Independent Environmental Audit Rev 1 – Mt Arthur Coal Mine – November 2012 Date Revision Comment 20 March 2012 0 Independent Environmental Audit Report submitted to DP&I November 2012 1 Audit report incorporating feedback from the Department of Planning & Infrastructure trevor brown & associates - applied environmental management consultants 3 Forwood Crescent Bundanoon NSW 2578 tel: 02 4883 7877 mob: 0409 053 031 Page 1 Independent Environmental Audit Rev 1 – Mt Arthur Coal Mine – November 2012 DISTRIBUTION Copies Recipient Copies Recipient 6 Mt Arthur Coal Pty Ltd This document was prepared for the sole use of BHP Billiton Ltd and Mt Arthur Coal Pty Ltd and the regulatory agencies that are directly involved in this project, as the only intended beneficiaries of our work. No other party should rely on the information contained herein without the prior written consent of trevor brown & associates. by Tebcon Pty Limited Trading as: trevor brown & associates ABN: 23 084 906 963 3 Forwood Crescent Bundanoon NSW 2578 Australia Trevor Brown Principal Environmental Consultant/Auditor November 2012 trevor brown & associates - applied environmental management consultants 3 Forwood Crescent Bundanoon NSW 2578 tel: 02 4883 7877 mob: 0409 053 031 Page 2 Independent Environmental Audit Rev 1 – Mt Arthur Coal Mine – November 2012 Table of Contents Glossary .................................................................................................................................................. 6 Executive Summary ................................................................................................................................ 7 1.0 Introduction................................................................................................................................. 9 1.1 Background ............................................................................................................................. 9 1.2 Scope of Work ......................................................................................................................... 9 1.3 Structure of Report ................................................................................................................ 10 1.4 Compliance Tables .............................................................................................................. 10 2. Mt Arthur Coal Mine - Background ................................................................................................ 12 3. Project Approvals .......................................................................................................................... 14 3.1 Project Approval .................................................................................................................... 14 3.2 Environment Protection Licence ........................................................................................... 14 3.3 Mining Leases ....................................................................................................................... 15 4. Mt Arthur Coal Status – December 2011 ...................................................................................... 16 5. Review of Environmental Management ........................................................................................ 17 5.1 Environmental Management System .................................................................................... 17 5.1.1 Environmental Management System ................................................................................ 17 5.2 Environmental Management Strategy ................................................................................... 17 5.2.1 Environmental Management Strategy ............................................................................... 17 5.2.2 Conclusion ......................................................................................................................... 17 5.3 Environmental Monitoring Programs ..................................................................................... 17 5.3.1 Monitoring Programs ......................................................................................................... 17 5.3.2 Conclusion ......................................................................................................................... 18 5.4 Air Quality ............................................................................................................................. 18 5.4.1 Air Quality Management Plan ........................................................................................... 18 5.4.2 Air Quality Monitoring Program ......................................................................................... 19 5.4.3 Greenhouse Gas and Energy Efficiency Management Plan ............................................ 19 5.4.4 Air Quality Monitoring Results .......................................................................................... 20 5.4.5 Summary and Conclusion ............................................................................................. 22 5.5 Blasting ................................................................................................................................. 23 5.5.1 Blast Management Plan ................................................................................................... 23 5.5.2 Blast Monitoring Program ................................................................................................. 24 5.5.3 Blast Monitoring Results .................................................................................................. 24 5.5.4 Summary / Conclusion ...................................................................................................... 25 5.6 Erosion and Sediment Control ............................................................................................. 25 trevor brown & associates - applied environmental management consultants 3 Forwood Crescent Bundanoon NSW 2578 tel: 02 4883 7877 mob: 0409 053 031 Page 3 Independent Environmental Audit Rev 1 – Mt Arthur Coal Mine – November 2012 5.6.1 Erosion and Sediment Control Plan ................................................................................. 25 5.6.2 Summary/Conclusion ........................................................................................................ 28 5.7 Noise .................................................................................................................................... 28 5.7.1 Noise Management Plan .................................................................................................. 28 5.7.2 Noise Monitoring Program ............................................................................................... 28 5.7.3 Noise Monitoring Results ................................................................................................. 28 5.7.4 Summary / Conclusion ..................................................................................................... 30 5.8 Water Management .............................................................................................................. 30 5.8.1 Site Water Management Plan ........................................................................................... 30 5.8.2 Site Water Balance .......................................................................................................... 31 5.8.3 Surface Water Monitoring Program.................................................................................. 32 5.8.6 Surface Water Monitoring Results ................................................................................... 33 5.8.8 Groundwater Monitoring Program .................................................................................... 34 5.8.7 Surface and Groundwater Response Plan ...................................................................... 36 5.8.8 Summary / Conclusion ..................................................................................................... 36 5.9 Rehabilitation........................................................................................................................ 37 5.9.1 Rehabilitation Strategy ..................................................................................................... 37 5.9.2 Mt Arthur Coal Consolidation Project Land Management and Rehabilitation Progress ... 38 5.9.3 Audit Site Inspection Observations .................................................................................. 38 5.9.4 Suggestions for Rehabilitation Activities .......................................................................... 41 5.9.5 Summary / Conclusion ..................................................................................................... 43 5.10 Heritage Management ........................................................................................................... 43 5.10.1 Aboriginal Heritage ........................................................................................................ 43 5.10.3 European Heritage Management ................................................................................. 45 6. Conclusions and Recommendations ............................................................................................. 47 6.1 Conclusion ............................................................................................................................. 47 6.2 Summary of Recommendations ............................................................................................ 47 6.3 Summary of Suggestions ...................................................................................................... 48 Project Approval Schedule 5 condition 7(b)................................................................................... 50 trevor brown & associates - applied environmental management consultants 3 Forwood Crescent Bundanoon NSW 2578 tel: 02 4883 7877 mob: 0409 053 031 Page 4 Independent Environmental Audit Rev 1 – Mt Arthur Coal Mine – November 2012 TABLES Table 1: Expression of Compliance with Conditions of Approval 9 Table 2: Summary of Mt Arthur Coal Complex Development 12 Table 3: Current Mining Leases for Mt Arthur Coal 15 Table 4: Summary of Air Quality Compliance for Sep 2010 to Dec 2011 22 Table 5: Location of Blast Monitors for Overpressure and Ground Vibration 24 Table 6: Mt Arthur Coal Blast Monitoring Results January to September 2011 25 Table 7: Consistency of Mt Arthur Coal ESCP with Volume 2E - Mines and Quarries 26 Table 8: Summary of Noise Exceedences at NP9 - 28 September 2011 29 Table 9: Mt Arthur Coal Surface Water Monitoring Locations 33 Table 10: Groundwater Impact Assessment Criteria 37 FIGURES Figure 1: Mt Arthur Coal Complex Operational Areas 13 Figure 2: Mt Arthur Coal Complex Mining Leases 15 Figure 3: Air Quality Monitoring Locations 19 Figure 4: Noise Monitoring Locations 30 Figure 5: Mt Arthur Coal Water Management System Schematic 32 Figure 6: Surface Water Monitoring Locations 34 Figure 7: Groundwater Monitoring Locations 36 Figure 8: Macleans Hill Consolidation Project Open Cut disturbance area 45 APPENDIX 1 Consultation Letters ATTACHMENTS Attachment A Project Approval 09_0062 Attachment B1 Statement of Commitments Project Approval Attachment B2 Environmental Assessment Commitments Attachment C Environment Protection Licence 11457 Attachment D Mining Leases trevor brown & associates - applied environmental management consultants 3 Forwood Crescent Bundanoon NSW 2578 tel: 02 4883 7877 mob: 0409 053 031 Page 5 Independent Environmental Audit Rev 1 – Mt Arthur Coal Mine – November 2012 Glossary AEMR Annual Environmental Management Report Annual Return Annual Return required under the EPL Annual Review Review required under Project Approval Schedule 5 condition 3 BCA Building Code of Australia CCC Community Consultative Committee DEC Department of Environment and Conservation (now Office of Environment and Heritage) DECC Department of Environmental and Climate Change (now Office of Environment and Heritage) DECCW Department of Environment, Climate Change and Water (now Office of Environment and Heritage) Department Department of Planning (as defined in the Project Approval definitions) DI&I Department of Industry and Investment Director-General Director-General of the Department (i.e. Department of Planning and Infrastructure, or delegate) DoP Department of Planning (now Department of Planning and Infrastructure) DP&I Department of Planning and Infrastructure EA Environmental Assessment – “Mt Arthur Coal Consolidation Project Environmental Assessment” (6 volumes) dated November 2009 EIS Environmental Impact Statement EP&A Act Environmental Planning and Assessment Act 1979 EP&A Regulation Environmental Planning and Assessment Regulation 2000 EPL Environmental Protection Licence HRSTS Hunter River Salinity Trading Scheme MCoA Minister’s Condition of Approval Mine water Water that accumulates within active mining areas and mine drainage Mining operations Includes all coal extraction, processing, handling, storage and transportation activities Minister Minister for Planning, or delegate Mitigation Activities associated with reducing the impacts of the project MSC Muswellbrook Shire Council Mt Arthur Mine The combined mine operations of the project (including Mt Arthur North mine, Bayswater Complex No.2 mine, Bayswater No.3 mine, and the South Pit Extension Project) and the Mt Arthur Underground Project. NOW New South Wales Office of Water Project Mt Arthur Coal Mine Open Cut Consolidation Project POEO Act Protection of the Environment Operations Act 1997 Project Approval Project Approval 09_0062 Mt Arthur Coal Mine - Open Cut Consolidation Project Proponent Hunter Valley Energy Coal Pty Ltd trevor brown & associates - applied environmental management consultants 3 Forwood Crescent Bundanoon NSW 2578 tel: 02 4883 7877 mob: 0409 053 031 Page 6 Independent Environmental Audit Rev 1 – Mt Arthur Coal Mine – November 2012 Executive Summary The Independent Environmental Audit of the Mt Arthur Coal Mine - Open Cut Consolidation Project operations and activities was conducted by Trevor Brown & Associates during December 2011 and January 2012, to satisfy the requirements of Project Approval 09_0062, Schedule 5 condition 9. It should be noted that the Mt Arthur Underground development had not commenced at the time of the audit, therefore statements of compliance are related only to the conditions and commitments of Project Approval 09_0062. The Management Plans required by the Project Approval were prepared by Mt Arthur Coal and submitted to DP&I in accordance with the timing required by the specific conditions and the requirements of Project Approval Schedule 5 condition 2. Mt Arthur Coal received approval from DP&I for the Air Quality Management Plan, Air Quality Monitoring Program, Noise Management Plan, Noise Monitoring Program, and Road Closure Management Plan on 6 June 2012; Aboriginal Heritage Management Plan, Site Water Balance, Erosion and Sediment Control Plan, Surface Water Monitoring Program, Groundwater Monitoring Program, and Surface Water and Groundwater Response Plan on 20 August 2012; Site Water Management Plan on 23 August 2012, European Heritage Management Plan and Environmental Management Strategy on 18 September 2012. The Independent Environmental Audit of the Mt Arthur Coal Consolidated Project operations has demonstrated a high degree of compliance with the Project Approval 09_0062 conditions and Statement of Commitments and Environmental Assessment commitments, Environment Protection Licence No. 11457 and the Mining Lease conditions of approval: Environmental Management Strategy The Mt Arthur Coal Environmental Management System and Environmental Management Strategy (required under Project Approval Schedule 5 condition 1), provides a sound basis for the management of environmental aspects of the Mt Arthur Coal Consolidated Project. Air Quality The independent audit of air quality aspects for the Mt Arthur Coal operations and environmental management related to air quality were progressing as predicted, and review of the monitoring results from September 2010 to January 2012 demonstrated compliance with the Project Approval Schedule 3 condition 21 criteria and the air dispersion modelling reported in the Mt Arthur Coal Mine Open Cut Consolidation Project Environmental Assessment 2009. Blasting The implementation of controls proposed in the Blast Management Plan and undertaking a Pre-Blast Environmental Assessment are considered to be consistent with best practice blast management procedures. Blast monitoring demonstrated compliance of the Mt Arthur Coal operations with the overpressure and ground vibration criteria in Project Approval Schedule 3 condition 10 and EPL 11457 condition L6.2 and L6.3, on all but two occasions between 2011 to June 2012. Noise Management The independent audit of noise conditions, found that Mt Arthur Coal is generally in compliance with the requirements of Project Approval Schedule 3 conditions 3.1 to 3.9 and associated documents. Site Water Management The Water Management Plan for the Mt Arthur Coal operations satisfies the Project Approval Schedule 3 condition 29 and includes supplementary plans for Site Water Balance, Erosion and trevor brown & associates - applied environmental management consultants 3 Forwood Crescent Bundanoon NSW 2578 tel: 02 4883 7877 mob: 0409 053 031 Page 7 Independent Environmental Audit Rev 1 – Mt Arthur Coal Mine – November 2012 Sediment Control, Surface Water Monitoring Program, Groundwater Monitoring Program and a Surface and Ground Water Response Plan. The Water Management Plan outlines water management system to effectively source, divert, store, use, monitor and reticulate water on site. Erosion and Sediment Control It is recommended that reference to other relevant management plans/sections be inserted into the Erosion and Sediment Control Plan to demonstrate consistency with the components of Managing Urban Stormwater: Soils and Construction, Volume2E Mines and Quarries Appendix C. Surface Water Monitoring The surface water monitoring results from each Mt Arthur Coal sampling point, exhibit relatively consistent water quality trends over time for each location. The water quality over time does not indicate adverse impacts from mining on surface water quality around the mine site. Groundwater The groundwater monitoring results, although exhibiting variability between piezometer locations have not indicated adverse groundwater quality trends caused by the Mt Arthur Coal mining activities. Rehabilitation Overall the Mt Arthur Coal Complex rehabilitation activities are being addressed progressively and a number of suggestions are provided for consideration by Mt Arthur Coal for improvement of outcomes on the finished areas of overburden emplacement where contouring and topsoil application is occurring. Achievement of the rehabilitation objectives provided in the Rehabilitation Strategy require measureable closure criteria and Mt Arthur Coal has yet to develop measureable criteria and/or undertake an assessment of rehabilitation performance against measureable closure criteria. The Rehabilitation Management Plan that is due to be submitted to DP&I by 31 March 2012 will include the process to meet the objectives of the Rehabilitation Strategy. A number of recommendations are provided for consideration in relation to potentially improving rehabilitation outcomes on the Mt Arthur Coal site. Heritage The management of Aboriginal cultural affairs and cultural heritage items by Mt Arthur Coal has occurred in accordance with the Project Approval conditions, Statement of Commitments and Environmental Assessment commitments. The Aboriginal Heritage Management Plan and the Macleans Hill Cultural Heritage Management Plan provide a sound basis for the protection of Aboriginal cultural heritage within the Mt Arthur Coal Consolidation Project boundaries. Management of European heritage items have been conducted by Mt Arthur Coal in accordance with the Project Approval conditions and commitments. The comprehensive European Heritage Management Plan provides sound management principles for the protection of the European heritage items in the vicinity of Mt Arthur Coal operations. trevor brown & associates - applied environmental management consultants 3 Forwood Crescent Bundanoon NSW 2578 tel: 02 4883 7877 mob: 0409 053 031 Page 8 Independent Environmental Audit Rev 1 – Mt Arthur Coal Mine – November 2012 1.0 Introduction 1.1 Background The Project Approval 09_0062 for the Mt Arthur Coal Consolidation Project (the Project) was granted on 24 September 2010. The Project Approval requires an Independent Environmental Audit to be conducted by the end of December 2011. To satisfy Project Approval (09_0062) Schedule 5 condition 9, this Independent Environmental Audit was commissioned by BHP Billiton Mt Arthur Coal and conducted by Trevor Brown &Associates during December 2011 and January 2012: INDEPENDENT ENVIRONMENTAL AUDIT 9. By the end of December 2011, and every 3 years thereafter, unless the Director-General directs otherwise, the Proponent shall commission and pay the full cost of an Independent Environmental Audit of the project. This audit must: (a) be conducted by a suitably qualified, experienced and independent team of experts whose appointment has been endorsed by the Director-General; (b) include consultation with the relevant agencies; (c) assess the environmental performance of the project and assess whether it is complying with the requirements in this approval and any relevant EPL or Mining Lease (including any assessment, plan or program required under these approvals); (d) review the adequacy of strategies, plans or programs required under the abovementioned approvals; and (e) recommend appropriate measures or actions to improve the environmental performance of the project, and/or any assessment, plan or program required under the abovementioned approvals. The Independent Environmental Audit site inspections and documentation assessment for compliance with the Project Approval and other environmental approvals for the Mt Arthur Coal Mine – Open Cut Consolidation Project, were carried out by a team of suitable qualified and experienced and independent experts endorsed by the Director-General on 21 November 2011. 1.2 Scope of Work The Independent Environmental Audit was conducted generally in accordance with the Australian/New Zealand Standards ISO 19011:2002 – Guidelines for Quality and/or Environmental Systems Auditing. The scope of work for the independent environmental audit of the Mt Arthur Coal Mine Consolidated Project included the following components:  review of compliance with Project Approval 09_0062 conditions and other approvals for the period 24 September 2010 and 31 December 2011;  conduct site inspections by the qualified, experienced and independent experts and review on-site documentation and monitoring data for the Project, relevant to the audit;  discussion of the Project Approval and other conditions for the Project with Mt Arthur Coal staff;  assessment of environmental performance of Mt Arthur Coal with the requirements in this Project Approval, Environment Protection Licence and Mining Lease conditions (including any assessments, plans or programs required under these consents/approvals);  review of the adequacy of strategies, plans or programs prepared under the abovementioned consents/approval;  provision of recommendations if considered necessary for measures or actions to improve environmental performance of the development, and/or any assessment, plan or program required under the project approvals; and  preparation of the Independent Environmental Audit Report providing assessment of compliance against each approval condition and provision of recommendations or actions trevor brown & associates - applied environmental management consultants 3 Forwood Crescent Bundanoon NSW 2578 tel: 02 4883 7877 mob: 0409 053 031 Page 9 Independent Environmental Audit Rev 1 – Mt Arthur Coal Mine – November 2012 where considered appropriate to improve the environmental performance of the development, and/or the environmental management and monitoring systems. It should be noted that the Mt Arthur Underground Project (Project Approval 06_0091) had not commenced at the time of the audit and was not therefore included in the audit scope of works. Statements of compliance reported in this audit report are only related to the conditions and commitments of Project Approval 09_0062. 1.3 Structure of Report This Independent Environmental Audit Report has been prepared to provide an assessment of the environmental performance of the project and assess whether the Project is complying with the conditional requirements of the Project Approval, EPL and Mining Leases. Tabulated comments on each condition of approval are included within the Attachments to this Independent Environmental Audit Report. The Independent Audit Report sections are: Glossary Executive Summary Section 1 Introduction – Background and Scope of Work for the Independent Environmental Audit Section 2 Mt Arthur Coal Background – Summary of Mt Arthur Coal Complex historical development Section 3 Project Approvals – Current Project Approval, Environment Protection Licence and Mining Leases Section 4 Mt Arthur Coal Status – short description of Mt Arthur Coal Mine Complex development as at December 2011 Section 5 Review of Environmental Management – assessment of the environmental performance of the project and status of the requirements of Project Approval, Environment Protection Licence and Mining Leases for the period of September 2010 to December 2011 Section 6 Conclusions and Recommendations Attachment A Project Approval 09_0062 Table of Conditions and Compliance Attachment B1 Statement of Commitments Mt Arthur Coal Mine – Open Cut Consolidation Project Table of Conditions and Compliance Attachment B2 Environmental Assessment Commitments Mt Arthur Coal Mine Consolidation Project Table of Conditions and Compliance Attachment C Environment Protection Licence No.11457 Table of Conditions and Compliance Attachment D Mining Leases - Table of Conditions and Compliance 1.4 Compliance Tables This audit assessed the activities for compliance with the intent of the conditions via site inspections and verification of relevant documentation related to the conditions as provided by Mt Arthur Coal. The status of compliance of the conditions expressed in the Attachment Tables for the Project Approval, Statement of Commitments, Environmental Assessment Commitments, EPL and Mining Leases is described in Table 1. trevor brown & associates - applied environmental management consultants 3 Forwood Crescent Bundanoon NSW 2578 tel: 02 4883 7877 mob: 0409 053 031 Page 10