Arco Coal Aistralia Inc & Ors v United Plantations of Australia Ltd [1995] QMW 163

IN THE WARDENS COURT BRISBANE IN THE MATTER OF Mining Lease Application 70110 by ARCO COAL AUSTRALIA INC. on behalf of itself and ARCO RESOURCES LIMITED, MITSUI GORDONSTONE INVESTMENT PTY LTD and MLC COAL INVESTMENT PTY LTD - and - IN THE MATTER OF an objection by UNITED PLANTATIONS OF AUSTRALIA LIMITED RULING - SECTIONS 268(3), 268(6), 269(4)(m) AND 376(1) OF MINERAL RESOURCES ACT 1989 ("ACT") - SUBSIDENCE On 22 December 1994, Arco Coal Australia Inc on behalf of itself (50%), Arco Resources Limited (30%), Mitsui Gordonstone Investment Pty Ltd (15%) and MLC Coal Investment Pty Ltd (5%) ("Applicant") lodged an application for a coal mining lease (No 70110) being an area of 3,789 hectares. No surface area is sought although, it is noted, the Applicant anticipates the grant of a Mineral Development Licence over the surface area. The term of the lease sought is presently from grant to 30 April 2011. The application area is situated approximately 35 kilometres north east of Emerald. It forms part of a farm owned and operated by United Plantations of Australia Limited ("Objector"). [1995] QMW 163 -- 1 of 36 -- This application (excluding interlocutory applications) was heard on 24 April, 26 April 1995, 2 May, 22-26 May, 30 May 1995, 25 and 27 July 1995, on which date the application was adjourned. BACKGROUND OF APPLICANT The application area (3,789 hectares) adjoins Mining Lease 1978 ("Gordonstone Mine") which occupies an area of approximately 5,840 hectares and is owned and operated by the Applicant as a coal mine. This lease was granted in April 1990, effective 1 May 1990 for a term of 21 years. This area was previously owned by the Objector until purchased by the Applicant in 1989. Pursuant to the terms of a Licence Agreement between the Applicant and the Objector, certain areas are available to the Objector to farm. Mining is carried out in the German Creek Seam which seems to be the only coal seam of economic significance in the area. The depth of cover ranges from 100 metres to about 350 metres with the seam thickness averaging about 3 metres. Gordonstone Mine is designed as a Retreat Longwall Operation. Within the boundaries of the mine are 4 mining areas called "Domains". Thus, you have Domains 1 to 4. Within each Domain there are "Panels". The first two Panels in Domain 1 are numbered Panels 101 and 102 and are approximately 200 metres wide. Subsequent Panels (example Panels 201 and 202 in Domain 2) are 250 metres wide. Panel lengths vary from 1 kilometre to 2.5 kilometres. Between Panels, there are remaining (unmined) pillars of about 25 metres in width. It is noted that "larger" Panels are possible in the future based on technology improvements and economics [see Application P 12]. -- 2 of 36 -- - 3 - Longwall production commenced in April 1993 and will continue for the life of the mine which the Applicant now projects to be 29 years if the present application area is included [see Application P 12]. In 1996, it is expected to operate alternating longwall mining machines [see Application - Long Range Plan]. Recoverable coal, as from 1995, is 92 million tonnes [T116]. It is noted that this figure is in contrast to the figure stated in the Application [P 15] of 179 million tonnes). Saleable coal extracted in 1993 was 2.4 million tonnes and in 1994, 4.0 million tonnes. Projections for 1995, 1996 and 1997 are 4.5 million tonnes per year respectively [Application P 12]. The Gordonstone Mine presently employs around 500 people. It is an international exporter of quality coking and steaming coal. It has obviously promoted considerable growth in surrounding community and support services and provided export revenue and revenue to the State Government in terms of rail freights, royalties and port user charges. The Applicant has, over the past three years also been presented with a number of awards for high standards in environmental management at its Gordonstone Mine: (a)"Highly Commended Award" from Atlantic Richfield (parent company of Applicant) for innovative and early attention to environmental management (1992); (b)"Highly Commended Award" from the Queensland Government in recognition of the high standard of environmental management (1993); and -- 3 of 36 -- - 4 - (c)"Award for Excellence" from the Queensland Government in the planning, design and implementation of environmental management systems (1994). In (b) above, the commendation stated, inter alia - "Sustainable development and multiple land use have guided the development and operation of the project so that underground coal mining is compatible with large scale agricultural production." In (c) above, the commendation stated, inter alia - "The principles of multiple land use and sustainable development are inherent in Arco Coal's approach to mining. The mine infrastructure has been specifically located on an area unsuitable for agricultural cropping. Ground subsidence, soil erosion and water quality are all managed so as to minimize the impact on the environment and disturbance to the agricultural operation. "Mining operations are integrated with agricultural production. This is achieved by ceasing agricultural production until surface and underground subsidence is complete, managing the land in the interim by sewing a cover crop and removing contour banks and then replacing banks and then recommencing agricultural production following the completion of subsidence." These worthy commendations are of some note. They are also consistent, according to the Applicant's material, with the mining industries approach in incorporation the principles of Ecologically Sustainable Development in the planning and operational management of exploration and mining. These principles involve, it is said, more effective integration of environmental, economic and social factors into decision making, integration of environmental management with mine planning, taking a long term approach to environmental management and dealing cautiously with risk and uncertainty in line with the -- 4 of 36 -- - 5 - precautionary principle [see Commendation 1994 (c) above]. BACKGROUND OF OBJECTOR The Objector owns and operates the application area which forms part of "Gordon Downs", Australia's largest wheat farm and Australia's largest certified organic farm [T374]. By world standards, the uncontradicted evidence is that Gordon Downs is also one of the world's largest organic grain farms. Mr. Arne Pedersen is the on-site General Manager and has been since 1982. He holds a Diploma of Agriculture from Lyngby College, Denmark [Exhibit 42 P 1]. The present farmable area of Gordon Downs is about 10,522 Ha [Exhibit 42 P 6 and T419]. About 75% of the original area (15,000 Ha) had to be cleared [T400]. The development and clearing costs to bring the farm to organic farm status (excluding acquisition costs) was about $7 million. The area in general, is considered to be a "new" area in terms of agricultural farming. I must say with tree clearing guidelines presently existing, it is difficult to see how this farm could ever be easily replicated. That aspect might assume even greater significance if one were to consider the provisions of Section 281(4) of the Act. Soil -- 5 of 36 -- - 6 - Some of the soils on Gordon Downs are very friable, that is, easily crumbled. The best description I could find of the soil is - "A cracking, self-mulching black clay soil which is prone to soil erosion in high rainfall events." [see Arco Environmental Achievement Award Nomination 1992 P 5 - Affidavit of Armstrong Exhibit 11]. From an agricultural view point the cover of soil is in parts quite shallow [(1) T65]. Depths range from about 25-60 centimetres [(1) T60]. Some areas may be deeper. The soils on the application area are described as "relatively deep" i.e. in excess of 50 centimetres and represent some of the better soils on the farm. [McGarity P 7 - Exhibit 55]. There are two limiting features of the soil at Gordon Downs: (a)Ability of the soil to store and release water for crop production; and (b)Depth of solum, that is, the upper part of the soil profile. These two features contribute, I think, to the "fragile" nature of the soil in general, although, it must be said that the physical condition of the soil is regarded as "excellent" as at April 1995 [McGarity P 6 - Exhibit 55]. The excellent physical and chemical fertility of the black soil at Gordon Downs is widely recognised [Pedon Consultants, P 30 - Exhibit 56]. There are however, inherent problems of chemical fertility. -- 6 of 36 -- - 7 - These are related most commonly to the levels of available plant nutrients such as nitrogen, phosphorous, sulphur and zinc. In summary, I accept on the evidence that the soils at Gordon Downs including the application area have physical and chemical fertility comparable with other highly valued and productive soils in the district [Ibid P 35]. Perhaps a good indicator of the quality of the soil is that the organic wheat produced to date has a unique feature - it has an unusually high protein content of 14%-17%. Whilst not referred to in evidence (see Section 268(3) of Act), it is a fact that the protein levels in Australian wheat are falling because of progressive depletion of nitrogen in the soil. It is said that approximately 20,000 tonnes of nitrogen are lost with every 1,000,000 tonnes of harvested wheat. Nitrogen is not always easily replaced. It may, in some circumstances, be either expensive or its application can possibly have damaging environmental side effects. Yet, as an illustration of the point, it is becoming increasingly common for importing nations to set minimum protein levels (example 10.5%) for the wheat that they purchase. I accept that most farmers are "battling to get 13% protein". Hence, any soil degradation accidental or intentional with respect to a wheat farm in my view is a serious matter. ["A Question of Balance" - David Mercer 2nd ed P 255: Annexure 4 to Affidavit Pedersen Exhibit 42 and T699.6]. The quality of organic grain may be maintained through effective integrated crop rotation which I will deal with below. -- 7 of 36 -- - 8 - Contour Banks The landscape on Gordon Downs including the application area is erosion prone. It is relatively flat having a slope of around 1%-3%. Contour banks are therefore necessary to minimize erosion. As Mr. Morawitz said [Exhibit 67 P 6] - "Contour banks are designed to act as a break to a source of water." and "The banks are engineered and constructed on the principle of flatness of fall on the contour until getting near the discharge area for the contour banks where it is drained onto a grassed or rock waterway area. The reason for this tapered fall is to increase the velocity of the water as you approach the discharge point. This assists in the flushing from the contour bank waterway, grass and debris washed from the field onto the contour bank. By increasing the velocity as it nears the exit from the contour bank you enable the grass and debris being carried by the water to be flushed away and not to clog the contour bank waterway thus making a dam. Dams are dangerous because water then seeps through the bank weakening the bank and enabling it in future downpours to be washed away with consequent erosion problems." The starting point for the installation of contour banks at Gordon Downs was a survey in conjunction with the Department of Primary Industries ("DPI") at Emerald. What followed was a recommended design by DPI and then construction, much of which was undertaken by Mr. Morawitz. A Government grant of $30,000 was made to assist construction. In that context, it is noted that Gordon Downs -- 8 of 36 -- - 9 - formed part of a Soil Conservation Programme set up by DPI Emerald in the early 1980's. Perhaps, it may be more accurately described as a trial and error programme, which is an indication of the state of knowledge at that time [T366-367]. To date, approximately 308 kilometres of contour banks have been constructed on Gordon Downs. As a rough guide, 1.5 kilometres of contour banks could be constructed in a day. I accept that contour banks have been successful in minimizing erosion. Soil loss on the application area is of the order of 12 tonnes per annum per hectare. Waterways have also been constructed in conjunction with contour banks and these are grassed. The construction of these waterways as such, has to be done with a mind to the actual water shed prevailing in that vicinity. It is a careful and time consuming exercise. Contour banks play an integral part in sustainable agriculture referred to below. Organic Farm As indicated previously, Gordon Downs is Australia's largest certified organic farm [T374]. Farming in this case means both agriculture and stocking the land. There is a significant advantage in this certification in that a premium is charged for agistment of stock and crops presently earn a 20%-25% higher price compared to crops without certification [Pedersen Exhibit 42 P 5]. Produce leaving Gordon Downs is certified "CERTIFIED LEVEL -- 9 of 36 -- - 10 - A ORGANIC BY NASAA". This certification is recognised worldwide [Pedersen Exhibit 42 P 6]. Organic farming - Level A prerequisites means a system of farming that eliminates the use of all synthetics, fertilizers and pesticides, growth regulators, antibiotics, hormone stimulants or intensive livestock systems. However, an organic system cannot be defined as "chemical free". An organic farming system is one where a dynamic ecosystem has been achieved or is clearly being developed. "In an organic farming system we do not expect to see sole reliance on "organic" inputs (e.g. sprays), merely because they are permitted. We expect that the grower will be aiming to understand the dynamics of the cropping or livestock system and to develop management techniques which will reduce dependence on even the permitted substances. The degree to which the permitted inputs can be eliminated will vary for different enterprises, geographic environments and crops. "An organic farming system must show regard for broader concepts of sustainability. An organic farm would display appropriate land care and conservation techniques. use of windbreaks, shelter-belts, soil conservation and cultivation practices, and responsible irrigation, which are appropriate to the soil type and topograph of the land. "Demonstration of attempts to both conserve and establish biological diversity using trees and other vegetation is a prerequisite for Level A" [Exhibit 43 -The National Association for Sustainable Agriculture Australia Ltd. - p 8]. Organic certification does not go with the land. It goes with the crop in production [T409]. It is also the case, that organic food enjoys a growing market in Europe and Asia [T373.9]. I accept that an area of 1200 hectares has also been planned -- 10 of 36 -- - 11 - for irrigation of "Green Cotton". This is cotton produced free of any use of chemicals and is in very high demand. The price for a bale of green cotton is around double or one and a half times the price of conventional cotton. [Pedersen Exhibit 42 P 5]. Crop Rotation Gordon Downs is operated as an "integrated farm", ie as a whole. It is not in my view to be seen as the sum of its constituent parts. To see it as such would be to misconstrue the facts and in my view, to misunderstand the fundamental nature of the system. To maintain Level "A" certification, crop rotation is essential. Crop rotation is important for these reasons: If the same crop is grown each year on the same piece of land, nutrients are extracted from the soils, which as a consequences, becomes less fertile and is productive of less healthy crops and creates a permanent reservoir of pests specific to that crop. By rotating crops, a good pool of supply of most nutrients can be expected in the soils at Gordon Downs and without the same pest problems. On the evidence, I accept that nitrogen is likely to be the most limiting nutrient element in certain circumstances. However, under the crop rotation system practised, nitrogen has been generally maintained by introducing a legume such as soya bean into the rotation after four successful grain crops. That is, three wheat, one sunflower or sorghum [McGarity P 4 Exhibit 55]. The practices in place are a form of sustainable -- 11 of 36 -- - 12 - agriculture. Sustainable agriculture does four things: (a)Stabilizes the soil against erosion; (b)Builds up nutrients; (c)Decreases toxins; (d)Increases organic matter [T711-712]. It is true that over the past several years, the ruinous drought has forced the Objector to adopt a "patchwork" approach to crop rotation. However, I accept that it came "close" to achieving the desired rotation in the late 1980's [T420-421]. On the evidence, I accept that to operate Gordon Downs as an integrated farm and to maintain Level "A" certification referred to above, is a job requiring a considerable amount of skill, know how and in particular long term planning. In that sense, it is no different to the Applicant. Application Area I accept that the application area consists of the following - (a)(i)2,800 Ha - area set aside for cultivation and of that approximately 2,000 Ha is presently under crops; (ii)920 Ha - grassed country; (iii)60+ Ha - other. (b)64 kilometres of contour banks; (c)18 kilometres of in-field waterways; (d)Main waterways; (e)Farm roads and tracks; and -- 12 of 36 -- - 13 - (f)Fences. [Exhibit 42 P 16, Exhibit 54, T377, T430 and T448]. Mining Lease 1978 Part of the surface area of Mining Lease 1978 forms part of Gordon Downs. Pertinent facts for the moment, are as follows: (a)The Objector originally owned the present surface area of Mining Lease 1978 until purchased by the Applicant in 1989 [Pedersen P 8]. (b)By License Agreement, the Objector is permitted to farm certain farmable areas of Mining Lease 1978 for a total of about 21 years (excluding an option) of which nearly 6 years have elapsed [T392]. (c)Unmined areas may still enjoy organic farm certification [T374]. (d)Such Certification on Mining Lease 1978 diminishes in direct proportion to the area mined [T375]. APPLICANT'S CASE - SUBSIDENCE The Applicant (unlike its approach to Mining Lease 1978) has not opted to purchase the application area from the Objector. Nor does it seek any of the surface area of the application area based on the premise that it has no need of it. That issue was contested. However, by far and above the most important and contested issue to arise in this application is the effect that longwall mining will have on the application area, i.e. subsidence of the -- 13 of 36 -- - 14 - surface. It is this issue that has assumed special significance and is the subject of this ruling. The source of evidence for the Applicant on subsidence was Mr. Armstrong [Exhibit 11], Mr. Fawcett [Exhibit 22] and to a lesser degree Mr. Sly, the Applicant's Technical Services Leader [Exhibit 12]. The qualifications and experience of those persons are set out in the material referred to. The application area is divided into - (a)Domains 5 and 6 which are to be mined by Retreat Longwall method of coal extraction; and (b)An area to the north of Domain 5, which is not mapped by the Applicant for any obvious mining activity [Map 2 Exhibit 12]. Within the application area there is a total coal resource estimated at 141m tonnes. Extraction from the application area will not actually commence until mid year 2004. However, the Applicant points out that decisions are required to be made this year towards facilitating the drivage at the required time [Para. 15 Affidavit of Sly - Exhibit 12]. The Applicant, far from denying any serious impacts on the application area freely admits that the obvious impacts of mining will be - (a)Subsidence of surface area; and (b)The potential for the accumulation of poorer quality water. -- 14 of 36 -- - 15 - Subsidence will produce a differential across the existing surface of the application area. As each panel is mined sequentially, it creates a steep profile of subsidence on its eastern side and on its western side, the subsidence from it overlaps with the subsidence trough from the previous panel. However, the pillar left between panels offers resistance to the subsiding overburden and creates a "hump" in the subsidence profile. The process is repeated as each successive panel is worked. The final outcome is that the surface affected by the longwall panel and intervening pillar mining has a corrugated form similar in principle to that of ridges and furrows on ploughed land [Wardell - Exhibit 62 P 23]. There seems no argument as to the mathematical equation to actually measure subsidence. These are the critical ingredients - (a)Extraction width; (b)Extraction thickness; (c)Nature of cover; (d)Strain; (e)Angle of draw [Fawcett - Exhibit 22 P 16]. There have been estimates of subsidence on the application area producing an "average" of at least 1 to 1.5 metres across the existing surface [(1) P 45]. Mr. Fawcett has been more exacting in his calculations. For example, in the north of Domain 5 subsidence will range from 1.8 metres to 2.7 metres and in the south of Domain 5, subsidence will range from 1.6 metres to 2.00 metres. In the north of Domain 6, -- 15 of 36 -- - 16 - subsidence will range from .6 metres to 1.7 metres and in the south it is estimated at .4 metres only. In summary, subsidence is estimated to range from .4 metres to 2.7 metres [see Fawcett Exhibit 22 P 18]. It should be noted that as cover increases and the seam of coal thins, subsidence reduces. This accounts, for the most part, for the fact that subsidence is measured at .4 metres in the south of Domain 6. The Applicant has, I must say, an elaborate method of subsidence measurement consisting of surface survey, strata control and predicted modelling [see para. 11.3 EMOS - Affidavit Armstrong Exhibit 11]. The Applicant has positively asserted and it is an important part of its case that the proposed mining in the application area will have no long term detrimental effect on the agricultural and grazing land of the Objector. It says that the application area is simply an operational extension of the Gordonstone Mine and although there is a short term restrictive effect on cultivation and grazing, there is no long term substantial effect or impact caused thereon by mining and the subsequent subsidence of the surface land. The short term restriction on land use, it is argued, is the result of managing actively subsiding land in a way that minimises soil loss and soil erosion. This is achieved by - Firstly: Prediction of when subsidence of the surface will occur and notifying the Objector so that cattle can be removed from the actively subsiding areas. -- 16 of 36 -- - 17 - Secondly: Subdividing the surface to be affected by a subsidence into Surface Management Units which are delineated on the basis of surface drainage and water ways. Those areas are to be removed from cultivation and the pasture established which will provide protection to the surface soil from the risk of soil erosion during active subsidence when surface slopes may be at their greatest extent. Thirdly: Cattle will be removed from areas which are actively subsiding and this could be for a period of up to six months. Fourthly: The original contour banks are removed for the period of active subsidence in each Surface Management Unit. Fifthly: After subsidence the contour banks are redesigned and reconstructed according to the new surface contours. Sixthly: Cultivation can then be resumed on areas which have ceased subsiding after mining and this could be after six months. The Applicant has now completed 3½ mining panels on Mining Lease 1978 which it has argued has provided the opportunity to monitor subsidence and develop a predictive capacity for future subsidence. Further, it says that the experience on Mining Lease 1978 can be extrapolated directly to the application area because of the similar land characteristics of the application area. The only exception to this is that the coal is generally deeper in the application area. The Applicant has detailed its monitoring programme with -- 17 of 36 -- - 18 - respect to the Surface Management Units, namely Surface Management Unit 1 and Surface Management Unit 2. With respect to Surface Management Unit 2 described, mining is due to be completed in December 1996. Then, according to its plan it is then intended to reinstate the contour banks 3 months after completion of mining within the Unit. It should be noted that Surface Management Unit 2 approximately corresponds with longwall panel 201 and 202 of Domain 2. The Unit, it is said, is closely aligned to a water subcatchment area. A perusal of the EMOS detailing the Applicant's work with respect to Surface Management Units, also indicates past involvement by the Department of Primary Industries at Emerald and future anticipated involvement with respect to the Surface Management Units. For example, at page 23 of the Emos the Applicant asserts that one of the key elements of the management of subsidence programme is - "Construction of new soil erosion control structures such as contour banks and water diversion banks in accordance with the Department of Primary Industry recommendations along the new surface contour." Other examples of confidence can be found without difficulty. For example, at page 6 of the Arco Environment Achievement Award Nomination 1992 ["ABA8" - Exhibit 11], the following passage appears - "The subsidence management program is the result of a cooperative and outcomes - oriented approach by the land owner, the Queensland Government and Gordonstone to control the surface effects of mine subsidence. Regular contact between the Gordon Downs farmer and the Gordonstone Environmental Officers has, and will, ensure that the program meets its objectives." -- 18 of 36 -- - 19 - The disinterested observer might be forgiven for thinking that the "subsidence management program" has the "stamp of approval" of the Queensland Government and a-fortiori is therefore proven. Coal extraction of course, did not actually begin until April 1993. I will have something further to say about the involvement of the Queensland Government below. As another measure of confidence, at page 31 of the transcript appears the following extract of evidence from Mr. Armstrong - "... We took an undertaking, not only to United Plantations, but also through the EMOS to the ... Department of Mineral and Energy ... that one of the meters (sic) of success in environment management at Gordonstone would be the maintenance of private property ... of the organic certification." (See also P 6 ARCO application for award 1993, "ABA6" Exhibit 11.) The Applicant has also adduced evidence with respect to subsidence and farming at Gunnadar. This is simply referred to as the "Gunnadar experience". Mr. Sly referred to the Gunnadar experience (T188). It was not, however, as evidence in chief but rather in re-examination. Mr. Fawcett also made some reference to the Gunnadar experience but that was qualified by the fact that the method of mining was not longwall mining. More significantly in my view, excepting for Gordonstone, he was not aware of anywhere in Australia where longwall mining had been undertaken under crops [T229]. As to the "potential for the accumulation of poorer quality water", the Applicant relied upon the EMOS commencing at section 4 page 33 and 57 of Annexure "ABA2", Exhibit 11, and commencing -- 19 of 36 -- - 20 - at page 22 of Annexure "ABA3", Exhibit 11. I will also have something further to say about the relevance of this material to the question subsidence, below. OBJECTOR'S CASE - SUBSIDENCE The Objector relied upon Mr. Arne Pedersen [Exhibit 42], Dr McGarity [Exhibit 55], numerous papers [Exhibits 56-59; Exhibit 61 and 62], Mr. Morawitz [Exhibit 67] and Professor Roberts [Exhibit 72]. There were also numerous photographic exhibits and plans relied upon by the Objector. The Objector's case, insofar as it is relevant to this Ruling, was based upon adverse environmental effects of a subsidence namely - 1.Observable ponding in area adjacent to Homestead Gully. A consequence of this could be loss of nitrogen and leaching of nutrients from the soil. 2.Cracking of soil surface as a result of (1). 3.Cracks (40 cm width in places) above and below Junction Gully diversion channel. These cracks ran diagonally across the slope and created the potential for gully erosion. 4.Increased risk of erosion not only for the area of subsidence but for the subcatchment as a whole. 5.Reinstatement of contour banks may prove ineffective or impossible in a soil landscape where a series of troughs, basins, steps and crack structures greatly affect natural topography. -- 20 of 36 -- - 21 - 6.Ground water hydrology may be affected which could in turn affect bores and potential irrigation development. 7.Excision of Surface Management Units may leave remaining areas difficult to work (including machinery problems) and otherwise seriously interfere with the rotation programme [McGarity Exhibit 55, p 1-25]. Professor Roberts concluded - 1.Subsidence would eliminate the potential income from the irrigation development of the farming land adjacent to Crinum and Belcong Creeks. 2.The loss of organic crop gross income from irrigation and dry land farming over the next ten years could be estimated at $17 million. (I regard this as a compensation related issue.) 3.Subsidence if repeated in the application area, would create a landscape of unstable "man-made melonholes" and would make conservation farming impossible. 4.The Objector would not be able to operate an integrated system of conservation farming on land which is subject to progressive subsidence. Mr. Arne Pedersen listed what he considered to be the impacts of subsidence as - 1.Farming and grazing land would go out of production some two years before subsidence is due to start. 2.80% of subsidence would take place within the first year. 3.The balance of subsidence would take place in succeeding years, up to five years after the initial subsidence. -- 21 of 36 -- - 22 - 4.Redevelopment of the land would be required including the installation of new contour banks, if that was possible at all, along with new drainage patterns. The land would be out of production for some eight to ten years. On the mining operations being carried out on Mining Lease 1978 at present, up to 1,000 hectares were out of production at any one time with no guarantee that it could ever be returned to production, particularly organic grain production. Arising out of the foregoing, the Objector's major theme was that the environmental impact of the proposal by the Applicant had not been measured and the proposals for management of the environmental impact on the application area were ill researched and completely inadequate to justify recommendation. OBSERVATIONS Whilst I found the Applicant's case to be well presented, there were a number of difficulties that have given me cause for concern:- 1.Ms Catherine Brosnan, an employee of the Applicant and an environmental co-ordinator, was not called to corroborate Mr. Armstrong. Ms Brosnan's responsibilities and duties include "subsidence management" [Exhibit 11 para 5]. She is also, I note, -- 22 of 36 -- - 23 - the daughter of a local farmer who had 1.4 metre contour banks installed by Mr. Morawitz [see Exhibit 67 P 7]. 2.More importantly, Mr. George Bourne, a soil conservationist with DPI Emerald, gave expert evidence at the hearing of Mining Lease 1978 in 1986 and subsequently played a prominent role in the original installation of contour banks at Gordon Downs. He was not called by the Applicant as a witness. The evidence from Mr. Armstrong on the point when being cross examined by Mr. Douglas QC is of note. A relevant extract reads as follows ".. BUT HAVE YOU EVER ASKED WHAT HIS VIEWS ARE ABOUT .. THE ABILITY OF SOMEONE TO .. REPLENISH THESE CONTOUR BANKS? "He he's expressed his views many times in ..... our meetings "AND HE SAYS IT CAN BE DONE DOES HE? "He says it's..he says it can be done..not only can it be done but it..will be done and it must be done. "WELL NOW...HAVE YOU GOT THAT IN WRITING FROM MR. BOURNE HAVE YOU? "We've got..numerous files of meeting notes now whether we've recorded his exact words... "YOU'RE SAYING TO US HERE TODAY..ARE YOU THAT MR. BOURNE HAS TOLD YOU THAT....THE CONTOUR BANKS ON THIS PROPERTY..CAN BE RESTORED SO THE PROPERTY CAN BE FARMED AGAIN AS A GRAIN FARM..IS THAT WHAT YOU'RE SAYING? "That's correct that's my understanding of his his view "I SEE..HAVE YOU SPOKEN TO HIM RECENTLY? "I've spoken to him I guess ....two months ago "I SEE..HAS HE BEEN CALLED IN YOUR CASE MR. ARMSTRONG? -- 23 of 36 -- - 24 - "No he hasn't". [(1) T46-47]. Further cross examination by Mr. Douglas QC as to Mr. Armstrong's basis for not agreeing with the Objector's argument that the application area could not be returned to a position where it could be cropped relevantly reads - "I KNOW YOU DON'T AGREE WITH ME..WHAT'S YOUR BASIS FOR NOT AGREEING..YOU'VE GOT NO KNOWLEDGE OF THIS? "No personal knowledge..a number of experts have been engaged by Gordonstone over the years and this goes back now over the last sort of 5 or 6 years to.. "IT SEEMS NONE OF THEM ARE COMING..NONE OF THEM ARE COMING HERE TO TELL US OF THEIR EXPERIENCE? "They they came on a previous Mining Wardens inquiry..and and gave evidence and....those those experts have helped us put the subsidence management plan together..and ....I'm using my my experience gained over the last four years and their expert knowledge to say that we have a subsidence management plan together that will work and that will restore agriculture..to areas that have been subsided..mining subsidence" [(1) T50]. To be fair, if one of those witnesses was Mr. Wardell, then that person, I am told, is deceased. Apart from that, it was of some interest to note that no other expert that could possibly support the Applicant's case was called by the Applicant. 3.The impact of mining on the application area was also stated -- 24 of 36 -- - 25 - as "potential for accumulation of poor quality water" [para 29 Exhibit 11]. The material referred to in support thereof did not, in my view, satisfactorily address the impact that subsidence may have on ground water hydrology [see Exhibit 55 P 13]. The Wardens Court in the conduct of a mining lease application is vested with wide powers. Section 268(3) of the Act provides - "At a hearing pursuant to subsection (1) the Wardens Court shall take such evidence, shall hear such person and inform itself in such manner as it considers appropriate in order to determine the relative merits of the application, objections (if any) and other matters and shall not be bound by any rule of practice as to evidence." I considered Mr. Bourne (DPI Emerald) could be of assistance in determining the merits of this application. He provided a statement at the court's request [Exhibit 75] and a further statement at the request of the Objector [Exhibit 76]. Under Court Subpoena, Mr. Bourne appeared in court on 27 July 1995 and was cross examined. He holds a Degree in Agricultural Science and a Masters of Engineering, specializing in hydrology. He has 18 years experience in soil conservation issues in the Central Highlands and has specific experience in erosion control. His expertise was never challenged. This witness directed the court's attention, inter alia, to an area not specifically addressed by either the Applicant or the Objector. That is - "The central issue is not how much the land above the panels -- 25 of 36 -- - 26 - subsides, but how much the land above the pillars subsides ie how flat the pillars crush out. If the difference between the amount of subsidence over the panel and the amount of the crush out of the pillar is greater than 0.6 m there will be severe limitations to the workability of contour bays on the mined land." [Exhibit 76]. What evidence exists as to the extent of "crush out" over the pillars or, putting it another way, the "differential" - that is, the difference between subsidence at the lowest point and the pillar (after crush out) at its highest point? There is of course, no shortage of references to the fact of crush out [see, for example [(1) T38]]. In terms of specifics, the following passage appears in cross examination of Mr. Armstrong by Mr. Douglas QC - "... the subsidence will be something less than 1.8 metres............... it could be 1 metre it could be half a metre so the differential between that higher ground and that lowest point will be .....and I'm just picking over these figures here..will be of the order of say between 1 and 1.5 metres..and that's over a distance..if we're looking at 250 metre wide panels..that's over a distance of..from the centre line of the panel to the very highest point of a ridge..that'd give a distance of about 125 metres. "PERHAPS YOU'RE BETTER OFF USING THE TERM DROP RATHER THAN DEPTH AREN'T WE? "I was just going onto explain then............ that slope in between the highest point..and the lowest point in the centre of the panel is very similar to slopes that currently exist in the undulating farming country..of Gordon Downs "YES BUT THE PROBLEM IS MR. ARMSTRONG ISN'T IT THAT THE CONTOUR BANKS WHICH ARE CURRENTLY THERE HAVE BEEN BUILT WITH THE EXISTING UNDULATIONS IN MIND..NOT THE ONES WHICH WILL BE PRODUCED BY THE MINING? -- 26 of 36 -- - 27 - "That's correct." [(1) T45] The only other part of the material that I could find (apart from Bourne) that deals with any measurement of crush out is in Table 11-3 of Annexure 2 of the Affidavit of Mr. Armstrong [Exhibit 11]. An examination of the small print at the bottom of the page ("Subsidence over pillar") refers to a range of measurements in the Table of "0.1 - 1.5" metres. Mr. Bourne surmised from material provided to him by the Objector, that crush out over panels 101, 102 and 103 (Domain 1 Mining Lease 1978) was 50 centimetres [T34 - Bourne]. The Applicant's own witness Mr. Fawcett, gave evidence which I accept, as to the expected subsidence in the northern and southern part of Domain 5 and the northern and southern part of Domain 6 [Exhibit 22 P 18]. On the best case scenario for the Applicant, these figures do not paint an encouraging picture for Domain 5 nor for a sizeable portion of Domain 6 [T26 - Bourne]. I have considered carefully the evidence of Mr. Bourne and the contents of his two statements referred to above. Even if the argument is that only 10% of the application area would be lost to farming as a result of subsidence, that figure in itself is a scenario not based upon empirical data. Further, it takes no account of possible farming difficulties especially with respect to the use of farm machinery and the like [T30, Bourne]. Nor does it take into account the degree and extent of ponding that may occur on the application area as a result of subsidence and which the witness has already witnessed at Homestead Creek -- 27 of 36 -- - 28 - [T379 and T16,33 - Bourne]. Nor does it take into account the prospect of any change in creek direction and consequences that might follow [T34 - Bourne]. It is also true, in my view, that the test of any restoration of contour banks on Mining Lease 1978 will come when it is attempted to replace those banks running perpendicular to the panels in Domain 2 [T22 - Bourne]. Far from giving a ringing endorsement to the Applicant's theory of subsidence management, Mr. Bourne clearly, in my view, felt that further work and experimentation is necessary [T18 - Bourne]. At P 27 of the evidence of Mr. Bourne appears the following when cross examined by Mr. Douglas QC - "..YOUR ADVICE WOULD BE MR. BOURNE WOULDN'T IT..TO WAIT TO SEE WHAT HAPPENS IN THE EXISTING LEASE..BEFORE YOU CAN GIVE..A DEFINITIVE ANSWER ABOUT WHAT MAY HAPPEN ON THE EXTENSION AREA? "Yes..I'm I'm unable to give a definitive answer now....with more..experiments..yes..I would be able to give a more definitive answer." And at page 32 the following - "MR. BOURNE..IS WHAT YOU'RE REALLY SAYING THIS....... I HOPE THE...SYSTEMS I ENVISAGE WILL WORK..BUT I REALLY WON'T KNOW UNTIL I SEE IT IN PRACTICE? "That is correct yes. "AND ARE YOU REALLY SAYING THAT IT'S TOO EARLY YET TO SAY WHETHER..IT IS POSSIBLE TO RESTORE THE EXTENSION AREA..TO ITS EXISTING USE IN THE MAIN? -- 28 of 36 -- - 29 - "Yes I ... would have to say that without proof I do not categorically know..that we can restore it." I have considered carefully the evidence and the submissions of the Applicant and the Objector and Mr. Bourne. Notwithstanding the rigorous cross examination of the Objector's witnesses on the subject of subsidence, I found the concerns expressed by them, whether in writing or in evidence, not only honestly held but supported by credible argument. If I have not referred to each witness in detail it is for practical reasons. Similarly if I have not referred to each relevant exhibit, that too is for practical reasons. Needless to say, I have considered them all. A site inspection was carried out by the court on 1 June, 1995. A second site inspection was carried out on 25 September 1995 limited to the perpendicular banks on panels 201 and 202, and the northern part of Domain 5. In summary, on a consideration of all the evidence, I have concluded that the "subsidence management program" or the "subsidence management technique", so far as relates to the application area and this application, is presently little more than a theory. That is, the evidence offered by the Applicant has fallen far short of proving anything other than that there is a long way to go in establishing on the best evidence what one can reasonably expect on the application area or at least, part of it. As Mr. Bourne has said in his statement [Exhibit 76]- "There is no evidence, I am aware of, that proves that the -- 29 of 36 -- - 30 - installation and farming of contour banks on land subsided by longwall mining can be successfully carried out." Dr McGarity said pretty much the same thing - "The effects of these impacts on (sic) longwall mining on agricultural land are not well documented for Australian environment. Indeed a search of world literature has failed to provide any significant hard data which might usefully assist in providing a prediction as to what occur in the farming landscape of Gordon Downs." [Exhibit 55 - P 8]. There were a number of papers tendered by the Objector referred to above. I have considered those along with Exhibit 80, a paper entitled "Mining Subsidence Engineering". I note that the latter reports the impact that subsidence can have on flat land:- "In flat land, on the other hand, approximately half of all the mining damage costs arise from putting right interference with the natural flow of surface waters. The impact of mining on the natural waterway system, which appears locally as a relative rise in the ground water level and on a wider scale a reversible of the flow gradient, can in flat land occasion just as much damage in terms of cost as the effects of mining on structures of all kinds." [Para 12.1]. Those concerns have already been raised by the Objector. It is also a sobering thought and a demonstration perhaps of how high the stakes are that - "If the farm land has to be returned to permanent pasture, it represents a loss of valuable farming country. If other mines are to use the longwall technique to mine under farm land, the States agricultural farming resource will be significantly reduced" [Exhibit 76]. I am even in some doubt, that the Applicant is as confident of the outcome postulated by it as it would have the court believe. -- 30 of 36 -- - 31 - In answer to a question by Mr. Douglas QC as to the need for contour banks to be re-established this passage appears - "It will be redone..we plan to do that and there's no question that if it can be done it will be done..and it's standard practice in that agricultural land." [(1) P 45]. [My underlining]. There is one other observation that needs to be made. It goes to an important part of the Applicant's case. Paragraph 25 of the Affidavit of Mr. Armstrong reads in part - "Operations at Gordonstone show that the coal can be mined concurrently with agricultural activities occurring on the surface. During active subsidence the agricultural activities are somewhat restricted in that cultivation is not allowed, the land is stabilized by establishing pasture and cattle are excluded from the area for a short period of time, perhaps up to six months. After active subsidence has passed a particular area normal agricultural activities are reinstated on the surface. These procedures have been demonstrated too, and have been accepted by, the Environmental Branch of the Department of Minerals and Energy as well as the Local Department of Primary Industries." [My underlining]. It seems to me that the references to the Queensland Government (page 19) and DPI are interchangeable terms depending on the occasion. In his statement, [Exhibit 76] Mr. Bourne has pointed out - "The DPI has previously committed itself to working with Arco Coal to investigate ways of putting contour banks back into subsided land. To date we have simply assisted in the removal of existing banks prior to subsidence, itself an important anti-erosion task. Currently, no trials, to my knowledge have been conducted to show the efficiency of installing contour banks on mined land where the panel pillar subsidence differential is greater than 0.6 m." -- 31 of 36 -- - 32 - The above passage in my view, represents a more accurate picture of this state of affairs as at 27 July 1995. FUTURE COURSE OF ACTION The Objector has, to its credit, invested a great deal of time and money on the monitoring process and it has also removed the contour banks on Panel 201 in furtherance of its subsidence management program. In time, it may in fact be able to demonstrate that it actually works. The undisputed evidence is that the best evidence will derive from Panels 201 and following as to what can reasonably be expected to occur on the application area or at least, part of it. Even so, in my view, care will still be required for two reasons - Firstly:The differences in the differential between Panels 201 and 202 and the Panels at the northern part of Domain 5 will still be around .8 metres. Secondly:The contour banks as reshaped on Panels 201 and 202 will need to be tested for any greater vulnerability to a significant rainfall event. Perhaps this aspect ultimately will be a matter of design. Still, it is, in my view, an important point. It will be particularly important to ascertain if contour banks running perpendicular to the panel can be successfully restored. I note that perpendicular contour banks presently run across Panels 201 and 202. Mining on Panel 202 will be completed around August 1996. It may be possible to successfully restore -- 32 of 36 -- - 33 - these banks prior to completion of Panel 203, around June 1997. Time will tell. I have also considered the report and recommendation of the Mining Warden with respect to Mining Lease 1978 dated 17 July 1986. At that time, the Warden was sufficiently concerned as to recommend the creation of a Subsidence Board to advise the Minister, inter alia, on preventative and rehabilitative measures to be taken by the miner. My enquiries indicate no such Board was ever created. Perhaps there was a good reason for that course of action. However, given that future applications would have been clearly foreseeable at that time, one would have thought such a Board would have been an invaluable bank of information and data. I accept the cautionary approach adopted by Mr. Bourne referred to above. Moreover, even assuming for the sake of the argument all other issues between the Applicant and Objector were resolved in favour of the Applicant, I would still need to be satisfied as to the "prospective uses" of the application area as a pre-requisite to determining "appropriate land use" [Section 269(4)(m)]. Therefore, before proceeding any further in this matter, I have decided to inform myself pursuant to Section 268(3) of the Act as to the ongoing monitoring programme with respect to Panels 201 and following and in particular the restoration of the contour banks thereon including whether or not the land so restored can be farmed successfully with the current machinery -- 33 of 36 -- - 34 - in use. I do not believe there is any alternative in all of the circumstances, which I regard as distinguishing and unique. As a precautionary note, it should not be assumed the course of action adopted in this matter can, in the future, be sought and obtained at random. Unmeritorious and time consuming applications for adjournments may well be exposed to an order for costs on the Supreme Court scale. If reliance upon Section 268(3) was said to be incorrect, the order hereunder, in the exercise of my discretion would be and is the same and for the same reasons. [Sections 268(6) and 376(1)]. I expect the results of that ongoing monitoring to be presented in written form by the Applicant, and possibly Mr. Bourne, in open court where it will no doubt be subject to cross examination. The Objector shall be at liberty to adduce evidence on those results. Future site inspections can also be expected. This course of action is, without doubt, an inconvenience to the Objector given its timetable, although it does not propose to actually commence mining the application area until the year 2004. Given its assertions and committment with respect to the "subsidence management program" and the various awards tendered (not without some enthusiasm), the Applicant, if not overjoyed at this approach, should I expect be understanding. On the other hand, it must also be said that the Objector has no less an interest in future planning than the Applicant. Crop rotation and managing this organic farm requires considerable attention -- 34 of 36 -- - 35 - to future planning and a detailed knowledge of the fertility and fragility of the landscape and water shed areas. I might say in passing, that we can all be wise after the event. After every mining disaster, wisdom can be found in great abundance. The point is, it does not require any great imagination to consider, given the state of the evidence, the impact of a recommendation in favour of a grant at this point in time. Such a recommendation (with or without conditions) would probably be used as a precedent for other applications. All the while, of course, the clock would be ticking and the "proof of the pudding" may well turn out to be that organic agricultural farming as is presently understood on the application area, based on the emerging experience of Mining Lease No 1978, cannot be restored. By that time, any realistic hope of a review of a recommendation in favour of a grant may have long expired. It would then be left to the miner and I think a cynical owner to engage in perhaps lengthy and costly argument on compensation. Needless to say, farm planning would probably cease and the application area may, in the end, be lost to organic agricultural purposes forever. Reputations would be tarnished, credibility damaged and relations between the farmer and the miner in the Mining District of Emerald set back many years. It is my experience that even at the best of times, miners and land owners generally, view each other with great suspicion. Miners see land owners as avaricious. Land owners see miners as insensitive and untrustworthy. I doubt if that will ever change. In between, of course, is the Wardens Court. If any experience resides in -- 35 of 36 -- - 36 - this court at all, it must be, (all else aside) to at least note the potential for these types of problems to arise or to be exacerbated. In Carr v. Simnovec (1980) 26 SASR at p 268 King CJ said - "A Mining Warden is, in my opinion, entitled to bring to his task his knowledge of the industry generally, including what is generally known in the industry concerning its personalities and their relationships, associations and conflicts. He may make use of knowledge of such matters without proof." Those words speak for themselves. To give effect to the course of action referred to above (page 34), and in any event, I order as follows: 1.Mining Lease Application 70110 is adjourned sine die with liberty; 2.Costs are reserved. DATED at Brisbane this Twentieth day of October 1995. _______________________ J D COSTELLO ACTING MINING WARDEN -- 36 of 36 --