as being necessary by both parties (see heading Urgency below). [22] Citigold was represented throughout the hearing by Ms KJ McIntyre of Counsel, instructed by Holding Redlich Lawyers. The respondent was represented throughout by Mr J.T. Dillon of Counsel, instructed by the Litigation Unit of the respondent. [23] Citigold relied on affidavit and oral lay evidence of Mr M Lynch and Mr Towsey. Citigold also relied on the expert evidence of Mr Thompson. [24] The respondent relied on the lay evidence of Ms Reupena (affidavit and evidence in chief only) and Ms Minnesma, who provided affidavit and oral evidence, and also relied on the expert evidence of Mr Anderson. [25] To the extent that it is necessary, given the available time in light of the stated urgency, I will assess the evidence of each witness later in these reasons. [26] In reaching my decision in this matter, I have considered and taken into account all of the evidence and submissions of the parties. Particularly in light of the stated urgency, this decision sets out the salient points, but not all the evidence and submissions that I have taken into account. Further, as advised to the parties, I have relied extensively on the written submissions of the parties in the preparation of this decision. Urgency [27] As the chronology shows, this is the second Plan of Operations by Citigold which has resulted in an appeal to this Court regarding the question of Financial Assurance payable. Primarily, as I understand it, because of the lodgement of the current Plan of Operations, the first Land Court appeal was discontinued on 1 December 2014. 15 Exhibit 69, also known as ESR/2015/1758. 16 Citigold Corporation Limited v Chief Executive, Department of Environment and Heritage Protection (No. 3) [2016] QLC 21. 17 Unfortunately, the transcript for the resumed hearing reverted back to day 1 etc. To save confusion, transcript from the resumed hearing will be referred to as TR (meaning transcript resumed) followed by day and page reference. 16 -- 16 of 118 -- [28] Citigold lodged its current Plan of Operations18 on 31 October 2014. It expires on 31 October 2016. In short, Citigold is required to lodge a new Plan of Operations to take effect once the existing Plan of Operation expires. A new Plan of Operations will require Citigold to submit what it says should be the amount of Financial Assurance for the new Plan, which will then be considered by the respondent. [29] Potentially, in a relatively short period of time, there may be yet another decision, then another review decision, by the respondent, and appeal by Citigold. If the current matter is not resolved urgently, it would appear a virtual certainty that such potentiality will occur, given the great distance between the parties on their respective views as to the proper determination of Financial Assurance, and the evidence that the project is currently in a care and maintenance phase, leading to the likelihood that a Plan of Operations at least similar to Ex 6 will soon be lodged. [30] The concern has been expressed that the lodgement of a new Plan of Operations and any subsequent appeal may render the lengthy hearing already conducted in effect nugatory. Although I have some doubt that such circumstances would result in a decision in the current matter being of no value; worthless; inoperative; useless; or futile,19 I agree with the parties that the interests of not only justice generally, but the parties in particular, warrant this Court going to rather extraordinary lengths to deliver this decision by 31 October 2016 to overcome any possibility of all the work and costs which have been expended in this matter ultimately proving in vain. [31] Further, I note in particular the provision of s 289(6) of the Environmental Protection Act 1994 (the EP Act) which states as follows: “The original plan ceases to apply if it is replaced.” [32] While it is clear that s 289(6) only applies to circumstances where there is already a Plan of Operations in existence and the period of that Plan has not ended,20 s 287 makes it clear that the Environmental Authority (EA) holder must not carry out an activity under its mining lease/s without giving the respondent a Plan of Operations. It would seem that the intent of the EP Act in this respect is clear: unless the EA holder intends to cancel the mining leases at the end of the term of a Plan of Operations, an EA holder is required to submit a new Plan of Operations prior to the existing plan expiring. Although not subject to any submissions by the parties, the Citigold project even as it is currently in care and 18 Exhibit 6. 19 See definition of Nugatory, New Shorter Oxford English Dictionary, Volume 2, Clarendon Press, Oxford, 1993. 20 Section 289(1) of the EP Act. 17 -- 17 of 118 -- maintenance would likely fall within the definition of mining under the Mineral Resources Act 1989 (MRA) and activity as used in s 287 of the EP Act. [33] My closing comment on urgency is this. Normally, a matter of this complexity and importance would not only warrant additional time for research, reflection and drafting, but time for extensive review once drafted. None of this is possible to anywhere near the extent I would like before 31 October 2016. This decision simply represents the best I could do in the very short time available working long hours day and night. The Relevant Legislation [34] As this is the first decision of the Land Court relating to the quantum of Financial Assurance payable, it is appropriate to set out the legislative requirements. [35] The starting point for this appeal goes back to two core documents; Citigold’s EA and its current Plan of Operations. The importance of the Plan of Operations was shown during the cross-examination of Ms Minnesma:21 “And you would agree that the EA holder has a positive obligation to comply with its plan of operations?---Correct. And a plan of operations is really a vehicle through which the mining company tells the department what it’s doing, when it’s going to do certain activities, how it proposes to comply with its EA – sorry, do you agree with that so far?---Yes, I do. Yes. Okay – how it proposes to rehabilitate after the cessation of mining?---Correct. And how much it thinks it will cost to rehabilitate the land in accordance with conditions of the EA?---Correct.” [36] Section 288 of the EP Act provides as follows: 288 Requirements for plan of operations (1) A plan of operations must— (a) describe the following— (i) each relevant lease for the environmental authority; (ii) the land to which each relevant lease applies; (iii) the land to which the plan applies; and (b) state the period to which the plan applies (the plan period); and (c) include the following— (i) a plan showing where all activities are to be carried out on the land; (ii) an action program for complying with the conditions of the environmental authority; 21 T 9-79 lines 28-38. 18 -- 18 of 118 -- (iii) are habilitation program for land disturbed or proposed to be disturbed under each relevant lease; (iv) another matter prescribed under an environmental protection policy or a regulation; and (d) be accompanied by a compliance statement for the plan; and (e) be accompanied by the fee prescribed under a regulation. (2) A rehabilitation program under subsection (1)(c)(iii) must state a proposed amount of financial assurance for the environmental authority for the plan period. (3) A compliance statement under subsection (1)(d) must— (a) be made by or for the environmental authority holder; and (b) state the extent to which the plan complies with the conditions of the environmental authority; and (c) state whether or not the amount of the financial assurance for the environmental authority has been calculated in accordance with the guideline under section 295(3)(b). (4) The plan period can not be more than 5 years. (5) A plan of operations may relate to 1 or more relevant leases. [37] For the purposes of this appeal, an important consideration is s 288(2). In short, Citigold’s Plan of Operations is required to include a rehabilitation program, and the rehabilitation program must state Citigold’s proposed amount of Financial Assurance for the EA. [38] In this regard, the Plan of Operations has this to say:22 “10.0 FINACIAL ASSURANCE CALCULATION The total financial assurance of the Project is $587,000 (refer to Appendix D). The existing financial assurance lodged with the administering authority is $492,304.” [39] Citigold still contends that the Financial Assurance should be in the sum of $587,000.00.23 In the alterative, Citigold says that the Financial Assurance should be as calculated by Mr Thompson in his WPT 1 as set out in Exhibit 68, including additional concessions made during the hearing.24 [40] To remove any doubt as to the applicability of a Financial Assurance to Citigold’s operations, the current EA provides as follows:25 “Schedule A – General Financial Assurance 22 Exhibit 6, p 94. 23 Citigold’s submissions, para [544]. 24 Citigold’s submissions, para [545]. 25 Exhibit 47 CAT-02, p 2. 19 -- 19 of 118 -- (A1-1) Provide a financial assurance in the amount and form required by the administering authority prior to the commencement of activities proposed under this environmental authority. NOTE: The calculation of financial assurance for condition (A1-1) must be in accordance with Guideline 17 and may include a performance discount. The amount is defined as the maximum total rehabilitation cost for complete rehabilitation of all disturbed areas, which may vary on an annual basis due to progressive rehabilitation. The amount required for the financial assurance must be the highest Total Rehabilitation Cost calculated for any year of the Plan of Operations and calculated using the formula: (Financial Assurance = Highest Total Annual Rehabilitation Cost x Percentage Required) (A1·2) The financial assurance is to remain in force until the administering authority is satisfied that no claim on the assurance is likely. NOTE: Where progressive rehabilitation is completed and acceptable to the administering authority, progressive reductions to the amount of financial assurance will be applicable where rehabilitation has been completed in accordance with the acceptance criteria defined within this environmental authority.” [41] Conditions A1-1 is consistent with s 292 of the EP Act, which provides as follows: 292 Requirement to give financial assurance for environmental authority (1) The administering authority may, by condition of an environmental authority, require the holder of the environmental authority to give the administering authority financial assurance— (a) before the relevant activity is carried out under the environmental authority; and (b) as security for— (i) compliance with the environmental authority; and (ii) costs or expenses, or likely costs or expenses, mentioned in section 298. (2) However, the administering authority may impose a condition requiring a financial assurance to be given only if it is satisfied the condition is justified having regard to— (a) the degree of risk of environmental harm being caused, or that might reasonably be expected to be caused, by the relevant activity; and (b) the likelihood of action being required to rehabilitate or restore and protect the environment because of environmental harm being caused by the activity; and (c) the environmental record of the holder. (3) The administering authority may require a financial assurance to remain in force until it is satisfied no claim is likely to be made on the assurance. [42] The next section of the EP Act relevant to this matter is s 295 which deals with the respondent deciding the amount and form of Financial Assurance. Section 295 provides as follows: 20 -- 20 of 118 -- 295 Deciding amount and form of financial assurance (1) The administering authority must decide the amount and form of financial assurance required under a condition of an environmental authority. (2) The decision must be made within— (a) if an application is made under section 294(2)—10 business days after the application is received; or (b) if the decision relates to an environmental authority for which a plan of operations is required under section 287—15 business days after the plan of operations is received; or (c) the further period agreed between the holder of the environmental authority and the administering authority. (3) In making the decision, the administering authority must have regard to— (a) any relevant regulatory requirements; and (b) any criteria stated in a guideline made by the chief executive and prescribed under a regulation. (4) Despite subsections (1) and (3), the administering authority can not require financial assurance of an amount more than the amount that, in the authority’s opinion, represents the total of likely costs and expenses that may be incurred taking action to rehabilitate or restore and protect the environment because of environmental harm that may be caused by the activity. (5) In this section— costs and expenses includes monitoring and maintenance costs and expenses. [43] Where an E A holder is dissatisfied with a decision about the amount and form of financial assurance required under its authority, it may apply for a review of the decision.26 [44] The review application must be:27 (a) made in the approved form to the Respondent within 10 business days after the day on which the environmental authority holder receives notice of the decision; and (b) supported by enough information to enable the authority to decide the application. [45] Section 521(2) of the EP Act provides that within 10-15 business days (depending on whether a submission is received within the submission period) the respondent must: (a) review the decision it made in respect of the amount and form of financial assurance; 26 Sections 520 (1)(d), 521(1) and Schedule 2 of the EP Act. 27 Section 521(2) of the EP Act. 21 -- 21 of 118 -- (b) consider any submissions properly made by a recipient of the review notice; and (c) make a decision to: (i) confirm or revoke the decision; or (ii) vary the decision in a way that the administering authority considers appropriate. [46] The respondent must give written notice of the decision to the EA holder within 10 business days after making the review decision.28 The notice must include the reasons for the review decision and inform the EA holder of its right of appeal against the decision.29 [47] The provisions relating to review decisions which are subject to Land Court appeals are set out in Subdivision 1, Division 3, Part 3, Chapter 11 of the EP Act. [48] A person dissatisfied with a decision listed in Part 1, Schedule 2 of the EP Act may, pursuant to s 524 of the EP Act, appeal against the decision to the Land Court. [49] Pursuant to s 527 of the EP Act, the appeal is by way of rehearing, unaffected by the review decision. Section 528 then goes on to state that, in deciding the appeal, the Land Court has the same powers as the administering authority, that is, the respondent. [50] It is common ground between Citigold and the respondent that, when ss 527, 528 and 530 are read together, the appeal is by way of hearing de novo. [51] Section 530 of the EP Act provides as follows: 530 Decision for appeals (1) In deciding the appeal, the Land Court may— (a) confirm the decision; or (b) set aside the decision and substitute another decision; or (c) set aside the decision and return the matter to the administering authority who made the decision, with directions the Land Court considers appropriate. (2) In setting aside or substituting the decision, the Land Court has the same powers as the authority unless otherwise expressly stated. (3) However, this part does not apply to a power exercised under subsection (2). (4) If the Land Court substitutes another decision, the substituted decision is taken for this Act, other than this subdivision, to be the authority’s decision. [52] It follows, therefore, that the Land Court on making its decision must refer back to s 295 of the EP Act and, in particular, s 295(3). That is, the Land Court must have regard to any 28 Sections 521(7) of the EP Act. 29 Sections 521(9) of the EP Act. 22 -- 22 of 118 -- relevant regulatory requirements, and any criteria stated in a guideline made by the respondent and prescribed under a regulation. [53] Regulation 17B of the Environmental Protection Regulation 2008 (EP Regulation) provides as follows: Division 2A Amount and form of financial assurance for environmental authorities 17B Guideline prescribed—Act, ss 294 and 295 For sections 294(3)(b)(ii) and 295(3)(b) of the Act, the guideline called ‘Financial Assurance under the Environmental Protection Act 1994’ is prescribed. Editor’s note— The guideline may be accessed on the department’s website at <www.ehp.qld.gov.au>. [54] At the time of lodging the appeal, the guideline applicable was known as Guideline 230 which was prescribed and took effect on 7 March 2014.31 As already set out in this decision, Guideline 332 came into effect on 4 March 2016 and resulted in the reopening of the appeal. [55] Guidelines 2 and 3 set out similar ways of calculating financial assurance. Guideline 3 has this to say:33 “(iii) Calculating financial assurance For small scale mining activities, the EP Regulation prescribes the amount of FA required. Certain other mining activities (mining claims, exploration permits and mineral development licences) are authorised with standard conditions and eligibility criteria under the EP Act. The relevant publications are prescribed under the EP Regulation and outline how the FA is to be calculated. These are: • Code of environmental compliance for exploration and mineral development projects (EM586) • Code of environmental compliance for mining claims and prospecting permits (EM587) For all other activities requiring a decision on the amount and form of financial assurance (regardless of whether they have submitted via a plan of operations or gone via an application process), the approved calculation method is outlined in Appendix A. In summary this method involves: • Step 1: Calculate total (i.e. 100%) rehabilitation liability with respect to significantly disturbed land. The total rehabilitation liability must first be calculated for the EA, for all significantly disturbed land, as per Appendix A. • Step 2: If applicable, apply a discount. In recognition of the low incidence of non- compliance, low risk of default, and good environmental performance/lower risk of environmental harm by some operators, the department has adopted a discount system so that operators may reduce the amount of FA payable, to an amount below 30 Exhibit 26, also known as EM 1010. 31 Exhibit 10, para [22]. 32 Exhibit 69. 33 Ibid, pp 8-9. 23 -- 23 of 118 -- 100% rehabilitation liability for significantly disturbed land. Access to the discount is subject to mandatory pre-requisites and the amount of discount attainable is based on a number of criteria (e.g. sound financial health, measures undertaken to reduce rehabilitation liability/risk of environmental harm etc.). These are listed in Appendix B. • Step 3: Calculate proposed FA. The final FA can be calculated by subtracting the discount amount from the 100% rehabilitation liability amount.” [56] It is to be noted that the Guideline quoted above refers to Appendix A, which makes reference to what has been referred to throughout the hearing as “the calculator”. Appendix A of Guideline 3 relevantly provides as follows: “Appendix A – Approved calculation method The following methodology applies to mining leases, other non-mining resource activities and prescribed environmentally relevant activities (e.g. landfills, quarries). The department has developed a mining and a petroleum and gas FA calculator to help facilitate consistency in calculating FA. The calculators can be downloaded from the Queensland Government Business and Industry Portal at http://www.business.qld.gov.au/business/running/environment/licences- permits/financial-assurance-rehabilitation/financial-assurance-security-deposit. EA holders who calculate their FA using the departmental FA calculator will find that the assessment of their FA application is significantly streamlined. EA holders that do not calculate their FA using the departmental FA calculator can still achieve a streamlined assessment of their FA if they have previously had their calculator recognised by the department. Industry calculators can achieve recognition if they follow the recognition process outlined below in Part 2. All other industry calculations will undergo a complete assessment which may include the department comparing the industry calculation of FA against the departmental calculator values. Regardless of which type of calculator is used, all FA calculations must follow the steps outlined in Part 1 below. Part 1: Criteria for Calculating Financial Assurance Step 1: Calculate 100% rehabilitation liability The total rehabilitation liability reflects the total potential costs to rehabilitate significantly disturbed land, in a way that will ensure compliance with environmental conditions of the EA. The total rehabilitation liability must: • be calculated on a project basis (i.e. may cover several activities on one or more resource authorities) • be calculated for all land that has been or is proposed to be significantly disturbed • be based on the rehabilitation costs for the year in which the maximum liability is incurred within the nominated disturbance period34 • costs must be a site-specific independently certified, third party quote or a contracted rate to undertake the full extent of work necessary to meet all EA conditions including the following activities: 34 The disturbance period provides for a regular review in recognition of the variable nature of disturbance (e.g. due to activities expanding or being progressive rehabilitated) and the subsequent rehabilitation liability. If this period is less than 1 year, FA should be calculated based on the maximum rehabilitation liability within the nominated disturbance period. 24 -- 24 of 118 -- (a) decommission and remove all infrastructure and terminate all services35 (b) constituent tasks or activities required for rehabilitation (c) project management costs36 (10% of the total rehabilitation liability is recommended). 37 (d) maintenance and monitoring.38 It is recommended that 5% of the total rehabilitation liability be added to account for maintenance and monitoring costs. In some circumstances it may be appropriate to determine actual maintenance and monitoring costs rather than applying 5%. An example is where maintenance and monitoring costs are likely to account for more than 5% of the total rehabilitation liability for the site, for instance where rehabilitation on a site has been substantially completed, but not progressively certified,39 (e) if the project produces hazardous contaminants or includes notifiable activities (in relation to contaminated land), the cost of completing a site investigation report to verify that the conditions of the environmental authority have been met The total rehabilitation liability does not: • need to be calculated for disturbance authorised under an EA if FA has already been given under the same or another EA and where there is colocation of infrastructure resulting in no change to the rehabilitation activities or disturbance. • need to include rehabilitated areas certified under section 318Z of the Environmental Protection Act 1994. • include the costs of responding to an incident (e.g. a spill or accidental release to waters that has downstream impacts). The total rehabilitation liability must not: • assume that the liability can be reduced or offset by deducting the value of on-site infrastructure or other assets (including scrap metal). This does not satisfy the requirements for an acceptable form of FA (which must be unconditional; immediately payable on demand and payable without reference to another person and available until all obligations have been performed). The department does not accept this method due to risks and uncertainty associated with the department’s ability to inherit and on-sell these assets and commercial factors (i.e. depreciation and saleability) which could affect the value of the item. 35 Guideline footnote 6. Note: Some costs may not need to be included for certain suitable infrastructure if the EA holder can provide a written agreement (between the EA holder and the land owner) or a statement (if the EA holder is the underlying landowner) that the infrastructure can remain onsite and can demonstrate that the retention of the infrastructure is consistent with achieving the general rehabilitation goals of a site that is safe to humans and wildlife, non-polluting, and stable. Examples of suitable infrastructure include bores, clean water dams and access roads. This does not negate the need to obtain any other authorisations as required under the EP Act or other legislation. 36 Guideline footnote 7. This reflects the costs to government to project manage, schedule or oversee the required works. 37 Guideline footnote 8. The EA holder may nominate an alternative amount for these components (or variable amounts across each itemised activity). If the non-recommend value is used, quotes must then be attached with the application/information supplied to the department. 38 Guideline footnote 9. This reflects the cost to government to do ongoing monitoring and maintenance required of rehabilitation works. 39 Progressive certification is a process outlined under s 318Z of the Environmental Protection Act 1994 and allows the holder of an environmental authority to demonstrate that they have met all rehabilitation obligations. A certified rehabilitated area does not require financial assurance. 25 -- 25 of 118 -- Step 2: If applicable, apply the discount and then calculate proposed FA In recognition of the low incidence of non-compliance, low risk of default, and good environmental performance/lower risk of environmental harm by some operators, the department has adopted a discount system so that operators may reduce the amount of FA payable, to an amount below 100% rehabilitation liability for significantly disturbed land. Access to the discount is subject to mandatory pre- requisites and the amount of discount attainable is based on a number of criteria (e.g. financial stability, measures undertaken to reduce rehabilitation liability/risk of environmental harm etc.). The maximum allowable discount is 30%. The criteria are listed in Appendix B. Step 3: Calculate proposed FA The final FA can be calculated by subtracting the discount amount from the 100% rehabilitation liability amount…” [57] There are relevant differences between Guideline 2 and Guideline 3 as I set out in my decision in Citigold (No. 3). [58] There is little or no remaining dispute between the parties as to the applicability of Guideline 3 and, for that matter, Guideline 2 to the Court’s determination of this matter. [59] The respondent submits that s 295 of the EP Act permits the Court to also have regard to the respondent’s Guideline Resource Activities Rehabilitation Requirements for Mining Resource Activities40 (Rehabilitation Guideline), the EP Regulation, and the Precautionary Principle. [60] Citigold does not agree that the Rehabilitation Guideline, EP Regulation and Precautionary Principle require further consideration. The respondent conceded that this Court’s decision does not turn on further consideration of the EP Regulation or the Precautionary Principle.41 [61] As regards the Rehabilitation Guideline the respondent maintains that it should be taken into account given the facts of this case.42 Citigold strongly submits that the Rehabilitation Guideline is not relevant to this appeal. [62] Citigold submits that the Rehabilitation Guideline: (a) does not constitute a ‘relevant regulatory requirement’ for the purposes of s 295(3)(a) of the EP Act; (b) is not a Prescribed Guideline in accordance with s 295(3)(b) of the EP Act; (c) is only relevant to the calculation of financial assurance where the environmental authority holder is seeking a ‘discount’ under the Prescribed Guideline [Exhibit 26 or 69]; and (d) otherwise is not a guideline to which the Court ought have regard. [63] Citigold accepts that the respondent may make guidelines for the administering authority inter alia about: 40 Exhibit 20, also known as EM 1122. 41 Respondent’s submissions, para [63]. 42 Respondent’s submissions, para [61]. 26 -- 26 of 118 -- (a) how it complies with regulatory requirements (Compliance Guideline);43 and (b) to inform persons about matters it considers appropriate for the administration of the EP Act (Information Guideline).44 [64] Any such guideline must be notified in the gazette 45 and the Department must follow the relevant guideline.46 Not all such guidelines are prescribed under regulation and apply to the assessment of financial assurance. The Rehabilitation Guideline is not prescribed under the EP Regulation in respect of s 295 of the EP Act and decisions on the amount and form of financial assurance. [65] The Rehabilitation Guideline is described as a guideline:47 “provides information on both progressive and final rehabilitation requirements for site specific resource projects operating in Queensland under the Environmental Protection Act 1994.” [66] Section 1.1 states the purpose of the Rehabilitation Guideline as being:48 “This guideline is to assist mining companies to propose acceptable rehabilitation outcomes and strategies during the planning stages of a mine or when changes to the proposed rehabilitation outcomes and strategies become necessary during the operational stages of a mine. The guideline also explains how the administering authority will assess whether progressive or final rehabilitation for either new or established mining projects is satisfactory…” [67] Section 1.4 of the Rehabilitation Guideline provides as follows:49 “1.4 Other relevant guidelines The following guidelines should also be consulted: Triggers for environmental impact statements under the Environmental Protection Act 1994 for mining, petroleum and gas activities (EM1128) Financial assurance under the Environmental Protection Act 1994 (EM1010).” [68] To the extent that the Respondent submits that the Rehabilitation Guideline ought be considered as part of the Prescribed Guideline criteria, namely as being any relevant standards or rehabilitation requirements such as conditions of the EA,50 it is submitted that the Rehabilitation Guideline is only relevant (and should only be consulted) where the environmental authority holder is seeking to reduce the amount of financial assurance payable by applying one of the three discounts contained in Appendix B.51 43 Section 548(1)(a) of the EP Act. 44 Section 549(1)(d) of the EP Act. 45 Sections 548(4) and 549(3) of the EP Act. 46 Section 548 (2) of the EP Act. 47 Exhibit 20, p 1. 48 Ibid p 3. 49 Ibid p 4. 50 Exhibit 26, at p 9 and Exhibit 69, at p 10. 51 Exhibit 26, at p 26 and Exhibit 69, at p 27. 27 -- 27 of 118 -- [69] In this respect, Appendix A, Part 1, Step 2 of the Prescribed Guideline outlines when a discount may be sought. In order to be eligible to claim a discount, the mandatory pre- requisites (table 1) must first be satisfied. Appendix B of the Prescribed Guideline outlines the discount system by which an EA holder can seek a discount on their FA, it provides:52 “2. Discount system for all other activities A discount will apply to the gross FA liability for an EA, where the EA holder can demonstrate that it meets all mandatory pre-requisites (listed in Table 1 below) and the discount criteria (outlined in Tables 2-4 below) which are relevant to the discount they are applying for. … Mandatory Pre-requisites The mandatory pre-requisites outlined in Table 1 are benchmarks that each EA must meet in order to apply for any subsequent discounts. Discounts There are 3 discount categories and an EA holder may choose any discount to apply for, however the maximum discount that can be awarded is 30%. The following explains the purpose of awarding discounts under each category: 1.Financial (Table 2): … 2.Progressive rehabilitation and certification (Table 3): This discount category provides a discount to EA holders that avoid impacting areas of remnant vegetation or where areas of significant disturbance are being proactively rehabilitated or revegetated. 3.Waste management (Table 4): …” [70] Of relevance to the application of the Rehabilitation Guideline is a discount for progressive rehabilitation and certification (table 3) which is divided into four subcategories: (a) a 10% discount for avoiding any impacts to remnant vegetation (Avoidance); (b) a 10% discount for undertaking proactive rehabilitation work to reduce the total area of disturbance (irrespective of the final land use) (Stabilisation); (c) a 10% discount for undertaking proactive revegetation of a wood regional ecosystem (Restoration); and (d) a 10% discount for progressive certification (Certification). [71] The information and criteria contained in table 3 makes it clear that the Rehabilitation Guideline would be relevant in deciding whether or not a discount for progressive rehabilitation and certification can be granted and applied to the decision on the amount 52 Exhibit 69, p 28. 28 -- 28 of 118 -- of FA. [72] Citigold has not sought a discount in accordance with Appendix B of the Prescribed Guideline. Accordingly, it would seem that the Rehabilitation Guideline is irrelevant to deciding the amount of Financial Assurance in the present proceedings. [73] Citigold submits that the Court cannot be satisfied that the Rehabilitation Guideline is a guide to which it must have regard because: (a) Citigold is the holder of the EA; (b) the EA contains rehabilitation objectives and outcomes; (c) the Rehabilitation Guideline does not apply to the preparation of the Plan of Operations; (d) the Rehabilitation Program contained in the Plan of Operations is not a ‘progressive’53 or ‘final’54 rehabilitation report; (e) the Rehabilitation Program contained in the Plan of Operations complies with the EA conditions; (f) the Rehabilitation Guideline is not a guideline prescribed under regulation pursuant to s 295(3)(b) of the EP Act; (g) Citigold has not sought a discount of its financial assurance in accordance with Appendix B of Guideline 2; and (h) Citigold has not sought certification of progressive rehabilitation under s 318Z of the EP Act. [74] Citigold submits in the alternative, that if it is the case that the Rehabilitation Guideline is applicable, then it would only be relevant in circumstances where the administering authority (or, on appeal, the Court) was also required to decide whether or not the rehabilitation program proposed in the Plan of Operations by Citigold was appropriate and, if not, impose its own rehabilitation program on the holder. [75] Citigold submits,55 and as confirmed by Ms Minnesma for the respondent,56 that it is not for the Respondent (or, on appeal, the Court) to impose its own rehabilitation program on an EA holder when making a decision under s 295 of the EP Act. [76] Citigold argues that it follows that where an EA holder has sought to reduce the amount of financial assurance required as a condition of its environmental authority, as in the 53 Chapter 5A, Part 6 of the EP Act. 54 Chapter 5, Part 10 of the EP Act. 55 Submissions at [111]-[122]. 56 T 9-88 line 2. 29 -- 29 of 118 -- present case, the Rehabilitation Guideline i s irrelevant to deciding the amount of financial assurance payable, and that any other interpretation would give the Respondent carte blanche in respect of the matters it can have regard to in making its decision, a result that was clearly not the intention of the legislature. [77] Further in the alternative, Citigold submits that the Rehabilitation Guideline clearly distinguishes between policy objectives for rehabilitation, called rehabilitation goals, and rehabilitation objectives selected by mining companies in their rehabilitation strategies linked to the application stage for an environmental authority and the environmental impact statement (EIS) process.57 [78] Table 1 of the Rehabilitation Guideline outlines possible strategies to achieve rehabilitation goals for various domains.58 [79] Section 8 of the Rehabilitation Guideline identifies how existing mines ought be dealt with. Namely, it refers to rehabilitation having already been completed and being evaluated against the rehabilitation requirements that were in place for the mining project at the time the rehabilitation was completed. This section also refers to mining projects having prepared an EMOS which will have identified at least one rehabilitation objective (typically low intensity grazing).59 [80] Section 2.2 identifies the rehabilitation hierarchy in the following terms: “In assessing the acceptability of rehabilitation objectives, indicators and completion criteria that may be proposed for a mining project, the administering authority will have regard to a hierarchy for mine rehabilitation that is similar to the waste hierarchy. The strategies listed higher in the hierarchy should be adopted in preference to those listed lower, unless there are significant environmental, economic or social issues that override such a selection. The rehabilitation hierarchy, in order of decreasing capacity to prevent or minimise environmental harm, is: 1. avoid disturbance that will require rehabilitation 2. reinstate a “natural” ecosystem as similar as possible to the original ecosystem 3. develop an alternative outcome with a higher economic value than the previous land use 4. reinstate previous land use (e.g. grazing or cropping) 5. develop lower value land use 6. leave the site in an unusable condition or with a potential to generate future pollution or adversely affect environmental values.” [81] In my view Citigold’s proposal to retain the infrastructure the subject of MJL-46 and MJL-59 is consistent with the hierarchy point 3 and indeed, because it is higher in the 57 Exhibit 20, at pp 8-10. 58 Exhibit 20, at p 13. 59 Exhibit 20 at p 22. 30 -- 30 of 118 -- list than reinstatement to previous land use (point 4) it should be preferred. I note that Mr Anderson supports this position.60 [82] Before leaving this analysis of the relevant legislation, regulations and guidelines, reference should also be made to the meaning of the term “must have regard to” in s 295(3) of the EP Act. [83] The respondent submits61 that s 295 provides that the respondent (and on appeal the Court) “must have regard to” relevant regulatory requirements and the Prescribed Guideline (s 295(3)), and that the amount of the financial assurance must not be more than the total of the likely costs and expenses that may be incurred, and further that, while the Court is required to have regard to relevant regulatory requirements and the Prescribed Guideline, the statutory intention is not that the guideline is strictly binding upon the Court. Rather that it is a matter which must be taken into consideration: see Origin Energy Electricity Ltd v Queensland Competition Authority.62 [84] In light of the importance of financial assurances, the otherwise limited statutory guidance provided, and the paucity of other information upon which to base the financial calculations, the Respondent submits that the Court should give significant weight to the guideline and the accompanying financial assurance calculator. [85] The Respondent contends that the emphasis is on the word “regard” as opposed to the phrase “must have regard”. In this respect, the Counsel for the Respondent submitted: “What the respondent must do is make a decision about the amount and form of the financial assurance and that’s set out at section 295 and, in particular, section 295 subsection (1)(b) – sorry, (2)(b).63 … The relevant considerations are, in making the decision regard must be had to relevant regulatory requirements and for the guideline and regard only is the submission of the department.”64 [86] In my view, it is not sufficient for the respondent, or the Court, to merely consider the Prescribed Guideline in a cursory way. Rather the words “must have regard to” contained in s 295(3) of the EP Act represent mandatory language which requires consideration that must involve an active, intellectual process. The phrase has been judicially considered on a number of occasions. [87] In Garbler v Redland Shire Council65 Robin J noted: 60 T 3-34 line 25. 61 Respondent’s submissions, paras [51]-[53]. 62 [2014] 1 Qd R 216, paras [79]-[100]. 63 T 1-14 line 25. 64 T 1-14 line 45. 65 [2001] QPEC 028 at [32]. 31 -- 31 of 118 -- “‘Must have regard to’ represents mandatory language, as compared with weaker expressions such as ‘may have regard to’ or even ‘having regard to’ (considered in Biggs v. City of Mount Gambier (1981) 49 LGRA 177). The expression indicates to my mind that some (but not necessarily decisive) weight must be given to the State planning policy which (perhaps significantly) is honoured as the only policy requiring to be considered, in contrast with other statutory provisions which may list numerous factors, often topping them off with reference to ‘any other relevant circumstance’ (as in s.9(2)(p)) in the Penalties and Sentences Act 1992).” [88] Where a factor is a fundamental matter for consideration, the process of consideration must involve “an active intellectual process” directed at the nominated subject matter.66 Where a decision-maker must consider matters prescribed by law, generally, he or she cannot jettison or ignore some of those factors or give them cursory consideration only in order to put them to one side.67 A mere assertion of consideration will not be conclusive if it is demonstrated that regard has not been had to such matters in any real sense.68 [89] In R v Hunt; Ex Parte Sean Investments Pty Ltd69 the Commonwealth Minister for Health was required to ‘have regard to’ a number of factors under the National Health Act 1953 (Cth) when considering the costs incurred by a nursing home in the provision of its services. Per Mason J and Gibbs J at 323, it was held that the requirement to ‘have regard to’ requires the giving of weight to the specified considerations as a fundamental element in the determination. Mason J at 329 went on to say: “When sub-s (7) directs the Permanent Head to “have regard to” the costs, it requires him to take those costs into account and to give weight to them as a fundamental element in making his determination. There are two reasons for saying that the costs are a fundamental element in the making of the determination. First, they are the only matter explicitly mentioned as a matter to be taken into account. Secondly, the scheme of the provisions is that, once the premises of the proprietor are approved as a nursing home, he is bound by the conditions of approval not to exceed the scale of fees fixed by the Permanent Head in relation to the nursing home. In many cases it is to be expected that the scale of fees will be fixed by ascertaining the costs necessarily incurred and adding to them a profit factor. In the very nature of things, the costs necessarily incurred by the proprietor in providing nursing home care in the nursing home are a fundamental matter for consideration.” [90] In Origin Energy Electricity Ltd & Anor v Queensland Competition Authority & Anor70 judicial consideration of the phrase “weight as a fundamental factor” was undertaken at [90] in the following terms: “Notwithstanding the number of occasions on which the “weight as a fundamental factor” language has been mentioned as applicable in subsequent cases, in my opinion, there is no general principle that a matter required to be taken into account 66 Tickner v Chapman (1995) 57 FCR 451 at 462; Telstra Corporation Ltd v Australian Competition and Consumer Commission (2008) 176 FCR 153 at 181-183. 67 East Australian Pipeline Pty Ltd v Australian Competition and Consumer Commission (2007) 233 CLR 229 at 244 [52]. 68 Turner v Minister for Immigration and Ethnic Affairs (1981) 35 ALR 388 at 392. 69 (1979) 180 CLR 322. 70 [2014] 1 Qd R 216. 32 -- 32 of 118 -- must be given “weight as a fundamental factor”, if that proposition is intended to convey more than that the matter must be regarded. Beyond that, the question of what is required is a matter which depends on the particular provision in its context. Any other general approach trends judicial review into the merits of administrative action, in my view, and is better avoided. The question is what does the section, properly construed, require? Once that question is answered, there is no further “weight as a fundamental factor” principle to be applied.” [91] In Minister for Immigration and Citizenship v Khadgi71 the Full Court, which was in that case concerned with the operation of s 109(1)(c) of the Migration Act 1958 (Cth), said at [60]-[61]: “In some cases it may be apparent that amongst the factors to which a decision- maker is bound to have regard, there is one factor (or perhaps more than one) which is critical or fundamental to the making of the decision in question. This was true of the particular matter referred to by Mason J in R v Toohey; Ex parte Meneling Station Pty Ltd (1982) 158 CLR 327 at 338. As his Honour’s reasons in R v Hunt; Ex parte Sean Investments Pty Ltd (1979) 180 CLR 322 at 329 show, the relevant statutory provisions may make clear that a particular factor is “a fundamental matter for consideration”. But the converse is also true. The relevant statutory provisions may show that a particular matter to which a decision-maker must have regard is not fundamental to the decision-making process in the sense discussed by his Honour: see, for example, Singh v Minister for Immigration and Multicultural Affairs (2001) 109 FCR 152 at [57] (per Sackville J).” [92] It is clear from the authorities that a decision may be invalid where a decision-maker has failed to give consideration to a relevant matter in reaching that decision.72 The statutory duty to ‘have regard to’ a matter requires a decision-maker to take into account that matter and give it weight or consideration as a fundamental element in making the determination.73 It is open to a decision-maker either to reject or accept evidence depending on its persuasiveness, but it may not ignore it altogether if it is a relevant consideration.74 Onus of Proof [93] Citigold submits that the onus of proof in this matter rests with the respondent or alternatively there is no onus of proof. The respondent submits that the onus of proof rests with Citigold or alternatively neither party bears the onus of proof. Appellant’s Submissions [94] Citigold submits that as the respondent determined the amount of financial assurance, the respondent should be the one to justify that amount to the Court. 71 (2010) 190 FCR 248. 72 R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13 at 34. 73 R v Hunt; Ex parte Sean Investments Pty Ltd (1979) 25 ALR 497 at 504. 74 See Barrier Reef Broadcasting Pty Ltd v Australian Broadcasting Tribunal (1992) 27 ALD 730 at 737; Riverina Broadcasters (Holdings) Pty Ltd v Australian Broadcasting Tribunal (1992) 28 ALD 813 at 818 where the tribunal ignored evidence tendered of depreciation charges claimed by a disappointed applicant for a commercial licence when this evidence was relevant to the issue of commercial viability. 33 -- 33 of 118 -- [95] Citigold relies upon three recent Planning and Environment Court decisions.75 In the Oakley decision Rackemann DCJ reviewed an appeal in relation to a Costal Protection Notice issued by the respondent against the appellant under the Coastal Protection and Management Act 1995 (CPMA) requiring the appellant to undertake certain works on her property. [96] His Honour noted that the Court’s function under the CPMA was to rehear the matter unaffected by the chief executive’s decision.76 His Honour stated that:77 “Where a right of appeal is given to a Court from a decision of an administrative authority, a provision that the appeal is to be by way of rehearing generally means that the Court will undertake a hearing de novo, although there is no absolute rule to that effect.” [97] His Honour went on to confirm that he would hear this matter de novo.78 [98] His Honour then turned his attention to where the onus of proof would lie in this judicial hearing of an administrative matter and said:79 “The CPMA does not state which party is to bear the onus. While it is the person who is dissatisfied with the decision to give the notice who brings the appeal, it does not necessarily follow that that person bears the onus. In conducting a de novo hearing, the Court will be concerned with whether a notice ought issue. That notice disturbs the pre-existing status quo, by requiring the recipient to comply with a notice. Failure to do so is punishable by a maximum penalty of 3000 penalty units. Prior to the issue of the notice it was for the chief executive to determine whether such a notice should issue. Such a notice ought not have issued unless the chief executive was satisfied that it was appropriate in the circumstances. Similarly, the Court, on a de novo hearing, ought not dismiss the appeal unless it is so satisfied. In such circumstances the onus properly falls upon the respondent, as the authority contending that it is appropriate that the notice be given. The respondent properly accepts that it bears the onus in such appeals.” [99] The Cuthbert case concerned an appeal to the Planning and Environment Court by Ms Cuthbert pursuant to s 531 EP Act against the imposition of an environmental protection order (EPO). In an interim hearing Searles DCJ determined that the respondent council bore the onus of proof to establish the issue of the EPO was a legitimate exercise of its discretion, effectively following the decision in Oakley.80 [100] At the final hearing Morzone DCJ confirmed that the onus of proof rested with the respondent.81 75 Oakley v The Chief Executive Administering The Coastal Protection & Management Act 1995 (2014) QPEC 58 and Cuthbert v Moreton Bay Regional Council (2015) QPEC 36 and (2015) QPEC 63. 76 Section 163(2) CPMA. 77 Oakley v The Chief Executive Administering The Coastal Protection & Management Act 1995 (2014) QPEC 58 at (page 3 line 5). 78 Ibid at page 5 line 20. 79 Ibid at page 5 lines 25-35. 80 Cuthbert v Moreton Bay Regional Council (2015) QPEC 36 at (31.1). 81 Cuthbert v Moreton Bay Regional Council (2015) QPEC 63 at (17). 34 -- 34 of 118 -- [101] Citigold further submits that in circumstances where no clear reasons were given by the respondent as to how it came to its conclusion, it would be unfair to require Citigold to bear the onus of proving why the amount determined by the respondent is incorrect.82 [102] Alternatively Citigold submits that neither party in this matter should bear an onus of proof due to the principles that apply to the determination of an administrative appeal. [103] Citigold notes that the Land Court is a specialist judicial tribunal and is not bound by the rules of evidence and may inform itself in any way it considers appropriate. [104] Citigold submits that although this matter is referred to as an appeal, it is closer to a review of an administrative decision, where the Court stands in the shoes of the administrative authority in deciding the matter and has all the powers of the authority and its decision is taken to be the authority’s decision. [105] Citigold submits that the Court’s role in this matter is more akin to that of an administrative decision maker than a judicial entity to which a decision is appealed. In this regard Citigold cited two commonwealth authorities in support of its submission that administrative tribunals are not required to act in accordance with onus of proof principles.83 [106] Finally Citigold submits that to the extent any onus is placed on it, it should only be to provide sufficient documentation to support the financial assurance calculation it has proposed as part of its rehabilitation plan (as contained in its Plan of Operations).84 Respondent’s Submissions [107] The respondent submits that Citigold has applied for an environmental authority (EA) so it can lawfully carry out its mining activities. As part of this process, Citigold was required to provide a rehabilitation plan and its estimate of what the financial assurance should be. To obtain the benefit of the environmental authority, Citigold must comply with the EA conditions including paying the financial assurance amount calculated by the respondent. [108] Once the respondent determines an amount of financial assurance then it becomes due and payable, even if a party such as Citigold applies for an internal review or subsequently a review by the Court. The financial assurance can thought to be stayed by the Court pending an internal review or an appeal to the Court. [109] The respondent submits that the statutory intention of the EP Act is for Citigold to persuade the Court that its financial assurance calculation should be imposed, if it disputes the decision of the respondent. The respondent believes this is consistent with the legislative 82 Applicant’s submissions at (69). 83 Minister for Immigration and Ethnic Affairs v Liang (1996) 185 CLR 259 and McDonald v Director- General of Social Security (1984) 1 FCR 354. 84 Applicant’s submissions at (78). 35 -- 35 of 118 -- intent of the EP Act and the orthodox legal convention that a party seeking to set aside a decision must prove its case.85 [110] The respondent has provided several cases to support its contention that Citigold who is bringing the appeal, should bear the onus of proof.86 I particularly note the Gladstone Ports Corporation decision where Jones DCJ determined that the appellant not the Queensland Heritage Council, should bear the onus of proof in the Corporation’s appeal against the Council’s decision to include the appellant’s property in the Queensland Heritage Register. [111] Alternatively the respondent submits that neither party should bear the onus of proof. Assessment [112] A starting point for any onus of proof consideration is the standard axiom that the party who brings the action must bear the onus of proof. The initiator of the action must prove its case to the Court’s satisfaction.87 [113] However this rule does not always apply, for example it can be altered expressly or impliedly by statute.88 [114] Also the facts of the case could be such that the standard onus of proof is reversed. For example Sanpine v Koompahtoo Local Aboriginal Land Council89 was an action for wrongful termination of a joint venture. The defendant claimed that the joint venture was lawfully ended because of breaches by the plaintiff. The plaintiff denied that allegation. It was held that the defendant must prove the plaintiff’s default. It was not the plaintiff’s task to prove that he was not in breach.90 [115] In this case the relevant legislation is silent as to which party should bear the onus of proof. The Court must then look to the facts of the case. [116] This is a matter where Citigold has been granted an EA so it can legally undertake its mining activities in Charters Towers. As part of the process Citigold submitted a Plan of Operations. The Plan of Operations contained a rehabilitation plan and an estimate of what Citigold believed were the necessary costs of putting its rehabilitation plan into effect. [117] The respondent then assessed the rehabilitation plan and calculated the financial assurance amount it believed should be paid by Citigold. [118] The Court in determining the appropriate amount of financial assurance, must have regard to the rehabilitation plan proposed by Citigold and its accompanying financial assurance 85 Respondent’s submissions at (37-38). 86 Gladstone Ports Corporation v Queensland Heritage Council (2012) QPEC 9, Traut v Faustmann Bros Pty Ltd (1983) 48 ALR 313 and Attorney General v Lawrence (2010) 1 Qd R 505. 87 Evidence in Queensland –JRS Forbes at A.102 and Attorney General v Lawrence [2010] Qd R 505 at [30]. 88 Gladstone Ports Corporation v Queensland Heritage Council [2012] QPEC 9 at [15]. 89 [2005] NSWSC 365. 90 Evidence in Queensland – JRS Forbes, at pp 62-63. 36 -- 36 of 118 -- estimation,91 as well as the respondent’s assessment of that rehabilitation plan and its calculation of financial assurance. [119] In effect the onus is on Citigold to prove its rehabilitation plan and resulting financial assurance calculations are sufficient; and for the respondent to prove its concerns with respect to Citigold’s rehabilitation plan and resulting financial assurance estimation and also prove its own financial assurance calculation is correct. In my view both parties bear the onus of proving what they assert with respect to the rehabilitation plan and resulting financial assurance calculations. [120] The decision in Gladstone Ports Corporation can be distinguished as it dealt with a very different fact situation and different enabling legislation. In this matter, unlike the Gladstone Ports Corporation case, each party should bear the onus of proving the financial assurance figure they have contended for. [121] The decisions of Oakley and Cuthbert can be distinguished as in both cases it was the respondent who was taking action against the appellant disturbing the status quo, while in this case the decision appealed against is just part of the process of Citigold submitting a Plan of Operations. [122] Citigold has submitted it would be unfair for it to bear the onus of proof where there are no clear reasons how the respondent came to its financial assurance decision. By splitting the onus of proof I have resolved this issue as Citigold only has the onus of proving its own financial assurance calculations, and in any event there has well and truly been sufficient evidence provided at the hearing of this matter, for Citigold to know how the respondent calculated its financial assurance figure. [123] Citigold has also submitted that this Court in conducting a hearing de novo with respect to the respondent’s financial assurance decision, is engaging in an administrative rather than a judicial process and hence no onus of proof is applicable. With respect to Citigold, I do not agree with this submission. [124] The Land Court is a judicial tribunal.92 The Land Court is a court of record.93 The Land Court is also afforded all of the powers of the Supreme Court.94 The Land Court may subpoena witnesses95 and punish for contempt.96 A member of the Land Court has the same privileges, protection and immunity as a Supreme Court judge,97 and those same privileges, 91 See Financial Assurance under the Environmental Protection Act Guideline v 3, at p 27. 92 Section 4(1) of the LCA. 93 Section 4(2) of the LCA. 94 Section 7A of the LCA. 95 Section 8 of the LCA. 96 Section 9 of the LCA. 97 Section 35(1) of the LCA. 37 -- 37 of 118 -- protection and immunity also apply when the Land Court is performing an administrative function.98 [125] The Land Court conducts its hearings in open court and must take evidence on oath, affirmation, affidavit or declaration.99 Parties have a right to be represented100 and reasoned decisions are given. [126] The Land Court may exercise administrative functions from time to time101 but in terms of hearing this appeal pursuant to s 524 EPA, the Land Court is exercising its judicial functions albeit to review an administrative decision – in a similar vein to the Planning and Environment Court in the matters of Oakley and Cuthbert. [127] Observations concerning the inapplicability of adversarial proceeding concepts such as onus of proof in administrative proceedings,102 do not apply to this judicial determination of an administrative matter in the Land Court. Which Guideline applies? [128] I note both parties agree that the law in force at the time of making this decision is applicable to this matter,103 therefore I must have regard to Guideline 3 which was issued after the first hearing had concluded but prior to the reopening of this matter. Analysis of Witnesses [129] As already indicated, one witness provided affidavit evidence and short oral evidence but was not required for cross-examination. I will deal with her evidence first. Ms Reupena [130] Ms Reupena is employed by the respondent as a Manager in Resource Sector Regulation and Support in the Environmental Services and Regulation Division of the respondent. Her affidavit was affirmed on 22 October 2015 and is Exhibit 10. [131] Ms Reupena’s affidavit covers five main topics: (a) statutory provisions relating to financial assurance, (b) the preparation of Guidelines 1 and 2; (c) consultation with the industry regarding Guidelines 1 and 2; (d) the respondent’s financial assurance calculator and method of calculating financial assurance; (e) general issues regarding purpose of financial assurance and the 98 Section 35(3) of the LCA. 99 Section 11 of the LCA. 100 Section 24 of the LCA. 101 See the list of matters in s 97 LCA. 102 McDonald v Director-General of Social Security (1984) 1 FCR 354 at pp 356-357. 103 See applicant’s Submission at (165) and respondent’s Submission at (8) and for judicial authority see Gallo v Chief Executive, Department of Environment and Resource Management [2013] QLAC 6 at [78]. 38 -- 38 of 118 -- difficulties experienced by the respondent and State of Queensland in this respect. [132] Although Ms Reupena’s evidence is unchallenged, there are still differences between the parties as to how her evidence is to be used. [133] Ms McIntyre for Citigold argues that Ms Reupena’s evidence relates specifically to Guideline 2 and cannot and should not be referred to or used other than in respect of the financial assurance calculator, which has not changed in the second tranche of the proceedings. [134] Mr Dillon for the respondent contends that Ms Reupena’s affidavit deals with the origins of the current financial assurance guideline (Guideline 3) and its associated financial assurance calculator, and that the origins of the present guideline and financial assurance calculator provide important context and are generally relevant to this proceeding, whichever version of the guideline applies. [135] I agree with Mr Dillon. Although her affidavit predates Guideline 3, her evidence shows a clear pathway to the establishment of Guidelines 1 & 2, and by logical extension, Guideline 3, as well as that of the calculator, which has not changed in the time post her affidavit. Mr Lynch [136] Mr Lynch is the Executive Chairman of Citigold, which is a publicly listed company. Mr Lynch has been Executive Chairman since September 2013, although his association with Citigold and its predecessors goes back much longer. [137] Mr Lynch is also a Personal Representative of the Estate of his late father, James Lynch (the estate). Issues relating to the estate are particularly relevant to some infrastructure agreements relating to Citigold. [138] Mr Lynch lives in Dubai. He has lived there since 2003.104 He was born in 1956.105 He grew up in Sydney and spent a six year period living in Charters Towers from 1986 to 1992.106 [139] Mr Lynch’s late father formed Citigold for the purpose of developing the gold field that Great Mines L i m i t e d and Charters Towers Mines had put together.107 The three companies were in a close relationship until 2004, when Citigold took over the other two companies.108 104 T 7-25 lines 41-44. 105 Exhibit 32, MJL-44 at p 1. 106 T 7-28 lines 9-20. 107 T 7-27 lines 22-30. 108 T 7-26 line 40 – T 7-27 line 10. 39 -- 39 of 118 -- [140] Mr Lynch accepted that it was fair to say that he had a continuity of experience in working for the three interrelated companies,109 and that although Citigold was now a public company: “…there’s been a – a family connection and a family interest, a desire to see this project succeed; and therefore we’ve taken a very close personal interest in it.”110 [141] Mr Lynch receives significant remuneration from Citigold, including a yearly salary of $468,830,111 and Mr Lynch or parties related to him own 88,347,084 shares in Citigold.112 [142] I agree with Mr Dillon’s submissions that Mr Lynch’s interests are closely aligned with those of the Appellant and his evidence should be considered in that context. As an executive director of the Appellant, Mr Lynch owes contractual, tortious and fiduciary duties to Citigold. [143] That however does not mean that his evidence should be disregarded. [144] My impression of Mr Lynch was that of a very competent witness who gave confident answers. I was at first concerned by the length of some of his answers in cross-examination, with perhaps what could be seen as a tendency at times to answer the question that he wanted to answer, rather than the direct question asked. [145] However, during re-examination, my concerns regarding Mr Lynch’s manner in answering questions primarily evaporated. Mr Lynch’s answers during re-examination tended to be longer – and at times much longer – than his answers in cross-examination. Accordingly, rather than being a tactic to avoid answering questions, it is my view that Mr Lynch’s answering style was to be as expansive and extensive he could be so that his views were fully aired and understood. [146] Mr Lynch has prepared four Affidavits in the proceedings. They are: (a) Affidavit of Mark Lynch affirmed 28.09.15.113 (b) Affidavit of Mark Lynch affirmed 3.11.15.114 (c) Affidavit of Mark Lynch affirmed 02.02.16.115 (d) Affidavit of Mark Lynch affirmed 07.03.16.116 [147] Mr Lynch gave evidence about the Charters Towers Gold Project; the transfer of unallocated state land to the estate; the financial standing of Citigold; and the proposed 109 T 7-27 lines 30-40. 110 T 7-28 lines 3-5. 111 Exhibit 35, Citigold Annual Report 2015 at p 34 – payments to Directors and Key Management Personnel, and p 35 – Service Agreements – Executive Chairman. 112 Exhibit 35, p 31; T 8-8 lines 0-5. 113 Exhibit 5. 114 Exhibit 12. 115 Exhibit 32. 116 Exhibit 55. 40 -- 40 of 118 -- use of the underlying land following the completion of the Project, including the community tourist attraction and the gravel supply business. [148] Mr Lynch’s was subject to extensive cross-examination. The evidence he gave can be put in summary this way: (a) his involvement at Citigold is entrenched within the company having been commenced by his father who pegged all the prime mining leases in tenure converted subsequently into MDLs, which are the pre-existing tenure to the present MLs and associated with the environmental authority in question in this proceeding;117 (b) Charters Towers Gold Mines (as Citigold was formerly known) was formed in 1992 as a joint venture with Great Mines Limited; (c) his knowledge of the history of mining at Charters Towers is extensive, having in his words identified the areas for blasting and been involved with the initial breaking of ground for the areas subject of the present proceedings; (d) he has had more or less a continuity of mining experience working for Citigold, Great Mines Limited and Charters Towers Mines all of whom are closely interrelated;118 Mr Lynch noted that this is not the extent of his experience but certainly he does have extensive knowledge of the Citigold Project, tenure, history of mining at Charters Towers, and both from an executive level and from a practical on the ground experience level; (e) Citigold is a publicly listed company that has a close connection with the Lynch family and the community. It is by all accounts a profit making enterprise, the purpose of which is to mine gold reefs for the Charters Towers region;119 (f) in undertaking activities of locating gold reefs, and using some of the geophysical properties, the aim is to find the sulphides because that is a region that could then have high grade gold in it, which is ultimately what the company is looking for;120 (g) the Project has the potential to go for 30 years, but that will depend on the rate of blocking out of high grade gold in front of the mining. A number of factors came into consideration in terms of determining the length of mining 117 T 1-26 line 43. 118 T 7-27 line 35. 119 T 8-2; 7-28 line 29. 120 T 7-29 line 1. 41 -- 41 of 118 -- namely, price of gold, operating costs and proven ore reserves. Each of which only provide an opportunity to estimate that in a reef mining operation two to three years of where you’re currently located. Accordingly whilst it may be the case that a 30 year life of mine is optimal and what has been reported to the market as with any company there are variables which may impact on this aspect of things. Nevertheless Mr Lynch confirms that the mine has the potential to go for up to 30 years based on the known resources presently;121 (h) In respect of bore holes across the three sites of Black Jack, Imperial and Central, he attempted to answer these questions based on his knowledge of operations when he was involved with the drilling and then subsequently by observation to the holes and the existence of those holes on the site. Subsequently he was directed to the Plan of Operations122 and asked a series of questions about the accuracy of the number of drill holes that are likely to be left open at any one time. In particular it was suggested that the drilling of core holes is a collective mass such that the holes are drilled consecutively with large numbers being left open until the drilling program is completed before the contractor would return to cap the earlier drilled holes. Mr Lynch attempted to be of assistance to the Court in respect of these matters, although his knowledge was limited because he did not prepare the Plan of Operations; (i) Mr Lynch was asked a series of questions regarding the number of drill holes for exploration. Mr Lynch responded to the best of his knowledge based on observations that he had made on site. Whilst I consider Mr Lynch’s responses in relation to this area of cross-examination to be of as much assistance to the Court as he could be based on his knowledge of the site from the time that he was historically involved up to the present, but the utility of such evidence is limited as he was not directly involved with the actual drilling of the holes in question;123 (j) Mr Lynch was then asked a series of questions regarding the carrying out of testing of waste rock and processed all waste from the time exploration commences with a view to being able to develop enough information to deal with those waste products. In particular it was suggested to Mr Lynch 121 T 7-29 lines 15-30. 122 Exhibit 6. 123 T 7-32 line 34. 42 -- 42 of 118 -- that it’s important to test the waste products produced by the mines to know what waste is being produced and where it’s going to be stored.124 Mr Lynch’s evidence is that it is very important to understand the waste rock so you know what is required or not required to keep it safe. He went on to say knowing what ores are going into your plant is also important because ultimately it ends up in the TSF. Mr Lynch’s response in respect of this line of questioning is based on his knowledge of the historical work undertaken in determining the Charters Towers background geology. Mr Lynch’s evidence in this regard was that of a well-informed miner, as a means of assisting the Court, but without purported or prescribed education experience in the area of geological analysis. Nevertheless his evidence in this respect ought not be disregarded because of his firsthand experience in terms of drilling, blasting, placing and processing of ore and waste rock material. Furthermore Mr Lynch gave evidence that full diamond core (RC core) drilling is undertaken of the area with comprehensive analysis being undertaken of those drill cores. His evidence is that if anything unusual comes up its flagged but ultimately it is possible to determine based on visual analysis what the types of material are. Mr Lynch is the chief executive of Citigold Corporation and does not undertake the assessment and verification of the geological material personally but rather was responding to these questions based on his historical knowledge gained from experience and discussions with geologists having taken direction from those geologists in the past;125 (k) When questioned about the processing plant in terms of its location being unallocated state land at Blackjack, it was suggested to Mr Lynch that the gravel operations would be unable to proceed in the event that the processing plant had to be decommissioned and removed from site. Mr Lynch gave evidence that in fact the processing plant could be moved. This position is supported both by Mr Lynch and Mr Towsey;126 (l) Mr Lynch was questioned at length with regard to whether or not the waste and the TSF and WRD was regulated waste under the EP Act. In my view he endeavoured to answer these questions as best as he could to assist the 124 T 7-37 line 40. 125 T 7-39. 126 T 8-41 line 45. 43 -- 43 of 118 -- Court but ultimately Mr Lynch is by his own admission not a geologist;127 (m) Mr Lynch gave testimony that neither he nor Citigold were asked to provide any data by Mr Anderson. Mr Lynch stated “He asked for nothing collected nothing and just walked around and took photos and left.128 [149] Mr Dillon for the respondent contends that the evidence Mr Lynch gave was at times evasive or contradictory and he was prone to exaggeration. Mr Dillon’s included such topics as:129 1. Mr Anderson’s expertise and approach to the financial calculations.130 2. The estate, the activities of the estate and the supposed “gravel business” run by the estate, which on his own evidence simply consisted of allowing other parties to process gravel. 3. The “symbiotic” relationship with the Council and the community, and the supposed support given by Council with respect to the proposed tourism and gravel businesses. 4. The involvement of Mr Lynch in the estate and gravel business. 5. The involvement of Mr Francis Rigby, Citi gold’s company secretary, in the preparation of the business plans for either Citigold or other parties. [150] Mr Dillon submits that the Court should treat Mr Lynch’s evidence with care and give it very little weight, particularly when it comes to scrutinizing the landowner agreements and statements; the genuineness of those agreements and statements; and the likelihood of either the gravel or tourism businesses ever proceeding. [151] I cannot agree with all the submissions of Mr Dillon and in particular his conclusion that Mr Lynch’s evidence should be given very little weight. I will deal with the five key areas of complaint by Mr Dillon separately. [152] Firstly, I agree that Mr Lynch was rather dismissive of the evidence of Mr Anderson, the expert witness for the respondent. I do not take any of Mr Lynch’s evidence contra to Mr Anderson into account. Primarily, the expert evidence of Mr Anderson will be tested alongside the expert evidence of Mr Thompson for Citigold. [153] As regards the activities of the estate and the gravel business, Mr Lynch’s evidence was that the estate was clearly involved in part of the gravel business, in that it received some income by selling product to intermediaries who process the crushed rock.131 127 T 7-40 line 42. 128 T 9-44 line 30. 129 Respondent’s submissions, para [93]. 130 T 9-20 lines 28-45; T 9-20 lines 5-45; T 9-70 lines 15-23; T 9-71 lines 17–29. 131 T 8-76 line 29 – T 8-77 line 19. 44 -- 44 of 118 -- [154] The manner in which the estate chooses to generate income out of the crushed rock is a matter for it, but it is clearly part of the gravel producing process by being the supplier for profit of the crushed rock and allowing use of its facilities by intermediaries for the processing of that crushed rock into gravel. [155] I now turn Mr Dillon’s attack on Mr Lynch’s relationship with the local council. The evidence makes it clear that the council has given its agreement in principle to the proposed tourism and gravel businesses.132 [156] It must be remembered that the evidence shows that Citigold has plans which may include a further 30 years of active mining activity. Although there would of course be some progressive rehabilitation during this time, it would appear that much of the rehabilitation would not occur until after the cessation of mining activities. Given therefore the uncertain timeframe for when Mr Lynch’s planned tourism and gravel businesses would actually start operating, it is only logical that an approval in principle would be obtained from the local council rather than a full, formal approval. No doubt, had Mr Lynch not obtained the approval in principle of the local council, the respondent’s attempts to make the proposed tourism and gravel businesses little more than ‘pie in the sky’ concepts would have been emboldened by an argument that Mr Lynch had not even bothered to obtain local authority approval in principle for his proposed businesses. [157] It is clear that Mr Lynch does not have a detailed knowledge of the operation of the estate, that responsibility primarily falling to his brother Peter Lynch who lives in Sydney. However, Mr Lynch has provided sufficient documentary evidence as to landholder agreements with Citigold relating to the estate, as well as documents and evidence regarding the gravel business. [158] Turning next to the involvement of Citigold’s Company Secretary, Mr Rigby, there certainly are question marks over Mr Rigby’s preparation of business plans for either Citigold or other parties. [159] Mr Rigby was appointed company secretary on 1 September 2015.133 [160] Mr Lynch gave evidence regarding the plans for the gravel business going back to 1993. Mr Lynch gave evidence that he as a personal representative of his brother, Peter Lynch, asked Mr Rigby in a personal capacity to prepare a business plan for Queensland Gravel,134 a trading name of JJ Lynch Estate, a business which was subsequently transferred to his brother.135 132 T 8-66 lines 11-14 – T 8-66 lines 43-46 and Exhibit 32, pp 37 and 40. 133 Exhibit 11, p 19 and Exhibit 34, p 7. 134 T 9-2 lines 19-26 and Exhibit 5, p 166. 135 T 8-78 lines 1-47. 45 -- 45 of 118 -- [161] Mr Lynch also gave evidence that Mr Rigby was asked by him as a director of Citigold to prepare a business plan for a Tourism Business.136 While unorthodox, Citigold has evidence an ongoing intention to realise a plan for a tourism business culminating in the business plan.137 [162] Mr Lynch was clear and open that neither he nor Mr Towsey had the necessary skill set to prepare a business plan and that prior to his appointment Mr Rigby had 14 years’ experience as a financial planner.138 [163] It is logical that when you have an idea for a business but do not possess the relevant skill set to realise that idea you hire someone to do this job for you. Ideally this could have occurred prior to appealing the amount of financial assurance and provided to the department at the time of the internal review, as it happened this did not occur but the business plans are well made and support the plans/intentions that were rejected by the original decision maker as stated in Exhibit 2, the Amended Notice of Appeal: “(i) In the Statement of Reasons, the Respondent stated that: 11. … Citigold, as the landowner of the majority of the land which is covered by the mining leases, considers tha tit does not have to account for the decomossioning and removal of infrastructure and services because its intention is to use that infrastructure and services because its intention is to use that infrastructure, either for a mining tourist attraction or grave processing operation. 12. At the time of making my decision no landowner statements that supported the above intentions were before me. As such I did not place weight on these intentions.” [164] Although the timing and preparation of the business plans is suspicious, I do not believe they are a sham. I accept the evidence of Mr Lynch that the infrastructure agreements represent a legitimate intention to use the stated infrastructure after mining, for gravel and tourism ventures. [165] Without a doubt, primarily due to Mr Lynch’s paid position and shareholding in Citigold, his evidence must be treated with caution. Notwithstanding, I am satisfied with the evidence that Mr Lynch gave and in particular of his honest intentions to ultimately open a tourism operation at Central when mining at Central ceases, as well as his intentions regarding a gravel business. Mr Lynch gave open clear evidence that was generally of assistance to the Court and credible. Mr Towsey [166] Mr Towsey is a difficult witness to describe. He was not called as an expert as such but he clearly has high levels of expertise. 136 T 9-2 lines 19-26. 137 Exhibit 5, pp 208-229. 138 T 8-78 lines 28-29 and T 8-78 lines 14-15. 46 -- 46 of 118 -- [167] In his affidavit,139 he describes himself and his role in Citigold this way: “1. I am an Executive Director and the Chief Scientist of Citigold Corporation Limited (Citigold), a publicly listed mining and exploration company. 2. I hold a Bachelor of Science (Honours) and Master of Science degrees from the University of Sydney as well as a postgraduate Diploma in Education from Sydney Teachers' College. I have also qualified for the statutory position of Site Senior Executive by the Board of Examiners under the Coal Mining Safety and Health Act 1999 (qualification number BOE-SSE/11/020). I am a geologist specialising in geochemistry. 3. I have worked for Citigold since July 2002 as General Manager Mining and later Chief Operating Officer and held the role of Chief Scientist since April 2014. 4. My responsibilities as Chief Scientist include (but are not limited to) the following: (a) acting as the Competent Person for reporting of Mineral Resources and Ore Reserves under the Joint Ore Reserve Committee (JORC) Code; (b) overseeing the collection and analysis of geochemical, hydrological and environmental samples; (c) providing scientific input and analysis relevant to solving specific issues as they arise; and (d) providing direction in the management of occupational health, safety and environmental (OHSE) risks. 5. I have been working in the mining, exploration and OHSE auditing industry for 40 years. I have carried out this type of work in 26 countries, not just in Australia. 6. I have previously been a Director of the Queensland Resources Council, and have held Chief Geologist, Exploration Manager, Chief Operating Officer and Managing Director positions in exploration, underground gold mining and drilling companies. I have also held the statutory position of Site Senior Executive in gold and coal mines. 7. Exhibited to this affidavit and marked ‘CAT-1’ is a true copy of my curriculum vitae.” [168] The paragraphs quoted above from Exhibit 47 clearly indicate that Mr Towsey has worked continuously for Citigold in one form or another since July 2002. However, a closer inspection of exhibit 47 reveals that this not the case. [169] Mr Towsey’s personal resume forms part of exhibit 47.140 His resume sets out his career history in detail, in summary it shows that from April 2014 to the present time Mr Towsey has held the positions of Executive Director and Chief Scientist with Citigold. From March 2014 to April 2014, Mr Towsey was a Non-Executive Director. Before that, from January 2011 to March 2014 Mr Towsey held the positions of Group Manager – Safety and Health and Site Senior Executive on Jax and Cows Coal Mines employed by QCoal Pty Ltd. 139 Exhibit 47. 140 Exhibit 47 CAT-01. 47 -- 47 of 118 -- [170] Mr Towsey held the positions of Chief Operating Officer and Site Senior Executive with Citigold from January 2004 to January 2011, and the position of General Manager Mining and Exploration, Citigold, July 2002 to January 2004. [171] His resume goes on to show that he has held in his work career senior positions with major companies in the mining and exploration fields, including companies such as BHP Minerals Exploration, Mount Isa Mines Ltd, and Century Drilling Ltd. [172] Importantly, Mr Towsey’s resume shows that from September 1987 to April 1994 and from December 1998 to the present Mr Towsey has held the position of Managing Director of Pathfinder Exploration Pty Ltd, a private unlisted company, which is an independent geological consultancy specialising in mineral exploration management and auditing of geological exploration and safety departments of major companies. Mr Towsey lists his major achievements in Pathfinder Exploration Pty Ltd as follows:141 “Major Achievements • Initiated and drove a successful consulting business for 17 years. Clients included BHP, MIM, Cyprus, Aust Ores and Minerals, Bruce Resources, Battle Mountain, Delta Gold, Charters Towers Gold Mines and the Anglican Church. • Increased Chatters Towers Gold Mines gold resources by 50% in nine months and presented technical data to stockbrokers resulting in $3M private share placement in unfavourable market (March 2000). Contributed to innovative capital raising scheme to raise $25M. Took resources from 200,000 ounces to one million ounces in 18 months at <$5/oz. • Initiated drilling programs and mineral resource estimates on the Mighty Atom, Surprise, Barbara and Mt Olive copper mines and successful pre-feasibility studies. • Successfully defined the geochemical outline of the Esperanza deposit (Gunpowder), which is currently being drilled to ore reserve status. • Discovered diamond indicator minerals in n01th-eastem Victoria. • Authored refereed research paper on geochemical exploration techniques in Queensland (Journal a/ Geochemical Exploration)” [173] This level of detail is important as, on 18 May 2012, Mr Towsey prepared a technical report titled “Mineral Resources and Reserves 2012 Charters Towers Gold Project Citigold Corporation Ltd (Gold and Silver)”. At the head of the front page of the document appears logos of Citigold Corporation and Pathfinder Exploration, this document is Exhibit 54 in these proceedings and is very extensive, containing 173 pages of technical detail regarding Citigold’s operations. [174] Without doubt, in my view, Mr Towsey was not an employee of Citigold at the time of preparing exhibit 54. Any doubt in this regard is removed by Mr Towsey’s JORC statement142 as follows: 141 Exhibit 47 CAT-01, pp 4-5. 142 Exhibit 54, p 6. 48 -- 48 of 118 -- “JORC STATEMENT - The following statements apply in respect of the information in this report that relates to Exploration Results, Mineral Resources and Ore Reserves: The information is based on, and accurately reflects, information compiled by Mr Christopher Alan John Towsey, who is a Corporate Member and Fellow of the Australasian Institute of Mining and Metallurgy and a member of the Australian Institute of Geoscientists. Mr Towsey is a consultant geologist. He has the relevant experience in relation to the mineralisation being reported on to qualify as a Competent Person as defined in the Joint Ore Reserves Committee GORC) Australasian Code for Reporting of Identified Mineral Resources and Ore Reserves, having worked on the Project as a consultant and former full-time employee since 1999. Mr Towsey has consented in writing to the inclusion in this report of the matters based on the information in the form and context in which it appears.” [175] There are some noteworthy points highly relevant to the current proceedings that are made by Mr Towsey in Exhibit 54. [176] Under Part 18.0 Project Infrastructure, Mr Towsey has this to say about dumps and stockpiles:143 “Dumps and stockpiles - Run-of-Mine (ROM) stockpiles are established at the Imperial Mine and at the gold processing plant to ensure surge capacity from variable underground production is stored awaiting haulage to the processing plant or crushing at the plant. Waste material from the Imperial Mine is dumped on an above-ground stockpile at the mine. The material is non-acid-forming granite and granodiorite, which is crushed as required for gravel for mine roads and backfill.” [177] In that same part, Mr Towsey has this to say as regards tailings disposal:144 “Tailings disposal - tailings comprise mostly 80% minus 106 micron fine quartz sand, crushed granite, minor clay and some metal sulphides (pyrite, galena and sphalerite) averaging around 9000 ppm lead and zinc and 0.05 to 0.2 ppm gold at a slightly alkaline pH of 8.5 to 10. There is no acidic run-off as process water has lime added to it to maintain an alkaline pH, and the weathered granite generates calcium carbonate as the feldspars decompose, neutralising any acid that may form from the decomposition of the sulphides. Tailings are stored in a registered tailings storage facility ('TSF') at the processing plant, with process water being recycled. The very high evaporation rate in the semi-arid Charters Towers area ensures tailings are solidified. The TSF measures about 600 metres by 300 metres with a design storage capacity of some two million tonnes and area for expansion.” [178] Under heading 20.6 Mine Rehabilitation and Shutdown in exhibit 54, Mr Towsey makes the following observation:145 “An allowance of $2 per tonne of ore mined has been budgeted to cover progressive rehabilitation and final mine shutdown. With the current planned production schedule, this amounts to some A$18 million over 15 years.” [179] I should make some immediate comment regarding Mr Towsey’s estimate of $18,000,000 being spent on progressive rehabilitation and final mine shutdown by Citigold. A cursory glance at such sum shows of course that it is above the amount of financial assurance sought by the respondent from Citigold. Given that Citigold’s then consultant and now Executive 143 Exhibit 54, p 132. 144 Exhibit 54, p 133. 145 Exhibit 54, p 140. 49 -- 49 of 118 -- Director and Chief Scientist has arrived as recently as 2012 at such a figure, one may rhetorically ask the question; What is this case all about given that statement? [180] Mr Towsey explained146 that the sum of $18,000,000 referred to was budgeted for progressive rehabilitation and final shutdown over a period of 15 years. This is a normal part of mining operations. Put simply, the more that a miner mines, the more impact the miner will have on the environment, and the greater the rehabilitation that will have to occur. Financial assurance is however, in my view, having taken particular note of the evidence surrounding the reason for the current financial assurance scheme operating, is completely different. The financial assurance will be called upon when a miner stops mining and goes into liquidation/abandons the mine site/or the like. The financial assurance is to be a sum to rehabilitate the land back to an acceptable standard should those circumstances arise. It is a full rehabilitation at a particular point in time, not a progressive rehabilitation over an extended life of an operating mining program. [181] The respondent can gain no comfort for its case by relying upon Mr Towsey’s sum of $18,000,000 derived for a different purpose under completely different conditions circumstances. [182] It is noteworthy at this point that both experts Mr Anderson and Mr Thompson confirmed that they had regard to exhibit 54, Ms McIntyre submits that Mr Towsey’s evidence of the Metallurgy and Geochemistry of the awe body and open burden was unchallenged.147 I tend to agree. Noteworthy evidence that Mr Towsey gave in this regard is as follows: “PAF doesn’t go into the waste rock. Potentially acid forming material is the ore that we put through the processing plant.”148 … “You have to understand how the mining procedure goes. We drive tunnels through the background material. That is looked at as material goes through. We then drive along the ore bodies, and that material is actively sampled every face. We advance about 3m every time we blast. Each face is sampled with a number of samples taken across that area. So there’s a chemical analysis taken in potentially acid forming material every three metres…where we encounter it.”149 “Well, you could not say that without knowing what the alkaline load, so to speak, and the acid load in the TSF is?--- We do know. We know there’s two per cent sulphide in there. Alright? There’s two per cent sulphide. We’ve established that from all the chemical analysis we’ve done. Part of that is galena, lead sulphide, which is acid consuming, not acid producing. Part of it is sphalerite, zinc sulphide, which is also acid consuming. And there is a small amount of pyrite which is acid producing, but it is so outweighed in its own sulphide by the acid consuming sulphides - not all acid - not all sulphides produce acids. Some sulphides, galena and sphalerite, are acid consuming. And we have 146 T11-81 lines 18-46. 147 Citigold’s submissions, para [417]. 148 T 10-54 lines 14-16. 149 T 10-55 lines 3-11. 50 -- 50 of 118 -- more acid consuming material, by a long way, than we have acid producing. So there’s no way that anything in that tailings dam can produce acid, even if it is subjected to 100 years of adding acidic rain to it or adding acidic humic acid of the soils.”150 [183] Mr Towsey’s evidence is that there were three types of waste, they are overburden, waste rock, and tailing,151 and that Citigold does not have waste rock. As he put it: “We don’t have waste rock. We have processed everything which looked like it might contain mineralization. We have overburden. We have non-mineralized materials. We don’t have a low-grade stock pile. We don’t have mineralized material sitting at the surface. We haven’t – what – what we characterize as waste is what has gone through the processing plant and is now called tailings. So we have overburden stock piles. We have tailings. We don’t have anything I would describe as a waste rock stock pile which has been subject to some sort of processing.”152 [184] His evidence was also that the financial assurance calculator, under domain 4, lists overburden and waste rock, clearly defining them as two separate terms, with overburden the background material.153 He went on to explain that Citigold did not undertake rock modelling of the overburden and that it is standard mining practices to develop a block model of the ore body that you intend to mine, not the waste rock that is characterized, chemically identified and stored.154 [185] Mr Towsey gave further evidence that visual control of an ore body is sufficient in this area because of the mineralogy of Charters Towers, and that in this respect selective handling is not necessary.155 [186] Mr Towsey stated that the analysis of the tailings was not just for gold recovery rates but also to determine lead and zinc levels,156 and that the periodic sampling undertaken on the TSF along with the tailings themselves were available to the experts and that Mr Thompson asked for chemical analysis data which was supplied to him.157 [187] It is Mr Towsey’s view that Citigold in undertaking its testing of both the overburden and tailings contained in the TSF along with the various water testing and other testing activities undertaken by the company, is sufficient to meet its obligations under the EA. To the extent that it is required to do anything further, Citigold has not been informed of this.158 Further, as a result of the proceedings, Citigold has taken the view that it will undertake a block model of the TSF and in fact has already drilled eight holes and sampled 1m of material.159 150 T 10-56. 151 T 10-43 line 10. 152 T 10-44. 153 T 10-45 line 5 154 T 10-43 line 30. 155 T 10-44. 156 T 10-48. 157 T 10-49 line 15 and T 11-16 regarding process of sampling. 158 T 10-51. 159 T 10-51 and T 10-52. 51 -- 51 of 118 -- [188] As regards rehabilitation, Mr Towsey’s evidence is that the rehabilitation plan is reviewed and assessed every two years as is required under the Mining and Quarrying Safety and Health Act 1999 requirement to update the standard operating procedures (SOPs). His evidence is that if upon reviewing the SOPs nothing material has changed, then there’s no need to update or amend anything.160 [189] Mr Towsey says that it is not possible to conduct a rehabilitation trial on the TSF until such time as the TSF is not actively in use.161 Mr Towsey’s evidence in this regard in on the basis of the size of the TSF and the way the TSF is set up. He stated: “It has a ring main around the outside. It feeds from the ring main to a series of spigots which then deposit the tailings in certain areas and we have to move the area to different areas in order to keep the pond area up where we need it to be and to drain the beached areas to ensure we have a dry TSF.”162 [190] In terms of undertaking trials of rehabilitation in respect of the TSF, Mr Towsey gave the following evidence: “The purpose of the trials is to monitor the rate at which vegetation regenerates over rehabilitated areas so we can harness that material and weigh how much grass is going to be developed on that area, because the final end result of capping the TSF is to feed two cows. It’s to be returned to lower intensity grazing which is one cow per 8 hectares. We have a 20 hectare TSF. It only has to support two cows. We have to measure to make sure there’s enough grass - is going to grow in top soil we put on the TSF to support two cows.”163 [191] Further, both Exhibit 54 and CAT-14164 influenced the preparation of the Plan of Operations regarding his knowledge of background geology and the requirements for rehabilitation on site. [192] The above evidence primarily supports the case of Citigold. However, that is not the full extent of Mr Towsey’s evidence as pointed out by Mr Dillon.165 [193] Mr Towsey disagreed that it was important to have routine samples of waste rock, and like Mr Lynch he also equated selective handling with the separation of ore and waste rock.166 [194] The waste rock on the waste rock dumps or stockpiles was only selectively handled in the sense that waste material was selectively separated from ore167 by way of a visual selection.168 Contrary to Citigold’s own terminology169 and accepted mining 160 T 11-5. 161 T 11-6 line 20. 162 T 11-6 line 35. 163 T 11-7 line 10. 164 Exhibit 47. 165 Respondent’s submissions, para [106]. 166 T 10-43 lines 32-48. 167 T 10-44 lines 35-37. 168 T 10-44 lines 20-26; T 10-46 lines 30-36. 169 Waste Rock Report, March 2014 (Exhibit 28). 52 -- 52 of 118 -- terminology170, Mr Towsey did not accept that the waste rock dumps contained waste rock. As he put it:171 “And Citigold doesn’t carry out selective handling of the waste rock that’s produced?---We do at times where it’s possible. It hasn’t carried out any systematic handling – sorry. I withdraw that. It hasn’t carried out any consistent selective handling process for the waste rock in the waste rock stockpiles, has it?---Yes. It has. Well - - -?---That’s how it got on the waste rock stockpile. It was selected – it was identified as waste, selectively handled as waste, and put onto a waste stockpile. And that’s the extent of it, isn’t it. No further tests?---We don’t have waste rock. We have processed everything which looked like it might contain mineralisation. We have overburden. We have non-mineralised material. We don’t have a low grade stockpile. We don’t have mineralised materials sitting at the surface. We haven’t – what – what we characterise as waste is what has gone through the processing plant and is now called tailings. So we have overburden stockpiles. We have tailings. We don’t have anything I would describe as a waste rock stockpile which has been subject to some sort of processing. Well, the overburden is waste rock?---No. It’s not.” [195] Mr Towsey sought to characterize material in the waste rock dumps as being “background material” which had been moved 100m or 150m,172 although he accepted that the waste rock “may contain the odd bit of sulphides”,173 and various amounts of heavy metals. When questioned about this, the following exchange occurred:174 “Well, are different loads put in different spots, you know, depending on the characterisation of the overburden?---We have an arrangement in our EA where, if material is identified as potentially hazardous, it may be inserted into a part of the stockpile and therefore isolated within the stockpile. To my knowledge, that’s never been done, because the material we are looking at is simply background material that we’re shifting. And it’s background material that you don’t systematically test and characterise?--- No. Because it is background material. The whole point of contamination is it has to be different from background.” [196] Contrary to both Mr Thompson and Mr Anderson, Mr Towsey did not accept that any form of acid, saline or metalliferous drainage could result from the waste rock dumps. [197] In addition, there is no block modelling of the waste rock dumps, and there is no block modelling of the waste in the TSF and such modelling isn’t necessary because the tailings are contained, although Citigold now intends to block model the TSF waste. 170 Agreed glossary definition “Waste Rock”. See also EP Act s 13 for the definition of “Waste”. 171 Respondent’s submissions, para [106]. 172 T 1-45 lines 3-5. 173 T 1-54 line 20. 174 T 10-45 lines 28-37. 53 -- 53 of 118 -- [198] Mr Towsey accepted that there would be some level of sulphidic material deposited in the TSF after processing which would oxidise, but he stated that the acid would not be produced because of other acid consuming materials.175 [199] When Mr Towsey was asked about the contents of the TSF the following exchange occurred:176 “Now, the TSF contains hazardous contaminants?---We are authorised to put hazardous contaminants into that TSF. Correct. Yes. And it contains hazardous contaminants?---It contains contaminants which could be hazardous under certain circumstances. Yes. And they’re capable of causing environmental harm?---Only if they escape from the TSF. We’re authorised to put them in there. That’s the container for them. And the TSF is – the tailings are the waste product of the ore body and the liquor that’s applied to the ore body - - -?---Correct. - - - through the processing?---Yes. And the tailings, therefore, contain heavy metals?---Yes. They do. Sulphates?---Yes. And sulphates contribute to salinity?---Under certain circumstances, yes.” [200] Mr Towsey agreed that metalliferous drainage was capable of being produced in alkaline or neutral pH conditions, but he said it could be very beneficial to the environment. He did not accept that saline drainage was capable of being produced at the Citigold site at all.177 [201] Mr Towsey gave evidence that the TSF was sampled in 2006 and 2007 and periodically as required,178 and that the data was provided to Citigold’s solicitors to provide to Mr Thompson.179 He stated that Citigold intended to block model the TSF and that eight holes had been drilled which were sampled at one metre intervals.180 [202] In re-examination, Mr Towsey explained his own approach to rehabilitation strategy as follows:181 “So why is it that your rehabilitation strategy contained in the plan of operations is so vastly different to that of Mr Anderson and Mr Thompson?---The requirement for financial assurance it should be no more than the amount actually required to do the job. So we looked at what was required to do the job, to feed 10 cows, which basically is the restoration of 77 hectares to low intensity grazing at a rate of one cow per eight hectares. We devised a strategy which we felt resulted in meeting the outcomes of the EA, that the landforms would be stable, they would be safe, non- polluting and self-sustaining to meet those outcomes. We did that, obviously, at minimum cost.” 175 T 10-57 lines 30-39. 176 T 11-26 lines 5-23. 177 T 11-28 lines 27-31. 178 T 10-49 lines 6-10. 179 T 10-49 lines 12-25 and following. 180 T 10-51 lines 5-8; T 10-51 line 44 – T 10-52 line 2. 181 T 11-70 line 39. 54 -- 54 of 118 -- [203] Mr Towsey accepted that it was standard practice to carry out rehabilitation trials to test proposed rehabilitation methods.182 In the context of questions about the TSF, Mr Towsey accepted that capping trials or trials about covers were very important,183 and that if a capping trial of the TSF was conducted you could get a response that would be representative of how the tailings dam would perform over time.184 [204] He accepted that it is similarly important to undertake trials with respect to things like waste rock dumps, although he maintained his denial that Citigold had no waste rock dumps.185 [205] There is a stark difference between the parties as to the way in which I should deal with the evidence of Mr Towsey. Ms McIntyre submits that Mr Towsey’s evidence with respect to the specific matters regarding background geology in Charters Towers; the geology of the project site; the specifics of gold extraction and processing; and the processing plant should be preferred over that of Mr Anderson and that such evidence also compliments the evidence of Mr Thompson.186 [206] Mr Dillon has a completely different approach to the evidence of Mr Towsey. He submits that Mr Towsey’s interests are closely aligned with those of Citigold, and as an executive director he has a duty to act in the best interests of the company, and that accordingly his evidence should be considered in that context.187 [207] Mr Dillon specifically submits that Mr Towsey was not nominated as an independent expert or relied upon in that capacity.188 [208] Whilst it is certainly true that Mr Towsey was not classified as an expert witness, it is clear from Citigold’s overall case that Citigold does rely upon Mr Towsey’s expertise. That distinction is particularly important for the period of time when Mr Towsey’s only involvement with Citigold was as an independent consultant. [209] Mr Dillon rightfully points out that Mr Towsey is a geologist and not a mining rehabilitation expert although he claims to have sufficient experience to manage that part of the operation.189 [210] Mr Dillon noted that at its highest Mr Towsey only claimed some experience in mining rehabilitation.190 182 T 11-5 lines 35-36. 183 T 11-7 line 23. 184 T 11-74 lines 18-24. 185 T 11-8 lines 19-26. 186 Citigold’s submissions, para [410]. 187 Respondent’s submissions, para [98]. 188 Respondent’s submissions, para [99]. 189 T 10-61 lines 24-26. 190 T 10-64 lines 8-18. 55 -- 55 of 118 -- [211] Overall, I agree with Mr Dillon that great care must be taken with Mr Towsey’s evidence. However, I do not go so far as to say that his evidence is of little or weight and should be disregarded. In many respects, his evidence is unchallenged and relates to a time when he was an independent consultant of high expertise. He also clearly has a thorough knowledge of the mining industry in general and the Citigold operation in particular. [212] Overall, where Mr Towsey’s evidence is in conflict with the expert evidence of Mr Anderson and Mr Thompson, the expert evidence of Mr Anderson and Mr Thompson must prevail. However, where there are areas of disagreement as between the experts in an area where Mr Towsey has given evidence, then in my view Mr Towsey’s evidence may be of some assistance to the Court in determining any such matter, although great care must be taken by the Court before any reliance is made on Mr Towsey’s evidence in this regard. In short, apart from those areas in this decision where I have specifically relied upon the evidence of Mr Towsey, I prefer the evidence of Mr Anderson and Mr Thompson. Ms Minnesma [213] Ms Minnesma is the Director of Minerals, Minerals and North Queenland Compliance, Environmental Services and Regulation Division of the respondent. She has supplied a detailed affidavit191 and gave evidence on 5 February 2016. [214] Ms Minnesma holds a Bachelor of Science (Environmental), Master of Science (Agricultural and Natural Environment) and Graduate Certificate in Public Sector Management. She has been employed by the respondent and its predecessors since 2000. [215] Ms Minnesma holds a delegation to determine the amount and form of financial assurance under s 295 of the EP Act.192 [216] As she put it in her affidavit:193 “In my current position and in my previous roles with the Department, I have been involved in the assessment of financial assurance under the Act, and with over 15 years of experience in regulation of the mining industry in Queensland, I have gained a thorough understanding of mine site operations, closure and rehabilitation. Particularly in the last five years or so, the Department has recognised that it generally holds insufficient financial assurance for mining and petroleum and gas projects across Queensland. This has come about following the 2012 review on financial assurance conducted by the Department, a 2013 report produced by the Queensland Audit Office and the development of the financial assurance calculator in 2014. … 191 Exhibit 9. 192 Exhibit 9, para [5]. 193 Exhibit 9, paras [8]-[9] and [11]-[12]. 56 -- 56 of 118 -- As a consequence of changes to the financial assurance regime, the Department must now assess financial assurance amounts having regard to the Financial Assurance under the Environmental Protection Act 1994 guideline, version 2. In my experience this has meant that the amount of financial assurance calculated under the guideline has generally increased as compared to historical financial assurance requirements, to more accurately reflect contemporary costs of rehabilitation.” [217] Ms Minnesma then goes on to state that on 27 November 2014 after receipt of the 2014- 2016 plan of operations, Dean Sharpe, an authorised delegate of the respondent, made a decision under s 295(1) of the EP Act that financial assurance in the amount of $12,509,000.00 was required. The form of the financial assurance was to be a bank guarantee from an approved financial institution.194 [218] Following an application by Citgold for an internal review of the original decision, on 9 January 2015, Sam Tarlinton, Delegate of the Department made a decision under s 521(8) of the Act to confirm the original decision to require financial assurance in the amount of $12,509,000.195 [219] Later in her affidavit, Ms Minnesma goes on to explain the reasons for the inclusion of a “contingency fee” of $942,016.38 in the amount of financial assurance considered by the respondent to be appropriate for the Citigold operations as at the date of her affidavit. I note that the amount of financial assurance is different to the decision made by Mr Tarlinton. Helpfully Ms Minnesma sets out her reasoning for a contingency fee and a summary of calculations for the amount of financial assurance, having in her affidavit earlier gone to great detail with respect to the various components of the calculations. Her evidence on the contingency fee and the financial assurance required is as follows: “103. Although a contingency fee is not expressly referred to in the guideline, the inclusion of a 10% contingency would help cover unknown or unexpected or under costed items, and ensure that all total potential costs to rehabilitate significantly disturbed land are covered. Total Financial Assurance Required 104. Without the contingency fee, the total amount of financial assurance required as currently calculated by the Department is $10,833, 188.37 and with the contingency cost is $11,775,204.75. 105. Table 8 is a summary of the Department's current assessment. Table 8: Department's Current Assessment Domain Rehabilitation Liability Domain 1: Infrastructure $2,182,971.20 Domain 2: Adits and Shafts $1,150,000 194 Exhibit 9, para [28]. 195 Exhibit 9 para [30]. 57 -- 57 of 118 -- Domain 3: Tailings Storage Facilities (1) $2,545,500 Domain 4: Overburden & Waste Dumps $2,983, 712.60 Domain 5: Water Management $47,280 Domain 6: Pits $480,700 Domain 7: Other Management Issues $30,000 Subtotal $9,420,163.80 Contingencies Rehabilitation Liability Project Management (10%) $942,016.38 Environmental Maintenance and Monitoring (5%) $471,008.19 Contingency (10%) $942,016.38 Subtotal $2,355,041;79 Total Rehabilitation Liability for the Operation and recommended bond. $11,775,204.75 106. Table 9 shows a comparison of the total financial assurance calculations by each party excluding GST as at the time of her affidavit. Table 9: Total Financial Assurance Calculations (excluding GST) Party Amount Citigold (Plan of Operations 2014) $534,016 Department (November 2014) $11,372,465 Mr Thompson $1,078,437.80 58 -- 58 of 118 -- Mr Anderson $11,775,204.75 Department (current - with contingency fee) $11,775,204. 75 Department (current - without contingency fee) $10,833, 188.37” [220] Ms Minnesma also gave important evidence in her affidavit regarding specific considerations relevant to the financial assurance required for the Citigold project:196 “41. A key difference between Citigold and the Department concerns the effect of Citigold's landowner agreement and landowner statement, and whether it is appropriate for infrastructure which is the subject of the agreement and statement to be excluded from the financial assurance calculations. 42. Another key difference between Citigold and the Department concerns infrastructure presently located on unallocated State land which third parties intend to buy, and whether it is appropriate for infrastructure which might become subject to a landowner agreement in the future to be excluded from the financial assurance calculations. 43. The guideline contemplates an EA holder making arrangements in the form of a written landholder agreement (with a third party landowner), or landowner statement (from the EA holder for land it owns) allowing for: (a) the transfer of infrastructure following the cessation of mining activities; and (b) the consequential omission of the remediation and rehabilitation costs associated with the infrastructure from the calculations about the financial assurance amount. 44. In assessing whether infrastructure which is subject to landowner agreements or statements should be excluded from financial assurance calculations, in my view the following matters are relevant: (a) Whether the items in question are actually infrastructure or services. (b) Whether the ultimate proposed use of the infrastructure items is consistent with the rehabilitation requirements and end landform rehabilitation requirements under the EA. (c) The risks and uncertainties associated with the proposed transfer of infrastructure including: i. Whether the landowner agreements or statements are sufficiently certain and enforceable. ii. Whether there might be a change in ownership of the land having regard to the expected life of the project. iii. Whether the landowner has obtained any necessary approvals to permit the use of the proposed infrastructure, and more generally, whether there is sufficient certainty that the proposed use will proceed. 196 Exhibit 9, paras [41]-[46]. 59 -- 59 of 118 -- iv. The risk that the proposed use of the infrastructure does not ultimately occur, or that it is used but subsequently abandoned, and the likely rehabilitation costs if that occurs. 45. With respect to the above: (a) The 2014 and 2015 annual reports produced by Citigold estimate that the operational life of the project could be over 30 years. (b) The Department has not been provided with evidence that the proposed tourism and gravel business uses have any necessary planning and environmental approvals in place, or that any necessary approvals would be obtained and effective when the project ends. (c) The State has not entered into a landowner agreement with Citigold with respect to infrastructure and services on unallocated State land. Although there are steps being taken by third parties to purchase that land, the purchase has not yet been effected. 46. In light of the expected operational life of the mine, the information provided by Citigold to date, and the uncertainties and risks involved, the Department's position is that the post mining infrastructure which is subject to the landowner agreement and statement, and on unallocated State land, should be included in the financial assurance calculations.” [221] Ms McIntyre is critical of the evidence of Ms Minnesma. She expressed her criticisms this way: “399. By reference to paragraph 44 of the Affidavit of Ms Minnesma, she confirmed in evidence that those matters contained in paragraph 44 are views held by her and her alone but it’s not something that has been identified in either the guideline or legislation. 400. Ms Minnesma confirmed that the guideline does not prescribe a contingency fee and indeed stated that she included it simply because she thought it was a good idea. 401. Ms Minnesma in her Affidavit and in evidence, concerns herself with the question of whether it is appropriate for infrastructure which is the subject of the agreement and statement to be excluded from the financial assurance calculations. Whilst it may be of interest to Ms Minnesma to consider whether it is appropriate for infrastructure to be returned, it is not what the EA nor what the guideline requires. Indeed at paragraph 44 and in evidence Ms Minnesa agrees that it is her view and not the view contained in the guideline. 402. Her observations are of value to the Court insofar as it provides the Court with guidance as to the use of the guideline. However, Ms Minnesma appears to be misguided in her understanding, despite her many years of experience, about the way in which financial assurance is to be assessed. 403. She accepts that the standard criteria is not referred to in either section 295 of the EP Act nor the guideline in respect to calculating financial assurance and as such it is submitted that Ms Minnesma’s evidence with respect specifically to the financial standing of Citigold, the content of the landholder agreement and the criteria against which financial assurance ought be assessed must be disregarded. 404. To the extent that the rehabilitation program is not consistent with the conditions of the EA, then it is submitted the Court ought defer to the position of Mr Thompson in those discrete areas. 60 -- 60 of 118 -- 405. That being the case, the Respondent failed to lead any evidence to suggest that the rehabilitation program contained in Exhibit 6 did not comply with the conditions of the EA. In any event if it were the case that the state felt that the rehabilitation program failed to comply with the conditions of the EA or otherwise the PoO was inconsistent with the conditions of the EA, then it should have notified Citigold of such a discrepancy and pursuant to section 291 of the EP Act Citigold would have been required to rectify that inconsistency. No such notification has been made to Citigold.” (footnotes omitted) [222] For his part, Mr Dillon submitted as follows: “130. In circumstances where neither the EP Act (in particular s 295(3)), nor the guideline require the automatic exclusion of infrastructure subject to landowner agreements or statements, the Court should take the approach of Ms Minnesma and Mr Anderson and include all of the infrastructure in the financial assurance calculations.” [223] Mr Dillon also made rather courageous submissions regarding the applicability of Ms Minnesma’s evidence to Guideline 3: “123. Although Ms Minnesma gave evidence at a time when version 2 of the guideline was in force, her evidence remains generally relevant to both version 2 and version 3 of the guideline.” [224] I use the word courageous deliberately, because Mr Dillon makes no attempt to justify his submission above by reference to any of the evidence nor to any legal authority as to why such comprehensive evidence as given by Ms Minnesma, particularly in her affidavit evidence, as to the calculation of the financial assurance payable by Citigold in accordance with calculations done under the calculator but pursuant to the guidelines as set out in Guideline 2 should apply to Guideline 3. [225] This is particularly troubling in circumstances where it was the State of Queensland which introduced the new Guideline during the course of these proceedings and, as strongly submitted by Mr Dillon, Guideline 3 is the appropriate guideline to use in calculating the financial assurance, yet no action was taken by the respondent in the six month period that it had available to it to bring together its evidence for the re-opened hearing to even obtain the most cursory affidavit from Ms Minnesma which could have indicated, for instance, her view that her assessment as to the financial assurance payable by Citigold had changed or not as a result of Guideline 3 now applying. The absence of any further evidence from Ms Minnesma is unexplained. [226] Ms McIntyre for Citigold makes the following strong submission in this regard: “[395] The Respondent has not led any evidence from Ms Minnesma in respect of the way in which the calculation of financial assurance should be undertaken pursuant to the new guideline Exhibit 69 and indeed Ms Minnesma has not filed a further Affidavit to state whether or not her opinion would change and if so to what extent in respect of the new guideline gazetted 4 March 2016. 61 -- 61 of 118 -- [396] Accordingly Ms Minnesma’s evidence in respect of the calculation of financial assurance must be confined to her views in respect of EM1010 [Exhibit 26]. At no point in her evidence nor in her Affidavit does Ms Minnesma state that her evidence is anything other than that confined in EM1010.” [227] I agree with Ms McIntyre’s submissions. In short. I do not know what Ms Minnesma’s evidence would be as to the appropriate amount of financial assurance payable by Citigold when Guideline 3 is applied. The Expert Evidence [228] As already indicated, expert evidence was given by two people, Mr Thompson called by Citigold and Mr Anderson called by the respondent. I will deal with Mr Thompson’s expert evidence first. Mr Thompson [229] Mr Thompson prepared two reports,197 a further statement of evidence,198 and co-authored with Mr Anderson two Joint Expert Reports, known as JER1199 and JER2.200 [230] Since 1993, Mr Thompson has held the position of Director, Land Resource Assessment and Management, Brisbane.201 [231] Mr Thompson has a Bachelor in Agricultural Science202 with a major in soil science203 and some 42 years of experience in the industry. He has extensive experience with acid sulphate soils,204 rehabilitation of land,205 land classification206 and beneficial use.207 In my view, his specific experience in metalliferous mining is limited, but for the purpose of this proceeding his experience with rehabilitation of contaminate land, vegetation impact resulting from chemical impairment, chemical mobility in soils and the impact that it may have on re-vegetation, receiving environment for soil and water, likely behaviours of cap and seal covers, behaviour of capillary breaks in rehabilitation covers, percolation rates and soil reaction in climatic conditions specific to the area of Charters Towers is of considerable assistance to the Court. [232] Ms McIntyre submits208 that Mr Thompson’s knowledge of soil mechanics, soil chemical composition and soil behaviour is of particular relevance to the proposed rehabilitation of the TSF and WRD’s and that specifically, his expertise with the prospective chemical 197 Exhibit 7 and Ex 8. 198 Exhibit 14. 199 Exhibit 13. 200 Exhibit 56. 201 Exhibit 7 at CV. 202 Exhibit 7 at CV. 203 T 2-8 line 15. 204 Exhibit 7 at CV. 205 T 2-8 line 5. 206 T 2-9 line 35. 207 T 2-9. 208 Citigold’s submissions, para [423]. 62 -- 62 of 118 -- impact on re-vegetation of those structures, capillary breaks and behaviours of cover designs is of relevance to the Court. She submits that the persuasive, authoritative field based evidence of Mr Thompson should be preferred over what she calls the academic desk-top analysis undertaken by Mr Anderson. [233] Mr Thompson has quite an extensive project and work history set out in his CV to Exhibit 7. I note in particular Mr Thompson’s oral evidence during his concurrent evidence with Mr Anderson that, at the time he completed his degree in 1974, his studies encompassed many fields within the one degree which, in more recent tertiary education times, have tended to become multiple, more specialised degrees. [234] Mr Dillon is critical of the fact that Mr Thompson only holds a bachelor of Agricultural Science with a major in Soil Science and has no other specific academic qualifications relating to post mining land rehabilitation,209 and further that he has no engineering qualifications and he is not a geologist.210 [235] Mr Thompson accepted that prior to 1992 the primary types of areas he worked in were soil and land classification and use,211 and that after 1992 soil and land classification and rural land use remained a major area of work and the main area of practice, although he was involved in land rehabilitation areas as well.212 [236] Mr Thompson said that his CV reflected the major project work that he carries out,213 and accepted that it was a fair reflection of his experience and the sort of work he did.214 [237] Mr Thompson accepted that it was fair to say that there was fairly limited reference to mine rehabilitation land work in his CV.215 [238] In respect of the particular resource projects listed in his CV, Mr Thompson accepted: 1. That it was not until 2008 that a resource project was listed in his CV. That primarily involved land use categorization and assessment and subsequent management of disturbed areas in respect of a pipeline.216 2. That his experience in beneficial use applications in 2011 didn’t primarily relate to land rehabilitation.217 3. The primary focus of the Alpha Coal project was on land resource assessment as part of an EIS, and although land rehabilitation requirements were part of it, 209 T 2-10 lines 35-40. 210 T 2-10 line 40 – T 2-11 line 6. 211 T 2-8 lines 31-35. 212 T 2-8 lines 43-45. 213 T 2-8 lines 17-18. 214 T 2-8 lines 20-21. 215 T 2-9 lines 4-6. 216 T 2-9 lines 7-13. 217 T 2-9 lines 15-25. 63 -- 63 of 118 -- the project didn’t have any rehabilitation components in it, because it hadn’t been constructed at that stage.218 4. The three beneficial use applications in 2013 related to irrigation projects involving an assessment of the use of CSG (coal seam gas) irrigation water, and not land rehabilitation in any general sense.219 [239] Following cross examination b y M r D i l l o n about projects specifically listed in Mr Thompson’s CV, the following exchange occurred:220 “… So I suggest, when one looks at your CV, there’s very limited experience listed in respect of mining rehabilitation?---I wouldn’t use the word very, but there’s limited experience in mining rehabilitation areas, yes. All right. And I suggest that that really reflects the fact that it’s not your main area of work?---It – it certainly hasn’t been over the many years. Yes. All right. And I suggest it’s still not your main area of work now?---It’s developing, the area of work. The – the type of disciplines, the type of projects that you get involved in, in a career as long as mine, does vary over time. Yes. Well, you never know where it might go?---That’s correct, yes. All right. But – but certainly up to – to this point in time it’s been a very small slice of your experience?---That’s correct, yes. All right. But certainly you – you have your Bachelor of Soil – of Agricultural Science with a major in soil science and – and, you know, you’re well qualified in that area. And quite apart from experience itself, you don’t have any particular academic qualifications in land rehabilitation or mining land rehabilitation?---No. That’s correct, yes.” [240] In the course of cross examination Mr Dillon also put propositions contained in mining literature and guidelines to Mr Thompson, including: 1. the Prediction Manual for Drainage Chemistry from Sulphidic Geologic Materials or MEND manual;221 and 2. the Australian Government report Managing Acid and Metalliferous Drainage, dated February 2007.222 [241] Mr Thompson said that he was aware of the existence of Exhibit 21, and that he accepted that it was a recognized publication in the mining industry, but that he wouldn’t say he was familiar with it.223 218 T 2-9 lines 28-38. 219 T 2-9 lines 40 – T 2-10 lines 4. 220 T 2-10 lines 19-39. 221 Exhibit 21. 222 Exhibit 24. 223 T 3-4 lines 20-27. 64 -- 64 of 118 -- [242] Mr Thompson also accepted that Exhibit 24 was generally consistent with the MEND manual,224 and that it was a relevant reference document, although he was not familiar with it.225 [243] Mr Thompson was asked whether he was familiar with the Rehabilitation Guideline. He said: 226 “I’m passingly familiar with it.” [244] When Mr Thompson was further questioned about his knowledge and expertise, the following exchanges occurred:227 “All right. And you said you’re not particularly familiar with the managing acid and metalliferous drainage document?---No. I’ve seen reference to it, but I’m not familiar with it. And are you particularly familiar with the MEND manual at all?--- I’m aware of its existence. I’m not familiar with it. Are there any mining manuals or guidelines that you are familiar with?---I predominantly rely – not in the mining sector, as we’ve said earlier. There was reference made to the NEPM guidelines, which I’ve used in my report, but the answer to your question is no. So you’re not – all right. So you’re not generally familiar with any mining guidelines or manuals?---That’s true. And you have limited experience in mining rehabilitation?---I have experience. It’s a question [indistinct] limited or not, but that’s a matter I can - - - Well, I suggest it’s limited experience?---Well, I disagree with you. I would disagree with a lack of experience in rehabilitation. And you have no academic qualifications in the area?---That’s correct. All right?--- Sorry. That’s correct. Yes. So if you’re experienced in the area, why aren’t you familiar with the guidelines and manuals?---I’m experienced in rehabilitating – rehabilitation of degraded lands in catchments. I’ve got extensive experience in that. Well, you seem – do I take it from that that you’re saying you’re not qualified to assess the risks?---That’s a very long bow to draw. As I’ve stated earlier, on numerous occasions now, on the data that’s available to me, there’s insufficient evidence there to indicate that these are high-risk structures, high-risk facilities. … All right. And I suggest that part of your duty as an expert is to make reference to any appropriate literature?---That’s correct. Yes. And you didn’t refer to any literature – relevant literature in your first report?---No, I did not. First report, as you will note, is the review of the biophysical aspects of the site and what the implications - - - Well, you deal with the issue of the waste rock dumps and the TSFs and the risks associated with those?---That’s correct. And the – as a consequence of your assessment of the risk, the required rehabilitation treatment?---That’s correct. Yes. 224 T 3-40 lines 44-47. 225 T 3-37 line 36 – T 3-38 line 4. 226 T 2-22 line 15. 227 T 3-41 line 0 – T 3-42 line 5. 65 -- 65 of 118 -- And you haven’t referenced any of the literature?---No. That’s correct. And you’re not familiar with it?---That’s correct. And you didn’t reference NEPM in your first report?---No. I didn’t…” [245] Mr Thompson then gave the following evidence:228 “All right. So you didn’t consider any literature, and you didn’t consider NEPM in your first report?---No. And NEPM was raised, actually, by my counterpart during the JER process.” [246] When Mr Thompson was further questioned about his expertise and knowledge of relevant literature, he confirmed that he was not familiar with any of the mining literature.229 [247] The questioning of Mr Thomspson continued:230 “You have no knowledge of the relevant mining literature – mining rehabilitation literature?---I have limited knowledge of it, yes. I thought you said earlier today that you had no knowledge of it?---That’s not – that’s not what I recall saying. Well, you’re not familiar with any of the manuals or guidelines?---No, not familiar in detail. That’s for sure, yes. So how can you express an expert opinion about the type of covering that should be applied?--- I’m basing it on my experience in the agricultural sector, where there’s a significant amount of land reforming, land reshaping undertaking in some cases to remediate degraded areas; in other cases to develop large-scale irrigation schemes.” [248] As Mr Dillon points out,231 at paragraphs 46 and 47 of his individual report Exhibit 14, Mr Thompson sought to apply his agricultural knowledge and experience to use soil testing criteria relating to Potential Acid Sulphate Soils in a mining context for PAF (potentially acid forming) rock and tailings material.232 [249] When Mr Thompson was asked why he sought to use soil testing criteria rather than criteria identified in mining literature, the following exchange occurred: “All right. Now, paragraph 47, you – well, at 46 you draw on what I suggest is your primary area of expertise, and we delve into the concept of potential acid sulphate soils. I suggest that has just no relevance to this at all?---In terms of the criteria that are used to – you know, potential acid sulphate, which is exposed – if it’s exposed to oxygen, does oxidise, and you get the same type of acid effects you get that they’re talking about here. Well - - -?---PAF and PASS are very, very similar type processes. So it’s not true to say the process itself is irrelevant. It’s a very – it’s an almost identical process. PASS commonly will release – when acidification happens, will release toxic levels of aluminium, for example. 228 T 3-42 lines 24-29. 229 T 3-65 line 12. 230 T 3-72 lines 4-16. 231 Respondent’s submissions, para [156]. 232 Exhibit 14, Thompson report 21.11.2015 at paras [46]-[47]. 66 -- 66 of 118 -- They may both involve oxidisation, but – oxidation, but potential aid [sic] sulphate soils is completely different to potential acid-forming rock. They’re chalk and cheese?---It’s a different environment, that’s correct. And at 47 you say that there are no testing – there aren’t similar testing criteria for PAF materials. I suggest that’s just wrong?---Well, for PASS materials, it’s – in the acid sulphate area or potential acid sulphate, there are set criteria’s for the total – for the amount of total sulphur, the amount of oxidisable sulphur, which are used to determine whether it’s a potential acid sulphate. All I’m saying there is that there’s – I can’t – I’m not aware of – there may well be, but I’m certainly not aware of a similar type of criteria to be applied to PAF. That’s not to say that I don’t – that I dispute that PAF is – I believe PAF is a real thing, but the same level of criteria doesn’t exist as existed in the potential acid sulphate. Well, what about net acid generating tests?---They’re tests, but they’re not criteria. All right. I see. You’re saying criteria. I understand. Right?---Yes. Well, I suggest that there are criteria relating to PAF, and that’s in the manuals and literature relevant to - - -?---I’m not in a position to disagree with that. All right. But you just don’t know, do you, because you’re not familiar with the literature?---That’s correct. And so it’s not appropriate at all, I suggest, to try to relate – and this is in paragraph 48 – acid drainage from soils to PAF?---Paragraph 48 is saying that in the absence of hard data, which is generally agreed to be the case for this project, then the actual presence of acid drainage and the observed effects is – should be an acceptable surrogate for whether the process is happening and producing effects. Well - - -?---That’s what I’m saying in 48. - - - it’s understandable you’d want to draw upon the area of your primary expertise, but you should be referring to the mining literature, shouldn’t you, and taking steps consistent with that, not adopting some other discipline?---I wouldn’t – yeah, I wouldn’t disagree with that.” [250] Further information about the extent of Mr Thompson’s expertise in mining rehabilitation emerged during the course of the resumption of the hearing in September 2016. [251] Mr Thompson has not made any submissions to the State about mining rehabilitation or financial assurance matters in recent times.233 He does not have any contact with the State (which he referred to as the EPA) in terms of mining rehabilitation and financial assurance calculations.234 He has never assisted the State in terms of policy development in the mining rehabilitation sector or to do with financial assurance calculations.235 [252] When Mr Thompson was questioned as to whether there was anything regarding his expertise which he felt hadn’t been summarized,236 he stated that he had a long history in sampling for compliance purposes in Queensland and overseas involving soils and groundwaters.237 He said that he has been involved in providing advice to government and 233 TR 2-56 lines 3-7. 234 TR 2-56 lines 9-13. 235 TR 2-56 lines 15-25. 236 TR 2-57 lines 33-40. 237 TR 2-57 lines 42-45. 67 -- 67 of 118 -- the private sector on a number of resource assessment and appraisal matters and that he was very heavily involved in the assessment of land resources right throughout Queensland for various things such as good quality agricultural land and strategic cropping land.238 [253] Mr Thompson was asked about his experience concerning metalliferous mining and the following exchange occurred:239 “MR DILLON: …Mr Thompson, do you have any experience, in terms of metalliferous mining rehabilitation at all? MR THOMPSON: Excuse me – no. These issues were canvassed in the first, if I can remember rightly, but the answer’s no. MR DILLON: All right. And have you – and I’m not talking about other land forms, I’m specifically asking for these – have you ever designed a TSF cover? MR THOMPSON: No. MR DILLON: Have you ever designed a waste rock dump cover? MR THOMPSON: Yes, as part of the CSG projects that we worked at. MR DILLON: Waste rock dump produced by the CSG; is that what you’re talking about? MR THOMPSON: Yeah, waste materials, including waste rock. Yes. MR DILLON: All right. How many covers have you designed - - - MR THOMPSON: There’s an issue about – we’ve assessed three in recent times, in terms of their efficacy and whether they conform to the EA requirements. MR DILLON: All right. Now, when you say you assessed them, did you design them or did someone else design them, and you assessed them? MR THOMPSON: No, no. We reviewed the design and then we looked at the construction detail, and looked at their performance and made recommendations that had some ongoing implications for compensation under the arrangements under the landholder agreements. MR DILLON: All right. So I thought you said earlier you had designed them. So you’ve never designed, then, a waste rock dump cover? MR THOMPSON: We’ve reviewed the designs of others – yes. We haven’t - - - MR DILLON: All right. MR THOMPSON: - - - designed them ourselves. No. MR DILLON: And – and that’s three waste drop [sic, rock] dumps? MR THOMPSON: Yeah. In recent times. Yes. MR DILLON: All right. And that exclusively in – well, sorry – ever over the entire career you’ve had? 238 TR 2-58 lines 5-13. In my view, Mr Thompson was referring to himself when he used the words “we’ve” and “we’re”. 239 TR 2-61 line 12 – T 2-62 line 25. 68 -- 68 of 118 -- MR THOMPSON: That’s correct. Yes. MR DILLON: Right. So it’s three total. MR THOMPSON: Mmm. MR DILLON: All right. And that was a review process only? MR THOMPSON: It’s a review and assessment and I regard a review is – you do a desk-based review, you see. What – what did they – what were they required to do? What did they do and the assessment process is irrespective of all of that, what does it look like in the field and what sort of data is there around to indicate compliance.”240 Mr Anderson [254] Mr Anderson was called by the respondent to give expert evidence. He prepared a report,241 a further statement of evidence,242 and co-authored with Mr Thompson JER1 and JER2. [255] Mr Anderson is a Director and Principal Scientist of NRA Environmental Consultants (NRA). He holds the following qualifications:243 “• Master of Agricultural Science (Research), Mine Rehabilitation, University of Queensland, 1989; • Bachelor of Agricultural Science (Hons), Land Resources Management, University of Queensland, 1984; and • Company Directors Course Diploma, Australian Institute of Company Directors, 2004” [256] Mr Anderson’s CV also lists the following Expertise and Professional Affiliations: “Expertise: Strategic Environmental Planning, Management & Compliance - Mining, Industrial, Utilities and Land Development Land and Water Resources Management Environmental Assessment, Auditing and Management Systems Professional Environment Institute of Australia Affiliations: Australian Society of Soil Science Australasian Institute of Mining and Metallurgy Barron River Integrated Catchment Management Association Inc. Past member (2000-2008), GBRMPA Local Marine Advisory Committee Past member (2005-2007), G r e a t Barrier Reef Consultative Committee (Ministerial appointment) Register of Ce1tified Auditors, Lead Auditor (Environmental) - Certificate No l3704 Certified Professional in Erosion and Sediment Control - Ce1tificate No 2723 Certified Environn1ental Practitioner - Certificate No. 002.” 240 TR 2-61 line 12 – T 2-62 line 25. 241 Exhibit 11. 242 Exhibit 57. 243 Exhibit 11 CV. 69 -- 69 of 118 -- [257] Perhaps the highest praise of Mr Anderson’s experience comes from Ms McIntyre for Citigold who had this to say:244 “Mr Anderson has a distinguished CV. He articulated his experience on numerous occasions throughout the course of these proceedings but it can be summarized as relating to planning studies, impact assessment, environmental audits, some experience with financial assurance, and implementation of rehabilitation programs, trials and assessment of performance against success criteria. His previous experience as a regulator has arguably influenced his working life and the principles that he continues to apply in practice today.” (footnotes omitted) [258] Despite Ms McIntyre’s praise, there was a sting in the tail:245 “Despite his extensive experience, Mr Anderson appeared reluctant to apply his experience in a sensible way to the task at hand, but rather preferred the position that until full scientific certainty is achieved, then the extent of what he could say was that you had to revert to the high risk options in the calculator.” [259] There is no doubt that Mr Anderson has extensive experience in the mining and resources sector, having worked in the mining rehabilitation sector for the past few decades. When Mr Anderson was asked about his experience in re-examination in December 2015 he responded as follows:246 “…You were asked some questions about your experience?---Yes. How many financial assurance matters have you been involved in over the course of your career?---It would be – it’s hard to assess, but between 50 and 100. A number of those was done as a regulator, but it would be in the order of 50 and 100 which I’ve had some type of involvement in financial assurance.” [260] Mr Anderson continued:247 “All right. And how many years have you been involved in the area of mining rehabilitation?---If I can – if I – I need to write things down for maths because I’m – that’s how my brain works. If I can - - - Yes. In approximate terms?---If I can just go and use – so I graduated in 84 as an [indistinct] scientist. I spent four years as a research – well, two years full time as a research scientist and two years part time as a research scientist, studying Gregory – it’s the first study done on top soil management basically in Australia. So my mining career started as a research scientist. I then worked for a year as an agronomist. Whilst an agronomist, I primarily interpreting soils – soils data for farmers, but during that period I also interpreted data – I recall Mount Isa mines in terms of rehab. And then I entered the Mines Department for two years, and that was – I was called an ecologist at that stage because the state was used to geologists. The field of environmental practitioners really didn’t – wasn’t really there so they called me an ecologist, and I was the first ecologist in North Queensland, and operated in that field during – then Goulburn, and saw the development of mine licence conditions and saw the development of technical guidelines which came out in draft form about ’91, issued in formal draft in ’93 and then formalised in ’95. And then I was around the people who prepared the cyanide guidelines in Queensland, which is a precursor 244 Citigold’s submissions, first part para [424]. 245 Citigold’s submissions, second part para [424]. 246 Citigold’s submissions, second part para [424]. 247 T 6-22 lines 3-11. 70 -- 70 of 118 -- to all the contemporary standards on – like you see in hazardous dam manuals. All the logic behind – well, not all the logic, but the underpinning logic for those guidelines came from the cyanide guidelines, which was drafted by Peter Curley and Phil Carson back in ’91. And then I moved on from the Department and went – and went into consulting, and it was about ’93. And then from ’93 to current I have been immersed in the mine rehab field in Australia, so I’ve worked throughout Queensland on every sector except for uranium, and I’ve worked in Western Australia and Tasmania and then I’ve done work in – in Kaling goldmine in Indonesia, Ok Tedi gold copper mine in – in Ok Tedi, and most of my projects industry – and I’m doing current projects. Most of – my CV shows that I tend to work in projects and remain in the project from – from commissioning through to – through the closure, so I get involved in all aspects of – of environmental management associated with the mining sector across a variety of mineral types. So I don’t know, it must be 27 years or – whatever the maths works out to, that’s – that’s what it is.”248 [261] Mr Anderson also has considerable experience in carrying out due diligence for mining projects. That involves a complete assessment considering all aspects of mine rehabilitation from infrastructure, roads, tailing dams, waste rock dumps and monitoring programs and arriving at a rehabilitation recipe, making sure the purchaser is aware of the liabilities and complexities associated with rehabilitation.249 [262] Although Mr Anderson still conducts field work, his experience and his present role as Director and Principal Consultant of NRA means that he generally acts in a team leader role for the projects he is engaged on.250 [263] Further, Mr Anderson is familiar with relevant mining guidelines and literature, and he made appropriate references to that material in the course of preparing his reports and giving oral evidence.251 [264] In undertaking his work, Mr Anderson routinely undertakes or advises people who are undertaking financial assurance calculations.252 He also routinely deals with EHP and its officers as part of his work,253 and engages with the State in terms of trying to improve the outcomes in the mining sector.254 [265] When Mr Anderson was asked about his experience concerning metalliferous mining rehabilitation, his answer was extensive:255 “Mr Anderson. It’s – I’ve been – I’ve been involved in assessment in designing covers for tailings dams and waste rock dumps in [indistinct] sector and just to assist the – the – the process of designing a cover is a multi-disciplinary cover, so it involves different expertise from different individuals. 248 T 6-23 lines 0-35. 249 T 6-22 lines 23-45. 250 T 4-27 lines 15-47; T 4-32 line 36 – T 4-33 line 5. 251 See, for example, Mr Anderson’s first individual report (Ex 11) footnote 1 p 3, footnotes 6-7 p 7, footnote 10 p 13, footnote 13 p 15, T 6-26 lines 10-20; and Mr Anderson’s second individual report (Ex 57). 252 TR 2-53 lines 20-34. 253 TR 2-50 line 37 – T 2-51 lines 17. 254 TR 2-53 lines 38-39. 255 TR 2-63 lines 10-2 – T 2-64 line 8. 71 -- 71 of 118 -- My role when I was younger was doing looking at trials for red mud at Weipa at Hidalco and doing trials on working out what was growing in red mud which is – which is a by-product of alumina refinery and then moving forward, I’ve been involved in monitoring of rehabilitation dumps at– specifically at the Red Dome Goldmine… And then in terms of moving forward, cover’s a very extensive topic. Cover is – there’s books as large as this, like the GARD guidelines, for example, which deal with the cover topic because it’s a worldwide issue in terms of coming up with rehabilitation covers. My role has been of more recent times, last 10 to 15 years, has been working with other disciplines to try to come up with a cover and rehab outcome which is demonstrably acceptable and that spans – so my input to cover has been at a conceptual level into design phase for engineer to go design on, what’s the net percolation rate we’re going to need, so how much water is going to go through the cover and turn up the toe of the [indistinct] dump the tailings dam, can you please model that and design that so we achieve – we achieve something which mimics natural rainfall if we can. The other aspect of – of speaking to that topic is looking at success criteria for the vegetation component of the outcome so – so what vegetation area are we going to say is acceptable and not acceptable. I certainly provide input for what both in terms of, like, from a grazing aspect and as a nominating dry matter yield or whatever targets you need, moving to the ecological ones with the input from species ecologist, what species – what type of plants are were going to allow to grow there and are those plants going to be acceptable in the short and long term and then moving towards the receiving environment, by providing advice to – to people to say, “Okay. This landform – this modified landform is going to have one-off seepage because all these – all these – as a general rule, all these features leak.” What will be the impact – both the nature of the impact and it’s scale and when will it turn up in the receiving environment … So in terms of answering the question how much input I had to, you know, design of covers, it spans that because it’s not just designing the cover. One does not just look at designing the cover. It’s the whole story. One is defining the problem and the nature and scale of that problem. What – what impact it’s going to have on the receiving environment and then you come back and say, Okay. Based on all this information, what should I do with this landform to satisfy – to – to deal with the issues which I’ve identified downstream and that sums it up. So I don’t design because I’m not an engineer but I have input to the process and that’s – what I’ve just gone through is describing how, you know – what I have done in the past and how I provide that input.” Areas of Agreement of the Experts [266] It is no exaggeration to say that the experts spent a lot of time in the witness box, including four days of concurrent evidence at the rehearing in September, and that that time would have been longer had it not been for the intervention of the Court in limiting the time for questions on distinct topics for both Counsel. [267] In the time available, it is simply impossible to review in this decision all of the evidence of the experts. However, I again stress that I have considered all of the evidence given by both experts. More specifically, my conclusions as to the evidence that I preferred of the experts where they were in disagreement crystalized during the concurrent evidence. I will deal with those conclusions as necessary later in these reasons. [268] For present purposes there are areas of agreement between the experts which are 72 -- 72 of 118 -- essentially non-controversial. In the interests of simplicity and to avoid duplication, I will detail the areas of agreement of the experts from JER2 and the concurrent evidence. JER 2 Report Agreement Areas [269] The Experts agree on the following: (a) The WRD’s are not infrastructure;256 (b) All infrastructure on USL should be decommissioned, removed and the site rehabilitated;257 (c) Active erosion in the stormwater drain below the Black Jack plant / pregnant pond needs to be repaired and maintained;258 (d) Most other built forms of infrastructure appeared as safe and non-polluting as at the time of the JER;259 (e) The following infrastructure items will need to be removed: (i) Power line and sub transformer at the TSF;260 (ii) Fuel storage at Imperial and gas bottles and associated works;261 (iii) Approximately 150 cubic meters of scrap metal currently located at the edge of the old Heap Leach pad area;262 (f) that rainfall, sufficient to promote plant growth, has occurred at the sites since their joint visit reported in the previous JER;263 (g) Pit water sampling undertaken for the JER was limited to the upper surface layer;264 (h) There has been no data provided for determining the quality of the entire water column in the pits;265 (i) There has been no information provided that evaluates the predicted water quality in the pits over time;266 (j) Excluding the TSF seepage areas which are subject to rehabilitation, none of these levels represent a significant risk to the establishment of ground cover on the basis of their soluble metal content or salinity;267 256 JER2 Exhibit 56, para [17]. 257 JER2 Exhibit 56, para [18]. 258 JER2 Exhibit 56, paras [21], [33] and [51]. 259 JER2 Exhibit 56, para [31]. 260 JER2 Exhibit 56, para [32(a)]. 261 JER2 Exhibit 56, para [32(b)]. 262 JER2 Exhibit 56, para [32(c)]. 263 JER2 Exhibit 56, para [44]. 264 JER2 Exhibit 56, para [26]. 265 JER2 Exhibit 56, para [27]. 266 JER2 Exhibit 56, para [28]. 267 JER2 Exhibit 56, paras [37]-[38]. 73 -- 73 of 118 -- (k) The WRD will not produce Acid Mine Drainage (AMD);268 (l) Salinity level of any drainage would be elevated, but the TCLP testing undertaken overestimates the salinity content and it does not give any estimate of the salt load that may be produced at long term steady state conditions;269 (m) TRA agrees with WPT in regard to the relevant salinity data for the WRDs presented in this JER.270 Matters of Agreement during Concurrent Evidence [270] The following are matters upon which the experts agree during the concurrent evidence heard between Tuesday 13 September and Friday 16 September: (a) some of the infrastructure is non-compliant (i.e. not safe, polluting, unstable);271 (b) retaining infrastructure in some instances will be consistent with rehabilitation goals in Queensland;272 (c) the EA nominates the waste rock dumps having a final land use of low intensity grazing;273 (d) the waste rock dumps and TSF pose potential risk;274 (e) the presence of waste rock dumps or tailings storage facilities creates a potential risk;275 (f) the tailings storage facility contains problematic material;276 (g) the TSF needs some form of cover;277 (h) the cover design proposed by Citigold is not something that either expert would have suggested;278 (i) the information presented indicates that acid mine drainage is not evidenced on site;279 (j) Citigold has not carried out any progressive rehabilitation;280 (k) there is a paucity of data demonstrating rehabilitation - in particular vegetation growth on the waste rock dumps - is actually working;281 268 JER2 Exhibit 56, paras [55 c.]-[56 b.]. 269 JER2 Exhibit 56, para [55 i.]. 270 JER2 Exhibit 56, para [45]. 271 TR 3-27. 272 TR 3-37. 273 TR 3-41. 274 TR 3-44/45. 275 TR 3 -45. 276 TR 3-72. 277 TR 5-7. 278 TR 3-74, TR 5-12. 279 TR 3-59. 280 TR 5-86. 281 TR 5-42. 74 -- 74 of 118 -- (l) the assessment of pasture land condition/status involves a series of traverses with quadrant type tests along it;282 (m) traverses with quadrant type tests is one of the tools in the grass model which is used in the mining industry;283 (n) the samples taken from the waste rock dumps do not show a plethora of metals in the results;284 (o) the propositions on page 1 of the MEND – Cover design and construction manual;285 (p) the proposition on the bottom paragraph of page 2 of the MEND – Cover design and construction manual;286 (q) the MEND – Cover design and construction manual is a recognised publication in the mining rehabilitation sector;287 (r) some of the pits require fencing;288 (s) there is not a plethora of metals turning up in the water test results;289 (t) the source of the fluoride in the groundwater is not clear;290 (u) the cost of reshaping the cut face at the waste rock dumps would form part of a contingency sum;291 (v) one needs sufficient experience to design studies, assess what is required, take measurements and characterise the problem;292 (w) the leach pad does not need to form part of the contamination assessment;293 (x) there only needs to be a contaminated land assessment associated with the heap leach pad and pregnant pond;294 (y) predictive studies for aquatic ecosystems have not been carried out;295 (z) fresh water ecosystems require a higher standard of water quality;296 (aa) the 2003 Washington rehabilitation report has limited use.297 [271] There was agreement regarding the propositions contained in Mr Anderson’s further 282 TR 3-43. 283 TR 3-43. 284 TR 3-65. 285 TR 4-70. 286 TR 4-70. 287 TR 4-71. 288 TR 3-31. 289 TR 3-65. 290 TR 3-73. 291 TR 3-27 . 292 TR 3-48. 293 TR 3-30. 294 TR 3-29. 295 TR 3-73. 296 TR 5-62. 297 TR 5-71. 75 -- 75 of 118 -- statement of evidence in paragraphs 27,298 28,299 29,300 32,301 36,302 37,303 38,304 39,305 40,306 41,307 42, and 43,308 45 and 46,309 47 and 48,310 59,311 69,312 72(a)(i),313 93,314 95,315 and 98.316 Submissions Regarding the Expert Evidence [272] The submissions by both Counsel regarding the differences of opinion of the experts are lengthy. For present purposes, I will touch on some of those submissions. My detailed conclusions as to the areas of disagreement of the experts, to the extent that it is necessary to detail same for determination of Financial Assurance purposes, will be set out when I consider each element of the Financial Assurance calculations. [273] Ms McIntyre makes the following submissions regarding the experts: “436. Whilst it is noted that both experts agree that the cover design proposed by Citigold is not something that either expert would do [434(h)], there is no evidence to suggest that it would not work. Indeed, Mr Anderson by his own admission says he has taken a ‘high risk’ approach but acknowledges that there is also a ‘low risk’ approach which he directs the courts attention to. In this respect, Mr Anderson acknowledges that he took the high risk approach to both the TSF and WRD. 437. Both experts agree that the determination of risk impacts on the cover design, but no evidence has been presented to show that the design proposed by either Citigold or Mr Thompson won’t work, nor has there been any evidence that the material in both the TSF and WRD is ‘high risk’. 438. The highest that either expert can put the classification of material is in saying that it is problematic material. This does not mean to say that the material can’t or won’t be managed based on the cover design of Citigold. Accordingly, even if the Court could impose its own Rehabilitation Program, which is denied, there is no good reason for the Court to defer from the Rehabilitation Program proposed by Citigold in this respect. 439. In any event, Mr Anderson failed to review the Rehabilitation Program and assess the merit of it, but rather prepared a completely fresh rehabilitation program. As an expert, there is nothing preventing Mr 298 TR 3-46. 299 TR 3-47. 300 TR 3-48 and TR 3-50. 301 TR 4-3, but some qualification about the photographs taken. 302 TR 4-4. 303 TR 4- 5. 304 TR 4-5. 305 TR 4-5. 306 TR 4-6. 307 TR 4-7. 308 TR 4-9. 309 TR 4-27. 310 TR 4-45. 311 TR 4-66. 312 TR 4-84. 313 TR 5-18. 314 TR 5-70. 315 TR 5-70. 316 TR 5-70. 76 -- 76 of 118 -- Anderson preparing a completely fresh rehabilitation program if that was his instructions, but the Court does not have the power to adopt this program because there is no statutory power to do so.” (footnotes omitted) [274] I have difficulties with Ms McIntyre’s submissions regarding the supposed inability of this Court to “impose its own Rehabilitation Program” as she puts it above. In my view, this submission misses the point of s 295 of the EP Act and the function of this Court in determining this appeal. [275] In determining this matter, I must take into account Guideline 3 and the Calculator, as already discussed. In my view, in order to inform myself to arrive at a correct conclusion consistent with the EP Act, I am also entitled to take into account the exhibits in this matter and the evidence, including the expert evidence. This clearly in my view includes taking into account evidence as to the effectiveness of Citigold’s proposed rehabilitation plan and the likely cost of what needs to be done to rehabilitate the land.317 [276] It is misconceived that this Court can, will or should impose its own Rehabilitation Program. What I will do is weigh the relevant evidence to determine the appropriate amount of Financial Assurance. [277] Mr Dillon made the following submissions regarding the evidence of the experts:318 “174. Mr Thompson: (1) lacks any academic qualifications directly related to mining rehabilitation or metalliferous mining rehabilitation; (2) has little or no experience relating to mining rehabilitation or metalliferous mining rehabilitation; (3) had no knowledge of mining rehabilitation literature, manuals or guidelines in December 2015; and (4) presently has very limited knowledge of mining rehabilitation literature, manuals or guidelines. 175. Ultimately, although Mr Thompson tended to give his evidence confidently and authoritatively, reliance upon it would be inadvisable; Mr Thompson is so unfamiliar with mining rehabilitation that he does not know how much he does not know about the subject. 176. In all of the circumstances, the Court should find that Mr Thompson is not qualified to give expert evidence concerning mining or metalliferous mining rehabilitation generally, or alternatively and at least, that he is not qualified to give expert evidence about the risks associated with the TSF and waste rock dumps, and the rehabilitation requirements of those structures. 317 Guideline 3 of Appendix A, p 24; “The total rehabilitation liability reflects the total potential costs to rehabilitate significantly disturbed land, in a way that will ensure compliance with environmental conditions in the EA”. 318 Respondent’s submissions, paras [174]-[177]. 77 -- 77 of 118 -- 177. If the Court determines that Mr Thompson is capable of giving expert evidence, in general it should be given little or no weight, and the evidence of Mr Anderson should be preferred.” [278] I cannot accept Mr Dillon’s submissions regarding Mr Thompson. I do however agree that he has less experience with respect to the TSF than Mr Anderson. Accordingly, with some limitations which I will further discuss as necessary, I prefer the evidence of Mr Anderson to Mr Thompson regarding the TSF Financial Assurance calculations. [279] However, as regards the other elements of the Financial Assurance Calculations, I was impressed by the wealth of practical knowledge and expertise of Mr Thompson. Therefore, as necessary, it will be a matter of considering the respective evidence of Mr Thompson and Mr Anderson regarding the bulk of the Financial Assurance costings. Thankfully, for many items, Mr Anderson and Mr Thompson are in agreement. However, by way of general comment, apart from the TSF, I generally prefer the evidence of Mr Thompson. One factor which has weighed against Mr Anderson is his heavy reliance on the Precautionary Principle, which I discuss later in these reasons. Key Issue – Inclusion or Exclusion of Infrastructure [280] A substantial amount of evidence has been given during the course of this hearing on the question of infrastructure. Citigold has provided extensive submissions. Despite the amount of material, the positions of both parties has been summarized by Mr Dillon as follows: “66. The Appellant’s position is that the infrastructure contained in the infrastructure agreements and landowner statements, should be excluded from the calculations. This includes infrastructure presently located on unallocated State land which is not subject to any agreement. 67. The Appellant’s alternative position as expressed by Mr Thompson is that some infrastructure items should be excluded from the calculation on the basis that they can be used beneficially for grazing purposes. 68. The Respondent’s position is that: (1) The waste rock dumps and TSF are not infrastructure as that term is used in the environmental authority or the guideline. They should both be included in the financial assurance calculations regardless of whether effect is given to the landowner agreements and statements. (2) Infrastructure on unallocated State land is not subject to any infrastructure agreement or statement at present. Infrastructure located on unallocated State land should be included in the financial assurance calculations. (3) In any event, whether or not there is an agreement or statement or potential agreement or statement, all of the infrastructure (including waste rock dumps and the tailings storage facility if they constitute infrastructure), should be included in the calculations. 78 -- 78 of 118 -- 69. The guideline (whether version 2 or version 3) and in particular, the relevant footnote, does not require that infrastructure be excluded from financial assurances where relevant written agreements are provided. It provides that they may not need to be included in appropriate circumstances. 70. In any event, section 295 simply requires that the Respondent (and on appeal the Court) have regard to relevant regulatory requirements and the prescribed guideline (s 295(3)), and provides that the amount of the financial assurance must not be more than the total of the likely costs and expenses that may be incurred. 71. There are considerable uncertainties and risks to the environment, the State, and subsequent landowners if retention of the infrastructure is permitted without any provision for rehabilitation costs. 72. Further, and alternatively, the landowner agreements and statements are inconsistent with the conditions of the environmental authority, including and in particular condition F1-1. 73 In all the circumstances, it remains appropriate to include all of the contested infrastructure items in the financial assurance calculations.” (footnotes omitted) [281] In my view, the starting point for determining this issue is the EA. In this regard, condition F9-1 provides as follows:319 “Infrastructure (F9-1) All infrastructure, constructed by or for the environmental authority holder during the mining activities including water storage structures, must be removed from the site prior to mining lease surrender, except where agreed in writing by the post mining land owner / holder.” [282] Schedule H of the EA sets out definitions, including a definition of infrastructure as follows: “Infrastructure" means water storage dams, roads and tracks, buildings and other structures built for the purpose of mining activities but does not include other facilities required for the long term management of mining impacts or the protection of potential resources. Such other facilities include dams containing hazardous waste, waste rock dumps, voids, or ore stockpiles and buildings as well as other structures whose ownership can be transferred and which have a residual beneficial use for the next owner of the operational land or the background land owner.” [283] Further, Guideline 3 contains the following note regarding the calculation of Financial Assurance taking infrastructure into account:320 “Note: Some costs may not need to be included for certain suitable infrastructure if the EA holder can provide a written agreement (between the EA holder and the land owner) or a statement (if the EA holder is the underlying landowner) that the infrastructure can remain onsite and can demonstrate that the retention of the infrastructure is consistent with achieving the general rehabilitation goals of a site that is safe to humans and wildlife, non-polluting, and stable. Examples of suitable infrastructure include bores, clean water dams and access roads. This does not negate the need to obtain any other authorisations as required under the EP Act or other legislation.” 319 Exhibit 47 CAT-02, p 15. 320 Exhibit 69, p 24 footnote 6. 79 -- 79 of 118 -- [284] The definition of infrastructure in Guideline 3 is different to the definition in the EA. The definition of infrastructure in Guideline 3 is as follows:321 “Includes built facilities and services associated with the operations of the authorised activities (e.g. processing plants, sewage treatment plants, power plants, camps, offices, power poles, sheds, workshops and other built structures).” [285] There are currently in force two infrastructure agreements. The first is dated 28 January 2016 and is between the landholder being the personal representatives of the Estate of James Lynch and Citigold (the Estate Deed)322 and the second is dated 6 March 2016 and is between the landholder Charters Towers Gold Pty Ltd and Citigold (The Charters Towers Gold Deed).323 Infrastructure agreements with landholders date back as far as 2002 and are set out in Citigold’s submissions.324 [286] Turning first to the Estate deed, the introduction states as follows:325 “E Both parties wish for the Infrastructure on the Land to be transferred by the Authority Holder to the Landowner upon the expiration of the Mining Leases as described in this deed and that the Infrastructure is to be retained by the Landowner after the Mining Leases expire. F The principal intended purpose for which the Landowner will retain the Infrastructure is for use as a Gravel Business (Principal Intended Purpose) and the secondary purpose is Low Intensity Grazing (Secondary Purpose).” [287] Infrastructure is defined on page 2 of the Estate deed: “Infrastructure means the storage dams, roads and tracks, buildings and other structures constructed for or by the Authority Holder for the purpose of the Mining Activities, including (but not limited to) the items described in Schedule 4.” [288] The Estate Deed has a specific clause on infrastructure at pages 3-4. “3. Infrastructure (a) During the terms of the Mining Leases: (i) the Authority Holder may use the Infrastructure in accordance with its usual business needs and In compliance with the relevant laws and the requirements of the Environmental Authority; (ii) the Infrastructure will remain the property of the Authority Holder (including the Infrastructure that is permanently attached to the Land); and (iii) the Authority Holder has all responsibility, liability and obligation in respect of the Infrastructure. (b) From the Infrastructure Transfer Date, the Authority Holder will leave for the Landowner's use or, where relevant, transfer or 321 Exhibit 69, p 20. 322 Exhibit 32 MJL-46. 323 Exhibit 55 MJL-59. 324 Citigold’s submissions, paras [310]-[316]. 325 Exhibit 32 MJC-46, p 1. 80 -- 80 of 118 -- assign to the Landowner, the Infrastructure, and that Infrastructure is to be retained by the Landowner from that time. (c) From the Infrastructure Transfer Date, to the extent permitted by law, the Landowner assumes all responsibility, liability and obligation in respect of the Infrastructure. (d) Upon the Landowner assuming all responsibility, liability and obligation in respect of the Infrastructure, the Landowner releases and discharges the Authority Holder regarding all future responsibility, liability and obligation in respect of the Infrastructure, including any consequential loss arising in relation to or in connection with the Infrastructure. (e) To the extent that any part of the Agreement Area is not owned by the Landowner from the Infrastructure Transfer Date (Unallocated Land), the Landowner warrants to: (i) remove the Infrastructure on the Unallocated Land; (ii) restore the Unallocated Land on which any Infrastructure was located to the relevant final land use description as defined in Schedule F - Table 1of the Environmental Authority. (f) The Authority Holder will provide the Landowner with a draft of any new, amendment or replacement Plan of Operations that the Authority Holder is proposing to give to the Administering Authority at least 30 days prior to such action, and then a copy of the Plan of Operations after it is given to the Administering Authority as soon as reasonably practicable but within S Business Days of it being given.” [289] The Estate Deed sets out on pages 15-16 a description of the specific items of infrastructure: Map zone or area Details Black Jack Entrance gate and associated bitumen road Haul road to rock stockpile a rea Office complex, patios, verandahs, ablution blocks, crib room, air conditioners and all associated pumps, water, sewage and electrical services, potable water tanks Office ca r park Rock stockpile laydown a rea Grizzly and apron feeder Jaw crusher and control room with all associated electrical and water services Cone crusher Screening ng plant and associated conveyors and electrical and plum bi ng services Fine ore bi n and associated conveyors and gantries Lime feed hopper 81 -- 81 of 118 -- Ball mill and associated gantries, walkways, pumps, motors, electrical and plumbing services and support frameworks Cyclones and associated pumps and screens Gravity bowl, associated gravity circuit and shaker table Gold room, electrowinning cells and all associated electrical, gas and water services, including LPG tanks behind off ices 6 vertical liquids tanks 6m x llm and all associated walkways, gantries, concrete foundations, bunds, pi ping and pumps Cyanide mixing and storage tanks and all associated concrete foundations, bunds, pipi ng and pumps Laboratory, associated air-conditioners and laboratory equipment, all associated electrical, gas and water service Bulk fuel storage tanks All site electrical, gas and water services Warehouses and all associated shelving, benches, electrical, gas and water services Workshops and all associated shelving, benches, electrical, gas and water services Caretaker's quarters and all associated a i r-conditioners, electrical, gas and water services, storage sheds, green house, potable water tanks All fire extinguishers, fi re hoses, reels and associated services, alarms and deluge systems Storm water pond for use as stock water storage Black Jack PC, Black Jack South and Newton-Butler water storage da m for use i n business and stock water storage All existing roads, boundary, paddock, and security fences and gates, water drains, surplus soil stockpiles, sediment catchment and retention ponds, silt traps, and other miscellaneous i n f rastructure. Stockholm Whole of site assets and infrastructure including but not limited to below: Rock stockpile laydown a rea Stockholm water storage pit for use in business and stock water storage All existing roads, boundary, paddock and security fences and gates, and any miscellaneous infrastructure and assets Imperial Imperial portal Imperial vent shaft Entrance gate and associated entry road Haul road to rock stockpile a rea Office complex, patios, verandahs, ablution blocks, crib room, air conditioners and all associated pumps, water, sewage and electrical services, potable water tanks All fire extinguishers, fire hoses, reels and associated services, alarms and deluge systems Office ca r park Bulk fuel storage tanks and all associated electrical and water services Workshops and all associated shelving, benches, electrical, gas and water services Rock stockpile laydown a rea 82 -- 82 of 118 -- Washington water storage pit All existing roads, boundary, paddock and security fences and gates, water drains, surplus soil stockpiles, sediment catchment and retention ponds, silt traps, and other miscellaneous infrastructure and assets [290] The Charters Towers Gold Deed also contains important clauses. Firstly, in the introduction,326 the Deed states as follows: “E Both parties wish for the Infrastructure on the Land to be transferred by the Authority Holder to the Landowner upon the expiration of the Mining Leases as described in this deed and that the Infrastructure is to be retained by the Landowner after the Mining Leases expire. F. The Principal Intended Purpose for which the Landowner will retain the Infrastructure is for use as a community mining tourism attraction.” [291] Infrastructure is defined in the Charters Towers Gold Deed on page 2: “Infrastructure means the storage dams, roads and tracks, buildings and other structures constructed for or by the Authority Holder for the purpose of the Mining Activities, including (but not limited to) the items described in Schedule 3.” [292] Schedule 3 provides as follows: “Schedule 3 – Description of specific items of infrastructure (Introduction) Details Central decline and portal Entrance gate and associated fences and bunds All buildings and warehouses Patios Verandas Ablution blocks Crib room All air conditioners and all associated pumps All water, gas, sewage and electrical services Potable water tank Shelving and benches Southwest bund wall of portal compound” [293] To properly put Citigold’s case regarding the Infrastructure Agreements, following are extracts from Ms McIntyre’s submissions:327 “352. It is clear from (F9-1) of the EA that Citigold is authorized to enter into the agreements MJL-46 and MJL- 59. 353. The relevant condition does not indicate that Citigold must be appraised of the use for which the infrastructure proposed to be retained is intended to be used. To the extent that information regarding the purpose for which the infrastructure will be used in the future is included in MJL-46 and MJL-59, the Court ought not concern itself with such matters. 326 Exhibit 55 MJL-9, p 1. 327 Citigold’s submissions, extracts from paras [352]-[380]. 83 -- 83 of 118 -- 354. The Court is not being asked to decide whether or not the future business operations will proceed and indeed, ought not make a decision on this point as it falls outside the parameters of the task at hand. 355. The question then becomes, how the agreements should be treated in light of the decision about the amount of financial assurance… 364. The state of the infrastructure at the time it is handed over under the Infrastructure Agreements is a matter for the parties to the agreement. However, until such time as the Infrastructure Agreements are enlivened, the onus is on Appellant to continue to comply with the conditions of its EA which includes (A2- 1) (b). 365. The position pursued by the Department and those matters listed by Ms Minnesma in respect of these agreements is irrelevant. There are no particular requirements contained in either the prescribed guideline or the EA conditions that specify the content of the agreements … 367. The only matters of concern to the Court in determining whether the Infrastructure Agreements satisfy the requirements of the Environmental Authority, is whether or not the documents: (a) clearly identify the parties; (b) are binding and enforceable; and (c) identify with certainty the relevant infrastructure or services proposed to be retained by the underlying landholder. 368. Once the Court has considered those items at [367], then no further enquiries are required. 369. In respect of the area classified as Unallocated State Land, the Estate has taken steps to acquire this land, including: (a) the return of the executed Agreement to Offer to DNRM; (b) the payment of the purchase price of the land; (b) the return of the executed Form 1 Transfer; and (d) the provision of written advice to DNRM on how the Estate intends to address native title. 370. The transfer is only subject to the provision by the Estate to DNRM of a copy of the registered ILUA. 371. In these circumstances, the Court can be satisfied of those matters identified in [367]. 372. The Respondent has suggested that the Court must look behind the agreements and consider their validity in terms of the intention of the parties. For the reasons outlined above, it is submitted that the Court is not at liberty to do this… 375. Mr Anderson stated that he was uncertain about the interpretation of the infrastructure agreements and the financial assurance around those items. His concerns appear to stem from what he says is a lack of clarity about their use, by whom and how long. Furthermore, he admitted that he was uncertain in terms of the interpretation of the legislative requirements in respect of these agreements. Accordingly, because Mr Anderson lacked understanding as to the task at hand and the interpretation of the documents by which he was to undertake the task, not only did he disregard the agreements, but arguably the prescribed guideline as well. Instead, Mr Anderson has tried to work out an independent rehabilitation approach for the project which is neither something that he was instructed 84 -- 84 of 118 -- to do, nor something that the Court or the department would be at liberty to do. 376. It is submitted that the purpose for which the retained infrastructure will be used post mining has no bearing on: (a) whether or not the parties can enter into an agreement regarding the retention of the infrastructure, or (b) whether or not the infrastructure the subject of the agreements MJL-49 and MJL-59 can be excluded from the calculation of FA. 377. Citigold is entitled to enter into an agreement with the underlying land owner for the retention of infrastructure post mining (F9-1). It has done this. The infrastructure the subject of the agreements are suitable infrastructure and they meet the rehabilitation goals. Accordingly, the cost of rehabilitation of that area occupied by the infrastructure should be excluded from the quantum or financial assurance. 378. At no point in time whether under the EP Act, the EA or either version of the guideline is the Court required to delve into the terms of the contractual arrangement between Citigold and the third party. 379. It is submitted that what is in fact required of the Court is to take the agreements at face value. 380. What the Court must do is determine whether or not an agreement has been validly entered into, it is submitted that this is satisfied. The Court must then determine what infrastructure is the subject of those agreements, this can be undertaken by referring to the schedules to those agreements. The Court ought not then consider the purpose for which the infrastructure is to be retained and used, because ultimately that is a matter outside the requirements of what the Court must do in calculating the amount of financial assurance.” (footnotes omitted) [294] I find some strength in Ms McIntyre’s submissions that all that it is necessary for the Court to do, pursuant to the conditions of the EA, is to satisfy itself that there are in fact valid infrastructure agreements in place between Citigold and the respective landholders. [295] Even if I am wrong in accepting Ms McIntyre’s submissions as set out in the paragraph above, I am satisfied on the evidence presented to the Court that there is a real intention on the part of both Citigold and the landholders for the landholder agreements to take effect regarding infrastructure. [296] As regards the infrastructure agreement contained in the Charters Towers Gold Deed, I am impressed by the evidence of Mr Lynch in particular and all of the evidence in general regarding the plan post mining to use the infrastructure as a community mining tourism attraction. [297] In this regard, it is of importance that the tourism project has received in principle support from the local council. Given the location of Central Mine as shown on the map set out early in these reasons, it is hardly surprising that the local authority would support a tourism attraction relating to mining in a town such as Charter Towers. It is not as if Charters Towers Gold Pty Ltd is proposing a tourist attraction far distant from Charters Towers. Central Mine has its name for a reason; it is located centrally in Charters Towers. 85 -- 85 of 118 -- As is evident from the evidence and was confirmed on the inspection, Charters Towers is an historic mining town and it is no surprise that the local council would wish to further tourism potential of Charters Towers by having a tourist proposal such as that for Central Mine proceed. [298] I should add that I understand why the respondent thought it necessary to in effect look behind the landholder agreement relating to Central to see if the tourism proposal was indeed real or a fiction. The reason for this is clearly because the wording of Guideline 3 relating to the application of infrastructure agreements to financial assurance calculations is written in discretionary terms. [299] To remove any doubt, if, contrary to my view regarding to the proper construction of the EA, it is necessary for the Court to exercise discretion as to whether or not to take an infrastructure agreement into account as envisaged by guideline 3, then in my view the circumstances of the Charters Towers Gold Deed, supported by the evidence in this case, warrant such a discretion being made in favour of Citigold for financial assurance purposes. [300] I now turn to consider the Estate Deed. Just as I was satisfied with the Charters Towers Gold Deed, my views regarding this deed are identical to the conclusions I have reached above as regards compliance with the EA conditions by the Charters Towers Gold Deed, save for the issue of infrastructure on unallocated state land (USL) on Blackjack. I will deal with my views as to USL on Blackjack separately. [301] I have expressed my view with respect to the Estate’s gravel business earlier in these reasons. I am fully satisfied on the evidence before me that the gravel business of the Estate is already in operation and providing financial reward to the Estate. The evidence also indicates, and I accept, that there is potential for the Estate, be it through a related company or entity or otherwise, to ramp up its involvement in the gravel business by actively processing and sorting the gravel itself instead of having that part undertaken by others as at current. [302] To the extent that it is considered necessary for me to exercise a discretion in taking into account Guideline 3 relating to the infrastructure of the Estate relating to the primary purpose of the gravel business and the secondary purpose of low intensity grazing, taking all of the evidence of this matter into account I am satisfied that this is an appropriate case where the Estate Deed should be taken into account as an infrastructure agreement for the purposes of determining the financial assurance payable by Citigold. Blackjack USL [303] I now turn to the question of the infrastructure on USL at Blackjack. I certainly 86 -- 86 of 118 -- acknowledge that the Estate Deed does seek to make binding terms to apply between Citigold and the Estate with respect to the Blackjack infrastructure on USL. There is however an obvious difficulty. [304] As the evidence presented by the respondent makes clear, the purpose of financial assurance is to enable the State to hold sufficient funds to rehabilitate the land in circumstances where, to put it bluntly, Citigold goes out of business or otherwise abandons its mining operations. In those circumstances, the stark reality is that the respondent would be faced with a situation of dealing with an area of USL, should the worst happen to Citigold at the time of making this decision as the policy intent applies, and the respondent would be responsible for the rehabilitation of that USL. [305] Like it or not, and despite the evidence of the advanced stages that have occurred for the purchase of the Blackjack USL, there is nothing in the evidence to show that that purchase has proceeded, due no doubt to the complexity of Native Title ILUA negotiations, and this Court has no idea as to the timeframe in which ILUA negotiations will come to fruition, if ever. [306] Further, in circumstances where the Blackjack USL remains USL and Citigold has abandoned its mining leases, I have severe doubt as to the enforceability of the Estate Deed to allow the Estate to enter into the Blackjack USL and remove the infrastructure. Specifically, it is not this Court’s function to consider the hypotheticals of what or may not be legally enforceable with respect to infrastructure on the Blackjack USL. There are, quite simply, far too many variables. For instance, any mining lease/s on the USL may no longer be in existence, or such mining leases might be in the hands of administrators or liquidators, who could have their own views as to the appropriateness of what was to occur under the Estate Deed and/ or legal enforceability of what was supposed to occur under the Estate Deed. [307] I am not satisfied that the infrastructure on the Blackjack USL should be removed from the financial assurance calculations. However, as I raised with the parties on 27 October, there is a lack of direct evidence as to the dollar amount that applies to the Financial Assurance to for the Blackjack USL. [308] The final positions of the experts as to their opinions of the appropriate amount of Financial Assurance are detailed in exhibit 68. In the main, the experts prepared exhibit 68, and indeed all of their evidence, on the basis of the Infrastructure Agreements applying or not applying. [309] It is possible to discern, via a rather tangled route through the evidence, the identification of some of the Blackjack USL in exhibit 68. Firstly, exhibit 6 page 106 is a map of Blackjack in the Plan of Operations which identifies the boundaries of various Mining 87 -- 87 of 118 -- Leases (ML), including ML 1407, ML 1408 and ML 1409. [310] Exhibit 19328 on page 3 reveals that the underlying tenure of ML 1407, ML 1408 and ML 1409 is USL. Turning back to exhibit 68, items identified by numbers in Mr Dillon’s submissions329 as B4, B5 and B8 make specific reference to ML 1407. Prima facie, therefore it could be expected that those items at least represent Blackjack USL. Exhibit 19 however shows that that is not the case at least as regards B5. B5 in Mr Anderson’s description in exhibit 68 refers to “complete removal of processing plant from ML 1407”. However, exhibit 19, page 2 clearly shows that infrastructure described as “screening plant with feed and return conveyors” and “conveyor to crushed rock storage bin” are both located on ML 1431, which is owned by the Estate. The evidence in this matter leaves me in no doubt that the “processing plant” referred to by Mr Anderson includes the screening plant and conveyors on ML 1431 which is not Blackjack USL. Therefore, B5 in exhibit 68 includes items which are subject to the Estate Deed and therefore should be excluded from the Financial Assurance calculations. [311] As was submitted by Mr Dillon on this issue on 27 October 2016:330 “MR DILLON: Secondly, your Honour was taken to the Plan of Operations, to page 515 using the top-right pagination, which showed the different leases. Now, just to be clear about this, if your Honour looks at that page, your Honour can get quite a good gauge of what’s on State land because ML1407 is unallocated State land, ML1408 is unallocated State land – and your Honour can cross- reference this to exhibit 17 which shows it on a map – and ML1409 is on unallocated State land. So certainly, visually, your Honour can see that it looks like almost all of this infrastructure is on unallocated State land. Secondly - - - HIS HONOUR: Except for that which isn’t. MR DILLON: Well, except for a portion which looks like it’s on ML1431 – yes, your Honour. But that may assist your Honour in terms of working out an approach. Secondly, to the extent – some submissions were made about the – the alleged failures of Mr Anderson. Of course, the appellant hasn’t identified precisely either, so we’re both in the same boat. It’s an unfortunate situation but certainly, the same submission could be made the other way; that if the appellant’s failed to identify which parts and calculate which bits are on and off unallocated State land, your Honour really just has to do the best he can. I mean, you certainly – that’s unfortunate but your Honour ought not just simply exclude things wholesale on the off chance that it might not be on unallocated State land. HIS HONOUR: And I’m sure Ms McIntyre could say “and you shouldn’t just include things on a possibility that they are”. MR DILLON: Well, that’s so, and your Honour will need to do the best you 328 Also known as MJL-17. 329 Items in Exhibit 68 will be referred to by reference to the numbers used by Mr Dillon. 330 TR 7-18 lines 9-28. 88 -- 88 of 118 -- can…” [312] It is a matter of great concern to me that the state of the evidence in this matter, in light of my findings, is such that in an assessment which I have been led to believe should be a precise appraisal using the calculator, is now submitted that all that I can do with respect to the Blackjack USL is the best that I can. [313] Reluctantly, it would seem that I have no option but to agree with Mr Dillon. However, I also agree with Ms McIntyre that it is not a matter of just guessing – the assessment of the Financial Assurance must be based on the evidence. Financial Standing of Citigold [314] A further issue that arises in this matter is whether or not it is relevant for the Court to consider the current financial standing of Citigold. [315] Ms McIntyre in her submissions has this to say:331 “299. The Respondent suggested that the financial returns of the company were relevant for two reasons, the first of which is whether or not some of the infrastructure can transfer under the land owner agreements, and, the second is whether the gravel and tourist businesses are ever likely to materialise. 300. The Respondent submitted that a question for the Court is ‘validity of agreements’ and finances are relevant to ‘whether or not some of that infrastructure can in fact transfer under those agreements’ The Respondent submitted that the agreements are intended to be used to ‘get the liability off the books from Citigold’ – the businesses are at best a ‘pipe dream’ 301 The financial standing of Citigold is not a matter to which the Court ought have regard because: (a) under EM1010, it does not form part of the criteria; and (b) under Exhibit 69, the Respondent has not lead any evidence in respect of same. 302. Whilst it is unclear at this point, the Respondent appears to be suggesting that the financial standing of Citigold is somehow relevant to the calculation of financial assurance, but this is not dealt with in the outline of the respondent. 303. In the alternative, if the Court considers that the financial standing of Citigold is relevant then it is submitted that: (a) the financial assurance hinges on the Rehabilitation Program as a point in time reference, not on the finances of the company; (b) to the extent that the annual financial returns are able to be used, they are only useful in terms of the geological reporting and life of mine; (c) securing development funding for the completion of the expansion of the Citigold Project is ongoing; (d) Citigold has just come out of exploration phase and is looking to 331 Citigold’s submissions, paras [299] – [305]: AR. 89 -- 89 of 118 -- expand and develop their sites; (e) the project is presently on care and maintenance; (f) the value of the company is secured within the 11 million ounce gold reserves subject of the various mining tenements over which the environmental authority is held; (g) Citigold is listed by the ASX as an exploration company that is not in production mode. As an explorer, Mr Lynch states that you would expect to generate no profit. The basis for this response is as follows: And why is that? Because the nature of what you are doing - you’re trying to discover something - essentially like RND. It’s called exploration and development, it’s like RND. You’re waiting to find something, discover something. And then the later stages when you then - that then has to be commercialised. So it’s just a normal part of an exploration company. You raise money, spend money. Raise money, spend money. [TR 9-48] (h) To the extent that the financial standing of Citigold is relevant in any event, Mr Lynch expanded upon the position of a mining explorer in the following terms: You spend, each year as an explorer, depending on the amount of money they raise, will often spend more than what it’s raised during the year or it raises the real expense over time. You don’t have a recurring income. You have to keep raising capital. [TR 9-48 at 25]. …when we go into full production we start to earn a profit. We have own recurring income and then you generate a profit and then you continue to grow the business. So that is the big transition between an explorer and a producer, is that you put in projection and have a recurring income then your day to day is about keeping costs down and keeping revenue up. [TR9-48 at 35]. (i) The value of the company is associated with the mining leases, Mr Lynch’s evidence is that: The mining leases give you the right to the minerals so they have inherently greater value because you’ve got a mining lease usually for a plan specific purpose now or in the future, but it gives you the right to recover the minerals and they’re yours, but you’ve got to pay the government a royalty. [9-51 at 20]. 304. It is submitted that none of the evidence regarding financial liquidity of the company and equity raising has any bearing whatsoever on the quantum of financial assurance nor the way in which calculation of that financial assurance is undertaken. 305. Alternatively, to the extent that the Court considers it is relevant then it goes to the issue of mine development and not some perceived financial instability.” (footnotes omitted) [316] Mr Dillon for the respondent had this to say in his submissions regarding the finances of Citigold:332 “198. Evidence as to the financial position of Citigold and past plans of operation is relevant, because it goes to the issue of whether the 332 Respondent’s submissions, paras [198]-[200] AS. 90 -- 90 of 118 -- agreements are genuine or alternatively whether the proposed uses will realistically ever eventuate. 199. The finances of the Appellant are such that an increase in financial assurance would be objectively likely to cause difficulties for the company, so that there are major incentives to minimise any increase to the greatest extent possible: (1) Mr Lynch and Mr Towsey both accepted that the 2015 Financial Report (Ex 35) was accurate. It is a consolidated statement of the finances of Citigold and its subsidiaries. (2) Citigold has considerable accumulated losses. For the financial year ending 30 June 2015 it suffered an extraordinary impairment of assets of $96,000,000 and had a net operating loss of $7,223,063. (3) Mr Lynch gave evidence that the Appellant has generally operated at a loss since it was incorporated in 1993, and that the company went into receivership for a period of time in 1998. He said that “the mine’s never been fully and properly funded. It’s always been part funded” and that it needed a capital injection to get that “critical mass” and become a “self- sustaining, ongoing business.” (4) Citigold needs major funding to go into full scale commercial gold production, in the order of at least 40 to 50 million, although it is trying to secure in the vicinity of 72 to 85 million. (5) The only freehold land that Citigold and its subsidiaries own has a value of $151,048. This necessarily includes the land which is the subject of the most recent landowner statement (which is owned by a subsidiary of Citigold). (6) The value of the physical plant and equipment held by Citigold (as distinct from the exploration, evaluation and development expenditure and costs) taking into account depreciation is $2,863,459. (7) That figure presumably includes the Black Jack processing plant, which comprises the security to a secured loan of $7,174,445. (8) The only provision presently made for rehabilitation amounts in the 2015 Annual Report is by way of a notation that Citigold has a contingent liability of up to $8.5 million. (9) At the time the 2015 Annual Report was prepared, Citigold had current assets of $1,731,508 and current liabilities of $15,452,269, so that the ability of the consolidated entity to meet its expenditure commitments was dependent upon production and continued capital raising. (10) The Auditors Report included with the 2015 Annual Report notes that the cash flow forecast for the company is dependent upon the generation of sufficient cash flows to be raised from short term funding, capital raising and/or other initiatives to fund its planned activities and be able to meet its liabilities and obligations as and when they fall due. This prompted the ASX to write to Citigold requesting information about whether Citigold had sufficient cash to continue funding its operations. (11) Mr Lynch accepted that Citigold wasn’t conducting any active mining operations at present, that the company did not have big 91 -- 91 of 118 -- cash reserves, and that the only sources of liquidity for the company was through equity raising by share issues, loans and the completion of the major funding transaction. (12) More recently, Citigold has failed to pay the annual fee of $137,060 for its environmental authority, with the consequence that the Respondent has advised that it may take action to suspend the environmental authority. 200. The evidence of Mr Towsey as to the finances of Citigold was generally consistent with the evidence given by Mr Lynch.” (footnotes omitted) [317] In my view, the financial position of Citigold is irrelevant. That is because the whole point of financial assurance is to ensure there are sufficient funds available to the respondent to rehabilitate the land should circumstances arise where the respondent is required to call upon the financial assurance. In other words, in situations where the position of Citigold would be dire to put it mildly. [318] It is my view that s 295 of the EP Act clearly sets out circumstances as to the calculation of an amount of financial assurance to be applied in circumstances where the respondent is required to call upon that financial assurance. It does not set out any form of additional penalty that is to apply for companies or miners that may be “more riskier” than other more “financially stable” companies. The function of the Court is simply to determine the amount of financial assurance required, and no more. [319] A mining company in a seemingly strong financial position may have its fortunes reverse literally overnight for any number of financial or market reasons. Alternatively, a company like Citigold which for all intent and purposes appears to be in a weak financial position may receive the financial backing that Mr Lynch has given evidence about, thus causing its fortunes to quickly turn around. Again, factors such as the unpredictability of the market, and indeed the price of gold, could have a significant impact in that regard. [320] Finally, on this topic, I note Mr Dillon’s submissions regarding an allegation that Citigold is behind on payment of fees to the respondent. The last evidence that the Court received in this regard was that Citigold had been given time by the respondent to make payment of those fees. That extension of time was due to expire many many months ago, yet there was no evidence led by the respondent to indicate that Citigold had not paid its fees as it committed to do. It is trite for Mr Dillon to ask this Court to assume a non-payment of fees when the factual circumstances regarding that matter were known to the respondent at the time of putting together its evidence for the further hearing of this matter in September 2016 and, if the respondent in fact had evidence that fees remained outstanding and considered that fact relevant, the respondent should have put on at least affidavit evidence to that effect before the Court in September. 92 -- 92 of 118 -- Precautionary Principle [321] Citigold submits that the precautionary principle is not applicable to financial assurance calculations made by the respondent (and if necessary the Court) pursuant to s 295 EP Act. [322] The respondent submits that relevant matters such as the precautionary principle can be considered in financial assurance calculations under s 295. Citigold’s Submissions [323] The precautionary principle is included in the EP Act by virtue of the definition of standard criteria in Schedule 4. The definition of standard criteria includes the precautionary principle. Various decision making sections of the EP Act reference a consideration of the standard criteria.333 [324] Importantly s 295 EP Act does not contain a reference to the standard criteria but requires the decision maker to have regard to any relevant regulatory requirements and any criteria stated in a Prescribed Guideline. Citigold submits that there are no relevant regulatory requirements, and no reference to the standard criteria in the Prescribed Guideline (version 3). Hence by virtue of its specific omission, the precautionary principle is not to be considered in terms of financial assurance decision making. [325] Citigold submits that as a matter of fundamental statutory construction, as well as common sense the precautionary principle has no application save for when the EP Act expressly provides for its consideration by reference to the standard criteria. Any other interpretation would have the effect of giving the respondent an unfettered discretion which was clearly not the intention of the legislature when the relevant provisions of the EP Act were drafted.334 [326] In support of its position Citigold also relies upon the decision in Alliance to Save Hinchinbrook Inc v Cook335 where Jones J says: “In the circumstances before me where there is no statutory definition of the precautionary principle and no express obligation to apply any such principle, I take the view that the adoption of the decision-maker of such a principle was likely to result in an additional consideration beyond those authorised by the Regulation and could thus amount to an irrelevant consideration. I find no basis for the suggestion that there was a procedural error because of any failure to apply the precautionary principle.” [327] Citigold submits that in determining financial assurance, the Court should only consider 333 Citigold referred to ss 143, 191, 240-241, 318ZH-318ZI, 337-338 and 359. Other sections referencing the standard criteria for consideration in decision making include 58,175-176, 194 and 715D. 334 Citigold’s submissions at (225). 335 [2006] QSC 84 at [35]. 93 -- 93 of 118 -- known environmental risks, not the unknown. Citigold submits this is consistent with the balance struck in s 295 being the need for sufficient financial assurance, but not more than is required. [328] Citigold submits further that the evidence of the respondent’s expert witness Mr Anderson is fundamentally flawed as he based his evidence on the persistent application of the precautionary principle. Respondent’s Submissions [329] The respondent submits that s 295 EP Act does not prevent the Court from considering other relevant matters such as the precautionary principle. [330] The respondents submits with respect to the “precautionary principle”;336 “(1) Mining rehabilitation literature emphasizes the importance of the principle in circumstances where leading practice in the area is evolving. (2) Application of the principle is consistent with the objects of the EP Act embodied in sections 3 & 4. (3) In any event, the scope of the considerations in the present proceeding involves a consideration of the risk of damage to the environment and the level of scientific certainty concerning the characterization of the risks, and the measures which should be taken to prevent harm. (4) Accordingly, whether or not the precautionary principle applies, from a practical perspective the relevant considerations are substantially the same.” [331] With respect to Citigold’s criticism of Mr Anderson, the respondent contends that the precautionary principle is relevant and in any event the opinions expressed by Mr Anderson and the assessment he has made do not turn on those matters. In particular, matters relevant to the application of the precautionary principle are equally relevant to the prudent assessment of risk.337 Assessment of applicability of Precautionary Principle [332] In determining the appropriate amount of financial assurance, s 295 EP Act provides that I must have regard to any relevant regulatory requirements and any criteria in a Prescribed Guideline. As discussed in this judgment, my fundamental consideration must be directed towards those matters specifically described in s 295. However that does not mean I am bound to only consider those matters in s 295 to the exclusion of other relevant factors. [333] Having said that, Citigold’s submissions are compelling in the sense that the precautionary 336 Respondent’s submissions at (64). 337 Ibid at (381). 94 -- 94 of 118 -- principle is not mentioned as a factor to consider in s 295. I note that there are many sections within the EP Act that provide for the precautionary principle to be considered.338 I can only take from that, that the legislature did not require a consideration of the precautionary principle in financial assurance calculations. [334] The respondent’s submission that the precautionary principle can be considered because it is consistent with the objects of the EP Act as embodied in ss 3 and 4 is not compelling. Just because a principle is consistent with the objects of an Act does not mean that it should be considered in circumstances where the specific section lists other considerations, while the principle has been otherwise enshrined as a consideration in other sections of the Act. I also note the decision in Hinchinbrook where Jones J determined it was not appropriate to consider the precautionary principle in circumstances where there had not been an express statutory obligation to apply it. [335] The precautionary principle applies where there is a serious or irreversible risk of environmental damage and there is a degree of scientific uncertainty about whether the threat exists. It requires a cautious approach to decision making to prevent potential environmental damage, rather than remediate it. It does not on the face of it apply to financial assurance calculations and would appear to be contrary to s 295(4) which limits the amount of financial assurance to no more than is likely to cover the cost of rehabilitation. [336] With respect to Mr Anderson’s evidence, I do not believe it should be disregarded in its entirety simply because he believed he should be following the precautionary principle, though the force of his evidence is weakened somewhat. Certainly his evidence needs to be carefully considered and evaluated (as does all the evidence) before it can be relied upon. In this regard I note the following evidence provided by Citigold’s own witness Mr Towsey in cross-examination;339 “And I suggest that the approach that you’ve really taken is you’ve just guestimated some figures, some areas and then applied the calculator rates for items D72 and D92 to D101?---We’ve allowed reasonable estimates. For example, in D76, we actually have no evidence of hydrocarbon contamination in the soil. So under the precautionary principle, I’ve allowed an amount in there in case we later found some or some had occurred between the time of the plan of operations and when the site was up for remediation.” [337] As a prudent decision maker I have to weigh all the evidence and while not taking a cautious approach in line with the precautionary principle, I am taking a careful and considered approach to the task. I have carefully examined and weighed all the relevant evidence. 338 See sections listed in footnote 1. 339 T 11-15 lines 13-19. 95 -- 95 of 118 -- Objections [338] Both Citigold and the respondent made submissions about outstanding issues of objection. I accept all submissions which indicate that all substantive matters of objection were dealt with during the hearing. Calculating the Financial Assurance Payable by Citigold [339] I now turn to the primary task required of me by this appeal, which is to determine the amount and manner of Financial Assurance required from Citigold pursuant to s 295 of the EP Act for the Citigold Mining Project. [340] What I intend to do is set out an extract of each item from exhibit 68 (the whole document being too large to incorporate into this decision) and to identify the dollar amount of Financial Assurance that I determine appropriate for each item, together with brief reasons for each item. [341] However, before turning to those calculations, there are some general observations and findings that I should make. TSF High Risk or Low Risk [342] As already indicated, I prefer the evidence of Mr Anderson with respect to the TSF, but with one reservation. Mr Anderson has assessed the TSF as “High Risk” in part, I am sure, because of his reliance on the Precautionary Principle. [343] Taking all of the TSF evidence into account, I do not consider that a “High Risk” assessment for the TSF as appropriate. Nor, however, do I consider the “Low Risk” approach of Mr Thompson appropriate. Unfortunately, “High Risk” and “Low Risk” are the only two options given by the calculator.340 As both experts indicated during their concurrent evidence (talking in general terms) there are circumstances when a “Medium Risk” assessment may be appropriate. I agree. [344] Specifically with respect to areas of disagreement regarding the TSF, I intend to depart from the calculator and apply a “Medium Risk” assessment to the TSF. Adopting a considered approach, and given the extreme disparity between Mr Anderson’s TSF amounts and Mr Thompson’s TSF amounts, this is not in my view a matter where the differences can be simply ‘split down the middle’. Doing the best I can to ensure that the proper amount, and no more, is assessed for the TSF, I have decided to reduce Mr Anderson’s TSF dollar amounts by 20%, which results in amounts for the TSF significantly higher than those contended for by Mr Thompson. WRD High Risk or Low Risk 340 Exhibit 70. 96 -- 96 of 118 -- [345] As regards the evidence with respect to the WRD’s, taking all the evidence into account; preferring the evidence of Mr Thompson; and finding the assessment of Mr Anderson too high in light of his Precautionary Principle approach, I consider the appropriate assessment for the WRD’s to be “Low Risk”. Accordingly, unless otherwise indicated, my assessment will adopt Mr Thompson’s assessments regarding the WRD’s. Contingency [346] Mr Dillon submits341 that, although a contingency amount is not expressly provided for in the financial assurance guideline or calculator, a contingency amount is appropriate because both Mr Anderson and Mr Thompson hold the opinion that a contingency amount of 10% should be included in the calculations.342 [347] It is noted that the position of the experts did not change in the subsequent hearing in September 2016. [348] Ms Minnesma agreed that a contingency amount should be applied and it would be valuable to do so,343 because in her experience people potentially use quotes or underestimates or there might be areas that are not fully covered, so that in her opinion, a contingency as proposed by the experts was a good idea.344 [349] Mr Dillon submits that a contingency amount of 10% should be included to cover items which may have been missed or underestimated in preparing the plan of operations or financial assurance calculations, and otherwise to cover any unforeseen or unexpected rehabilitation costs which may arise. [350] Ms McIntyre submits345 that it is not appropriate that a contingency amount as contended for by the experts and the respondent should apply. For the reasons that follow, I agree. [351] As is noted by the experts in the JER1, the question of whether a contingency amount should be applied is one for the Court and not for the experts: “40. The FA amounts in this JER do not include any allowance for a contingency amount as we believe that this is a decision for the Court.” [352] In my view, to provide a “contingency amount” would be contrary to the EP Act which is about the provision of an amount not more than “the total likely costs and expenses”346 that may be incurred taking action to rehabilitate or restore and protect the environment because of environmental harm that may be caused by resource activity. [353] The use of the expression “total likely costs and expenses” is diametrically opposed 341 Respondent’s submissions, paras [371]-[374]. 342 Exhibit 11, First individual Anderson Report at [104]-[105]; Exhibit 13 JER at [38]-[39]; Thompson at T 2- 46 lines 23-43 and T3-55 lines 10-45. 343 T 9-99 lines 37-44. 344 T 9-100 lines 15-20. 345 Citigold’s submissions, paras [208], [505]-[520] and Citigold Reply Submissions, paras [45]-[46]. 346 Section 295(4) of the EP Act. 97 -- 97 of 118 -- to the inclusion of a “contingency amount”, being an amount for unknown costs. [354] This construction is also confirmed by the inclusion of subsection (4) itself (i.e. a legislative cap on financial assurance) and the exclusion of the standard criteria, which include the precautionary principle, from the matters which regard must be had in making a decision under s 295(3). [355] Further, the inclusion of the legislative cap in s 295(4) clearly seeks to strike a balance between: (a) the need for security to be given for compliance with an environmental authority and the likely costs or expenses in taking action to rehabilitate or restore and protect the environment because of environmental harm caused by the activity for which the authority was granted; and (b) the negative impact the provision of these likely costs and expenses to the respondent, a significant investment, will have on the cash flow needs during the course of the project. [356] The balance is struck by the respondent only being able to claim the likely costs and expenses, for which there is an evidential basis (such as from a compliance inspection, annual return, environmental audit or other mechanism the respondent can require to be undertaken by an environmental authority holder), and not any additional amount for unknown costs and expenses. [357] The purposive construction enjoined by s 14A of the Acts Interpretation Act 1954 does not warrant the redrafting of the financial assurance provisions. [358] In Trevisan v FCT347 Burchett J observed at 31, speaking in relation to s 15AA of the EP Acts Interpretation Act 1901 (Cth), the equivalent provision to s 14A, that: “Section 15 aa requires a court to prefer one construction to another. Such a requirement can only have meaning where two constructions are otherwise open. The section is not a warrant for redrafting legislation nearer to an assumed desire of the legislature. It is not for the courts to legislate; a meaning, though illuminated by the statutory injunction to promote the purpose or object underlying the EP Act, must be found in the words of Parliament. As Bowen CJ said in Re News Corporation Ltd (1987) 70 ALR 419 at 428: A[n]… important rule in this context is that embodied in s 15aa of the EP Acts Interpretation Act 1901 requiring the Court to lean towards the construction that will promote the purpose of the EP Act. In the end the task of the Court is to ascertain and to enforce the EP Actual commands of the legislature: Scott v Cawsey (1907) 5 CLR 132 at 155. This will best be achieved by studying the words used and the context and the purpose or object underlying the EP Act. To similar effect, Fitzgerald J said in FCT v Trustees of Lisa Marie Walsh Trust (1983) 48 ALR 253 at 278: “… even if the extrinsic material does reveal the legislative purpose, there will continue to be boundaries beyond which the words used will not stretch even where it is known that they were intended to do so.” See 347 (1991) 101 ALR 26 at 31. 98 -- 98 of 118 -- also Repatriation Commission v Kohn (1989) 87 ALR 511 at 523-4, citing Cooper Brookes (Wollongong) Pty Ltd v FCT (1981) 147 CLR 297 at 304 ; 35 ALR 151. I do not think I can support the tribunal's approach in this matter. It did not “stretch” the language, to use the metaphor of Fitzgerald J; it found the language inelastic, and threw it away upon the footing that a decision contrary to it would be in keeping with what the tribunal thought to be the legislative purpose.” [359] Even though the exclusion of a contingency amount is clear on the face of the EP Act, the Financial Assurance Guideline confirms this by its exclusion of such an amount in the criteria for calculating financial assurance in Part 1 of Appendix 1, the Approved calculation method. The criteria only refer to costs and expenses which are incurred as a matter of course in any rehabilitation of a mining project, including: (a) project management; and (b) maintenance and monitoring. [360] The costs and expenses of carrying out these activities are necessary costs and expenses that are incurred during rehabilitation. Whilst project management and maintenance and monitoring are described as contingencies in the Financial Assurance Calculator and may properly be included in the Financial Assurance Calculations, they are clearly different to the imposition of an arbitrary amount for unknown costs and expenses that may not be incurred. [361] In my view, the inclusion of a “contingency amount” falls outside the scope and purpose of requiring financial assurance to be given for an EA. Financial Assurance Calculations Using Exhibit 68 [362] On the pages that follow is part of the table taken from Exhibit 68, incorporating Mr Dillon’s item numbers, and also including the description about excluding the other columns, and including a column showing my determination with short reasons for each item. [363] Although I have excluded many columns in exhibit 68 in what follows, that has been done for practical typing and reproduction purposes only. To be completely clear, what follows should be read incorporating the full detail of Exhibit 68. REF DESCRIPTION DETERMINATION C1 Disconnect and terminate all services (water, electricity, gas etc at point of attachment to site) $0 As per WPT1 C2 Disconnect and terminate services at remote areas (pump stations, remote workshops, sewage treatment plant etc) $10,000 Some rehabilitation on USL. Unable to be more specific. C3 Removal of low/medium voltage powerlines, including disconnection, rolling up the wires and removing the poles. $3,750 Same reasoning as C2 C4 Demolish and removal small buildings $20,000 99 -- 99 of 118 -- (camps, administration buildings, accommodation, bath house etc) Removal of Buildings on USL C5 Demolish and remove industrial buildings (workshops, tyre change and servicing area etc – not CHPP) $0 Expert agreed amount C6 Remove concrete pads and footings (<0.3m thickness) and dumping in voicd $4,000 Same basis as C4 C7 Remove fence (cyclone / wire fence) $0 Expert agreed amount C8 Removal and off-site treatment of hydrocarbon contaminated water from worskshops, bunded areas and sumps. $700 Expert agreed amount C9 Undertake Phase 1 contamination assessment – assumes potential contamination is localized. If there are multiple work areas on site, additional studies should be included. $15,000 Expert agreed amount C10 Onsite remediation of hydrocarbon contaminated soils manual land farming $0 Expert agreed amount C11 Remove material (carbonaceous / metalliferous spillage or otherwise) from footprint of the process facility (leach pads) / stockpile area (ROM product) / roads and dump in a void on-site (haul distance <1km) $0 Expert agreed amount C12 Bulk earthworks / structural works $0 Expert agreed amount C13 Trim, rock rake & deep rip (includes levelling / landscaping and rip in 1 direction) $2,400 Same as C2 C14 Source, cart and spread topsoil (@0.2m) (<1km) $9,000 Same as C2 C15 Direct seeding / fertilizer (pasture grass species) $3,000 Same as C2 C16 Seal portals / adits (width >2m) – backfill the adit for at least 50m against a concrete bulk head with drainage slots. If concrete bulk head not required, reduce rate by 25%. $0 Infrastructure agreement C17 Seal and rehabilitation ventilation fan shafts $300,000 Expert agreed amount C18 Maintenance and monitoring of sealed adits / portals and shafts (5 years) $50,000 Infrastructure agreement C19 Bore holes – cap and seal open bore holes ~ 0.05 – 0.2m, backfill with cuttings $0 Expert agreed amount C20 Demolition and removal of vent fans, electrical substation and winch. $50,000 Expert agreed amount TOTAL FOR CENTRAL $467,850 REF DESCRIPTION DETERMINATION B1 Disconnect and terminate all services $0 100 -- 100 of 118 -- (Water, electricity, gas etc at point of attachment to site) As per WPT1 B2 Removal of low / medium voltage powerlines including disconnection, rolling up the wires and removing the poles – does not include the removal of substations. $6,000 As per WPT1 B3 Demolish and remove small buildings (camps, administration buildings, accommodation, bath house etc.) $0 Infrastructure agreement. No direct evidence on USL. B4 Demolish and remove industrial buildings (workshops, tyre change and servicing area etc – not CHPP) $211,200 On Blackjack USL. B5 Demolish and remove processing equipment (i.e., washery, crushers, mills, furnaces, agglomeration, electrowinning, floatation, sizing stations, rotary breakers etc) – include the area of each floor of the structure. $530,000 On assumption of 80% on Blackjack USL. B6 Remove small underground pipe - ~ 300mm pipes $0 Infrastructure agreement. No direct evidence on USL. B7 Remove concrete pads & footings (<0.3 m thickness and dumping in void) $0 Infrastructure agreement. No direct evidence on USL. B8 Remove concrete pads & footings (>0.3 m thickness) and dumping in void $130,000 Same as B5 B9 Remove fence (cyclone / wire fence) $0 Expert agreed amount B10 Remove and off-site treatment of hydrocarbon contaminated water from workshops, bunded areas and sumps. $700 Expert agreed amount. B11 Undertake Phase 1 contamination assessment – assumes potential contamination is localized. If there are multiple work areas on site, additional studies should be included. $15,000 Expert agreed amount. B12 Onsite remediation of hydrocarbon contaminated soils – manual land farming $2,750 Expert Agreed Amount B13 Remove material (carbonaceous / metalliferous spillage or otherwise) from footprint of the process facility (leach pads) / stockpile area (ROM product) / roads and dump in a void on-site (haul distance <I km) $78,000 As per TRA B14 Major bulk pushing to achieve grades, nominated in the approval / permit <50m push length. $26,800 Same as B5 B15 Fill dams, voids etc – source local material, cart and spread to cap or backfill, cap thickness determined by approval / permit (haul distance <1km) $80,000 Most parts of runoff control to remain for beneficial use. Balance was $100,000 as part of TSF with 20% 101 -- 101 of 118 -- discount for medium risk. B16 Trim, rock rake & deep rip (includes levelling / landscaping and rip in 1 direction) $0 Infrastructure agreement B17 Deep rip hard stand / lay down areas (including ripping in 2 directions) $2,880 As per TRA B18 Source, cart and spread topsoil (@0.2m)(<1km) $13,600 As per WPT1 B19 Direct seeding / fertilizer (pasture grass species) $2,480 As per WPT1 B20 Construct standard stock fence around rehabilitated areas $0 Expert agreed amount. B21 Reshaping, capping / sealing of high risk material presenting environmental difficulties (ARD / AMD / PAF, carbonaceous, saline material etc) $1,904,000 As per TRA for TSF with 20% reduction for medium risk B22 Materials for reshaping, capping / sealing of high risk material presenting environmental difficulties (ARD / AMD / PAF, carbonaceous, saline material etc) $0 As per TRA. B23 Trim, rock rake & deep rip (includes levelling / landscaping and rip in 1 direction) $13,440 As per TRA for TSF with 20% reduction for medium risk B24 Source, cart and spread topsoil (@0.2m) haul distance <1km $95,200 As per TRA for TSF with 20% reduction for medium risk B25 Direct seeding / fertilizer (pasture grass species) $42,700 As per WPT1 B26 Construct standard stock fence around rehabilitated areas $22,000 As per WPT1 B27 Maintenance of established rehabilitated areas. $0 As per TRA. B28 Reshaping, capping / sealing of high risk material presenting environmental difficulties (ARD / AMD . PAF, carbonaceous, saline material etc) $0 Low risk stable material B29 Materials for reshaping, capping / sealing of low risk material presenting environmental difficulties (ARD / AMD / PAF, carbonaceous, saline material etc) $0 Low risk stable material requiring topsoil. Not infrastructure B30 Source, cart and spread topsoil (@0.2m) haul distance <1km $62,500 Low risk stable material requiring topsoil. Not infrastructure B31 Trim, rock rake & deep (includes levelling / landscaping and rip in 1 direction) $4,416 Oldest dumps already seeded and planted – allow 50% of TRA and WPT2 B32 Direct seeding / fertilizer (pasture grass species) $5,704 Oldest dumps already 102 -- 102 of 118 -- seeded and planted – allow 50% of TRA and WPT2 B33 Construct standard stock fence around rehabilitated areas. $0 Expert agreed amount. B34 Clean water dams / sediment control structures to be retained after closure – make safe and minor earthworks. $0 Expert agreed amount. B35 Removal and disposal of plastic liner (i.e. dam, leach pad etc) $2,500 Expert agreed amount B36 Remove 2 x concrete tanks and 1 x plastic tank. $0 Expert agreed amount B37 Undertake Phase 1 contamination assessment – assumes potential contamination is localized. If there are multiple work areas on site, additional studies should be included. $15,000 As per TRA B38 Remove sediments from the floor of the dam to enable it to be converted into clean water structure (haul distance >1km but <2km). $19,500 Expert agreed amount B39 General reshaping and pushing / trimming to achieve final landform design $7,800 Expert agreed amount B40 Source, cart and spread topsoil (@0.2m) haul distance <1km $0 Expert agreed amount B41 Direct seeding / fertiliser (pasture grass species) $2,480 Expert agreed amount B42 Highwall treatment – trench and safety berm construction $200,000 Safety berm except for ramps. Considered approach to ensure made safe. B43 Purchase and erect warning signs $6,250 Expert agreed amount B44 Security fence around steep section of high wall. $28,160 As per WPT1 TOTAL FOR BLACKJACK $3,531,060 REF DESCRIPTION DETERMINATION I1 Disconnect and terminate all services (Water, electricity, gas etc at point of attachment to site) $0 As per WPT1 I2 Removal of low / medium voltage powerlines including disconnection, rolling up the wires and removing the polies – does not include the removal of substations $0 As per WPT1 I3 Demolish and remove small buildings (camps, administration buildings, accommodation, bath house etc) $0 Infrastructure agreement. I4 Demolish and remove industrial buildings (workshops, tyre change and servicing area etc – not CHPP) $0 Infrastructure agreement I5 Remove small underground pipe – $0 103 -- 103 of 118 -- 300mm pipes Infrastructure agreement. I6 Remove concrete pads and footings (<0.3 m thickness) and dumping in void. $0 Infrastructure agreement. I8 Remove fence (cyclone / wire fence) $0 Agreed amount I9 Unsealed roads / vehicle park-up areas – Minor earthworks, final trim and deep rip (pasture grass) $0 Infrastructure agreement I10 Undertake Phase 1 contamination assessment – assumes potential contamination is localized. If there are multiple work areas on site, additional studies should be included. $15,000 Expert agreed amount 111 Removal and off site treatment of hydrocarbon contaminated water from workshops, bunded areas and sumps $700 Expert agreed amount. I12 Remove material (carbonaceous / metalliferous spillage or otherwise from footprint of the process facility (leach pads) / stockpile area (ROM product) / roads and dump in a void on-site (haul distance (<1km) $3,900 Expert agreed amount I13 Onsite remediation of hydrocarbon contaminated soils (<50m3) – manual land farming. $2,750 Expert agreed amount I14 Fill dams, voids, etc – source local material, cart and spread to cap or backfill, cap thickness determined by approval / permit (haul distance <1km) $0 As per WPT1 I15 Trim, rock rake & deep rip (includes levelling / landscaping and rip in 1 direction) $0 As per WPT1 I16 Source, cart and spread topsoil (@0.2m) (<1km) $0 Expert agreed amount I17 Direct seeding / fertilizer (pasture grass species) $0 As per WPT1 I18 Seal portals / adits (width >2m) – backfill the adit for at least 50m against a concrete bulk head with drainage slots. If concrete bulk head not required, reduce rate by 25%. $250,000 Expert agreed amount I20 Seal and rehabilitate ventilation fan shafts $150,000 Expert agreed amount I21 Maintenance and monitoring of sealed adits / portals and shafts (5 years) $50,000 Expert agreed amount I22 Bore holes – cap and seal open bore holes ~ 0.05 – 0.2m, backfill with cuttings $0 Expert agreed amount I23 Demolition and removal of vent fans, electrical substation and winch. $25,000 Expert agreed amount 124 Reshaping, capping / sealing of high risk material presenting environmental difficulties (ARD / AMD / PAF, $0 Low risk stable material 104 -- 104 of 118 -- carbonaceous, saline material etc) I25 Materials for reshaping, capping / sealing of low risk material presenting environmental difficulties (ARD / AMD / PAF, carbonaceous, saline material etc) $0 Expert agreed amount. I26 Source, cart and spread topsoil (@0.2m) haul distance <1km $32,773 Low risk stable material requiring topsoil I27 Trim, rock rake & deep (includes levelling / landscaping and rip in 1 direction) $11,232 Required for rehabilitation as per TRA. Not infrastructure. I28 Direct seeding / fertilizer (pasture grass species) $14,508 Seeding and planting required. Not infrastructure. I29 Construct standard stock fence around rehabilitated areas. $0 Expert agreed amount. I30 Clean water dams / sediment control structures to be retained after closure – make safe and minor earthworks. $0 Expert agreed amount. I31 Highwall treatment – trench and safety berm construction $63,000 Expert agreed amount I32 Purchase and erect warning signs $1,750 Expert agreed amount I33 Security fence around steep section of high wall $38,500 Expert agreed amount. I34 Bore holes – cap and seal open bore holes ~ 0.05 – 0.2 m, backfill with cuttings. $10,500 Citigold amount TOTAL FOR IMPERIAL $669,613 TOTALS CENTRAL $467,850 BLACKJACK $3,531,060 IMPERIAL $669,613 TOTAL SITES $4,668,523 Project Management 10% $466,852 Maintenance and Monitoring $233,426 Contingency $0 Total Financial Assurance $5,368,801 Determination [364] In accordance with the above, I determine the total amount of Financial Assurance payable by Citigold for the Citigold Project in the sum of $5,368,801. [365] Accordingly, the appeal is allowed. [366] The form of Financial Assurance is, as I understand it from Counsel’s Submissions, agreed to be in the form of a bank guarantee from an approved financial institution. 105 -- 105 of 118 -- ORDERS: 1. The Appeal is allowed and the decision of the respondent is set aside. 2. The Financial Assurance is determined in the sum of Five Million, Three Hundred and Sixty-Eight Thousand, Eight Hundred and One Dollars ($5,368,801). 3. The form of the Financial Assurance is a Bank Guarantee from an approved financial institution. PA SMITH MEMBER OF THE LAND COURT 106 -- 106 of 118 -- Appendix A – Glossary Term Definition Exhibit Acid A measure of hydrogen ion (H+) concentration; generally expressed as pH. Acid is not equivalent to acidity (see definition below). 24 Acid base account/acid base accounting (ABA) An Acid Base Account (ABA) evaluates the balance between acid generation processes (oxidation of sulphide minerals) and acid neutralising processes. It can involve determination of the maximum potential acidity (APP) and the inherent acid neutralising capacity (ANC), both defined below. A series of chemical analyses and calculated values (Chapter 14) used to estimate the magnitude of the acid generation potential (AP, Chapter 12) and acid neutralization potential (NP, Chapter 13) of a sample and its present and potential future net drainage pH. ABA includes the most common static tests used in the prediction of acid rock drainage. Uses of ABA data include: 1) an initial coarse estimation of the present and potential future net drainage pH; 2) part of the information used in a more refined, site specific prediction of the present and potential future net drainage pH; and 3) operational characterization of the present and potential future net drainage pH of excavated material and exposed surfaces, based on refined, site 24 21 specific prediction in 2 above. Kinetic tests, mineral identification and detailed elemental analysis are required for more refined, site- specific prediction. Accurate prediction of the potential future net drainage pH from the ABA data requires an understanding of the analytical procedures, the future physical and geochemical conditions, external inputs and the identity, location and reactivity of the contributing minerals. The analytical procedures, the number of tests and the interpretation of the analytical data should all be clearly identified since there is considerable variation in sample preparation. See also acid generation, neutralization potential and static NP procedures. 107 -- 107 of 118 -- Term Definition Exhibit Acid drainage Drainage characterised by low pH, and typically elevated toxic element concentrations, high sulfate concentrations and high salinity. 24 Acid(ic) In geology, a chemical classification of igneous rocks. Containing more than 66% silica. In chemistry, having a pH <7. 54 Acidity A measure of hydrogen ion (H+) concentration and mineral (latent) acidity; generally expressed as mg/L CaCO3 equivalent. Measured by titration in a laboratory or estimated from pH and water quality data. 24 Acidity load The product of acidity and flow rate, generally expressed as mass CaCO3 equivalent per unit time. 24 Acidity load balance The acidity load balance for a mine site takes into account water volumes and flow rates as well as acidity (see definition above), and incorporates all mine facilities that are potential sources of AMD, for example, waste rock piles, ore stockpiles, tailings storage facilities, pits, underground workings, heap leach piles and mine construction materials. 24 Aeromagnetics Airborne geophysical survey measuring variations in the Earth’s magnetic field 54 Ag Silver 54 Alkalinity A measure of the capacity of a solution to neutralise an acid. 24 AMD Can mean either Acid and Metalliferous Drainage or Acid Mine Drainage (also known as Acid Rock Drainage) 21 & 24 Acid Rock Drainage (ARD) Acidic pH drainage derived from materials with an insufficient capacity to neutralize the acidic products of sulphide and elemental sulphur oxidation and the dissolution products of acidic minerals and morphous materials. ARD is produced when the NP is no longer capable of maintaining neutral pH conditions in a measurable volume of drainage. In the context of mining, may be referred to as acid mine drainage (AMD). 21 Assay Chemical analysis. Strictly refers to analysis of precious metals by the fire assay method with gravimetric finish. Commonly used to mean any chemical analysis 54 108 -- 108 of 118 -- Term Definition Exhibit Au Gold 54 base metal Generally a metal inferior in value to the precious metals, mainly copper, lead, zinc, nickel, tin and aluminium. 54 batholith A large mass of consolidated intrusive igneous material (usually of granitic composition) (see also pluton). 54 Bed-rock Solid rock underlying soil, alluvium etc. 54 Blending In the context of sulphidic drainage chemistry, mitigation blending refers to the code position of potentially net acid (PAG) and net neutral mine wastes (Non-PAG). The objective in blending is generally to create a composite material in which the acid produced by the PAG waste material is neutralized by Non- PAG materials, with a consequent precipitation of the majority of the released metals as secondary minerals. 21 Block model A three-dimensional model of the distribution of ore and waste materials with different geochemical properties (metalliferous mines). Also see ‘grid/layer model’. 24 breakeven In ore reserve estimation, the gold grade at which the mining cost equals the value of the extractable gold. At breakeven grades, the operation makes neither a profit nor a loss. 54 Breakeven can be calculated at various cost levels, such as an operating breakeven (the grade required to continue operations) or total cost breakeven (which takes into account overheads such as depreciation, mineralized109, cost of capital, off- site overheads, interest, tax etc). decline Usually refers to a downward sloping underground roadway. 54 density Mass divided by volume. Measured here in tonnes per cubic metre. 54 diamond drilling Method of obtaining a cylindrical core of rock by drilling with a diamond impregnated bit. 54 drainage chemistry The concentrations of dissolved components in drainage, including element concentrations, chemical species and other aqueous chemical parameters. 21 fault A fracture in rocks along which rocks on one side have been moved relative to the rocks on the other. 54 109 -- 109 of 118 -- Term Definition Exhibit Fracture A break in the rock. 54 g/t grams per tonne (grams/tonne) 54 Galena lead sulphide mineral, an ore of lead 54 Gangue Waste minerals associated with ore. 54 Geophysical The exploration of an area in which physical properties (e.g resistivity, conductivity, magnetic properties) unique to the rocks in the area are quantitatively measured by one or more methods. 54 Geostatistics Mineral resource estimation method. A computer based method wherein particular relationships between sample points are established and employed to project the influence of the sample points. Based on the application of statistics to the variation in grade of ore bodies. 54 granite, granitic Coarse grained igneous rock composed of quartz and feldspar with varying amounts of ferromagnesium minerals such as biotite or hornblende, with or without muscovite. Adjective is ‘granitic’. 54 Granitoid Field term for body of rock of granitic composition. 54 Heap Leach An extraction process in which stockpiled ore is leached to remove target metals. Leaching solutions, generally weak acids or alkaline cyanide, are percolated through heaps of ore. Leachate is collected and metals contained in the leachate are extracted chemically or electrochemically. Typically, the particle size of the ore to be leached is reduced to increase surface exposure of metal containing minerals. Despite the reduced particle size, after leaching ceases, the heap typically has many properties in common with a waste rock dump. 21 in situ Term used to describe rocks and minerals found in their original position of formation. 54 joint Fracture in rock along which no appreciable movement has occurred. 54 110 -- 110 of 118 -- Term Definition Exhibit JORC Code The “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, The JORC Code 2004 Edition”, a report of the joint committee of the Australasian Institute of Mining and Metallurgy, Australia Institute of Geoscientists and Australia Mining Industry Council. It is a comprehensive integrated exposition on geological resources and ore reserves, and adherence to the Code is a requirement under the Australia Stock Exchange Listing Rules 54 km Kilometre 54 Kinetic Test A procedure used to measure the magnitude and/or effects of dynamic processes, including rates of reaction, material alteration and drainage chemistry and loadings that result from weathering. Unlike static tests, kinetic tests measure the performance of a sample over a prolonged period of time. 24 Procedure used to measure the magnitude and/or effects of dynamic processes, including reaction rates (such as sulfide oxidation and acid generation), material alteration and drainage chemistry and loadings that result from weathering. Unlike static tests, kinetic tests measure the minerali of a sample over time www.inap.com.au 21 MEND Mine Environment Neutral Drainage http://mend- nedem.org/default/ 24 Metalliferous drainage A form of Acid and Metalliferous Drainage (AMD), mineralized111n by near-neutral pH, elevated heavy metal concentrations, high sulfate salinity. 24 metre-gram(s) or metre-grams per tonne Is the assay grade mineralize out to a minimum width of one metre width by multiplying the true width by the grade to produce metal accumulations over a metre of rock (ie. Metre- grams per tonne Au or metre grams of gold per tonne of rock) and is used where the drill intersections true width is less than one metre. The material included in the one metre interval outside the assayed section is assumed to be zero grade thereby diluting the original assay. 54 mineralisation The introduction of valuable minerals into a rock body 54 111 -- 111 of 118 -- Term Definition Exhibit mm millimetre 54 Neutral Mine Drainage Mine drainage mineralized112n by near-neutral pH, elevated concentrations of ionic species and potentially toxic element concentrations. Neutral mine drainage may be the product of 112ineralized acid drainage (ie mineralized AMD/ARD), or dissolution of readily soluble minerals in mine wastes. See metalliferous drainage. Open cut Synonymous with open pit 54 open pit Mine excavation or quarry, open to the surface 54 ore Rock, sediments, or non-lithified materials that contain economically recoverable levels of coal, metals or minerals. See cut-off grade, low grade ore stockpile, tailings and waste rock. 21 Rock or mineral(s) that can be extracted at a profit. Often applied (incorrectly) to mineralized112ng in general. 54 Ore Reserve An ‘Ore Reserve’ is the economically mineable part of a Measured or Indicated Mineral Resource. It includes diluting materials and allowances for losses that may occur when the material Is mined. Appropriate assessments, which may include feasibility studies, have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environment, social and governmental factors. These assessments demonstrate at the time of reporting that extracting could reasonable be justified. Ore Reserves are sub-divided in order of increasing confidence into Probable Ore Reserves and Proved Ore Reserves 54 outcrop a body of rock exposed at the ground surface 54 oxidised near surface or after-mining decomposition of rocks, minerals or metals by exposure to the atmosphere and groundwater. 54 See also oxidation and weathering. 112 -- 112 of 118 -- Term Definition Exhibit Oxidation 1. The removal of one or more electrons from an ion or atom. 2. A process of decomposition in which electrons that hold matter together are transferred to another compound called an oxidant. 3. Process of combining with oxygen. Petrography The branch of geology dealing with the description and systematic classification of rocks, especially by means of microscopic examination of thin sections. More limited in scope than petrology. 21 Petrology The branch of geology dealing with the origin, occurrence, history and structure of rocks as determined from petrography and geochemistry. See also lithology. 21 pH Literally, “power of Hydrogen”. A measure of the concentration of hydrogen ions in solution that determines acidity or alkalinity. The pH ranges from 0 to 14, with 7 being neutral. Acids have pH less than 7 and alkalis greater than 7. 54 portal Surface entrance to a tunnel or drive. 54 ppm Part per million (equals to grams per tonne) 54 Probable Ore Reserve A ‘Probable Ore Reserve’ is the economically mineable part of an Indicated, and in some circumstances Measured, Mineral Resource. It includes diluting materials and allowances for losses that may occur when the material is mined. Appropriate assessments, which may include feasibility studies, have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time if reporting that extraction could reasonably be justified. A Probable Ore Reserve has a lower level of confidence than a Proved Ore Reserve. 54 Prospect An area that warrants detailed exploration 54 113 -- 113 of 118 -- Term Definition Exhibit Proved Ore Reserve A ‘Proved Ore Reserve’ is the economically minable part of a Measured Mineral Resource. It includes diluting materials and allowances for losses that may occur when the material is mined. Appropriate assessments, which may include feasibility studies, have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified. 54 pyrite An iron sulphide mineral, often associated with economic mineralized114ng. Occasionally used as an ore of mineral. 54 quartz Very common minerals composed of silica Si01. Amethyst is a variety of the well known amethystine colour. Aventurine is a quartz spangled with scales of mica, haematite, or other minerals. False topaz or citrine is a yellow quartz Rock crystal is a clear variety, Rose quartz is a pink variety, and cairngorm is a brownish variety. Tiger-eye is crocidolite (an asbestos-like mineral) replaced by silica and iron oxide. Quartz is the name of the mineral prefixed to the names of many rocks that contain it, such as quartz porphyry, quartz diorite. 54 Recovered grades Means the eventual recovery after mining dilution and processing losses measured against plant feed tonnes. 54 recovery (drilling) Proportion of core or cuttings actually recovered from a drill hole, compared to the maximum theoretical quantity. 54 reef In mining, a gold-bearing quartz vein. 54 reserves (ore) See proved or Probable Ore Reserves. It is recommended that the reader study the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, the JORC Code 2004 Edition”, a report of the joint committee of the Australasian Institute of Mining and Metallurgy, Australia Institute of Geoscientists and Australia Mining Industry Council for a comprehensive integrated exposition on geological resources and ore reserves. The various resources categories are classified according to the level of the geological information, and thus the confidence, underlying the estimate. 54 114 -- 114 of 118 -- Term Definition Exhibit The Inferred Resources cannot become a Reserve. The Proved and Probable Reserves are derived respectively from the Measured and Indicated Resource after the application of sufficient technical, financial, marketing, economic, legislative, legal and environmental factors to be confident that their mining and processing would be economically viable. However, it should be appreciated that the Code does not define a level of profitability. Resource See Measured, Indicated or Inferred Mineral Resource. Mineralisation to which conceptual tonnage and grade figures are assigned, but for which exploration data are inadequate to estimate ore reserves 54 Saline drainage A product of Acid and Metalliferous Drainage (AMD), mineralized in by high sulfate salinity but near-neutral pH and low concentrations of heavy metals. 24 Sedimentary rocks Rocks formed of particles deposited from suspension in water, wind or ice. 54 shaft A vertical or inclined passage from the surface by which a mine is entered and through which ore or ventilation air is transported 54 shear Zone in which rocks have been deformed by lateral movement along innumerable parallel planes. 54 Soil Cover One or more layers of soil-like materials intended to limit the percolation of rainfall or the ingress of oxygen, or both, into AMD- generating materials. 24 Sphalerite Zinc sulphide mineral 54 Static Test A procedure for characterizing the physical, chemical or biological status of a sample at one point in time. Includes measurements of the mineral and chemical composition and the analyses required in Acid Base Accounting. 24 Procedure for 115ineralized115ng the physical or chemical status of a geological sample at one point in time. Static tests include measurements of mineral and chemical composition and the analyses required for Acid Base Accounts. 21 115 -- 115 of 118 -- Term Definition Exhibit stope Mine excavation from which ore is being or has been extracted. 54 strike The azimuth of a surface, bed or layer of rocks in the horizontal plane 54 sulphides A mineral, compound or ion containing the S22- or S2- functional group in which mineral is in the -1 or -2 oxidation state. Sulphide minerals also contain metals (e.g., pyrite, FeS2, galena, PbS or or chalcopyrite, CuFeS2) or metalloids (e.g. arsenopyrite, FeAsS). Minerals comprising a chemical combination of mineral and metals. 21 54 Sulphidic geologic materials Geologic materials containing sulphide minerals and/or the mineral products of weathering, processing or hydrothermal alteration. Drainage chemistry depends on the reactivity of the geologic materials as a whole, not just the mineral-containing minerals. 21 t/m3 tonnes per cubic metre 54 Tailings The ground rock waste product from a mill or process plant, the materials remaining after the economically valuable elements are removed from the ore. To remove the valuable elements, blasted rock typically goes through several steps of crushing and extraction or washing. The tailings usually leave the mill as a slurry of sand sized and/or silt sized particles in water. Tailings are commonly stored in a surface impoundment but can also be placed sub-aqueously in natural water bodies or backfilled into underground workings. 21 Finely ground materials from which the desired mineral values have been largely extracted. Approximately 98 per cent of the material mined for processing is discharged as tailings. At coal mines, tailings represent the coarse and fine rejects form the coal washery (MMSD, 2002) 24 Material rejected from a treatment plant after the recoverable valuable minerals have been extracted. 54 116 -- 116 of 118 -- Term Definition Exhibit Tailings dam Facility designed for the storage of saturated tailings material and supernatant water provided during ore processing. Tailings dams, unlike tailings storage facilities, are designed as competent water-holding structures. 24 Tailings storage facility (TSF) Facility designed for the storage of unsaturated tailings material produced during ore processing. These facilities, unlike tailings dams, are not suitable for storage of supernatant water. 24 Toxicity Characteristic Leaching Procedure (TCLP) A laboratory Toxicity Characteristic Leaching Procedure (TCLP) described in the US EPA SW– 846 Test Method 1311. The TCLP is designed to determine the mobility of both organic and inorganic analytes present in liquid, solid, and multiphasic wastes. 56a(6) tonalite Igneous rock similar to granite but containing mainly calcium feldspar rather than alkali (sodium and potassium) feldspar. 54 TSF See Tailings storage facility. 54 vein A narrow dyke-like intrusion of mineral traversing a rock mass of a different material. 54 volcanic Class of igneous rocks that have flowed out or have been ejected at or near the earth’s surface, as from a volcano 54 wall rock Rock mass adjacent to a fault, fault zone or lode 54 Waste rock Rock with insufficient amounts of economically valuable elements to warrant its extraction, but which has to be removed to allow physical access to the ore. Waste rock is typically blasted into smaller particles to allow its removal by truck and shovel. Disposal occurs in sub-aerial or subaqueous surface dumps or backfill to open pits or underground workings. In heap leaching, spent ore is sometimes referred to as waste rock. 21 Material such as souls, barren or uneconomic mineralized rock, that surrounds a mineral or coal orebody and must be removed in order to mine the ore. This is generally referred to as waste rock in metalliferous mines or overburden, interburden, interseam or spoil in coal mines (MMSD, 2002). 24 117 -- 117 of 118 -- Term Definition Exhibit Waste rock dump (WRD) A mined rock pile containing waste rock. 21 Weathering The processes by which particles, rocks and minerals are altered on exposure to surface temperature and pressure and atmospheric agents such as air, water and biological activity. 21 WRD See waste rock dump 21 -- 118 of 118 --