WCL Russell Vale Colliery

From Global Energy Monitor

'The WCL Russell Vale Colliery is one of the oldest coal mines in Australia.[1] The mine was put on care and maintenance in 2015, but its owner, Wollongong Coal Limited, is attempting to expand the mine and expand the mine life for 5 more years.[2]

The expansion, known as the Russell Vale Underground Expansion Revised Project, is located within the catchment of the Cataract Reservoir, which provides drinking water for Sydney, and lies within the Metropolitan Special Area, a restricted-access area designated to protect Sydney’s drinking-water catchments.[3] This has increased the visibility and controversy surrounding the proposed expansion.

Location

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Project Details

  • Sponsor:
  • Parent Company: Wollongong Coal Limited[2]
  • Location: the Southern Coalfield, approximately 8 km north of Wollongong and 70 km south of Sydney in New South Wales[2]
  • GPS Coordinates: -34.35566, 150.89169 (exact)[4]
  • Status: The original colliery has been retired since 2015, but there are proposals for a five-year mine expansion.[5]
  • Production Capacity: The expansion would allow for 1 mtpa[5]
  • Total Resource: Total coking coal resources within the Bulli and Wongawilli coals at Russell Vale were estimated at 314.9 Mt, including 92 Mt of proved and probable reserves.[2]
  • Mineable Reserves:
  • Coal type: hard coking coal[6]
  • Mine Size: 6,421 hectare area[7]
  • Mine Type: The expansion will operated using underground bord-and-pillar extraction.[3]
  • Start Year: 1887[8]
  • Source of Financing:

Background

The WCL Russell Vale Colliery first opened in 1887 under the name South Bulli Colliery.[8] The colliery was continuously renamed and shuffled around from owner to owner throughout the 20th century and early 21st century, when it was bought by Gujarat NRE in 2005 and renamed NRE No. 1 Colliery. In 2014, Gujarat NRE Coking Coal was renamed Wollongong Coal Limited, and NRE No. 1 Colliery was renamed the Russell Vale Colliery.[8]

Throughout its time of operation, coal was extracted from the Wongawilli, Bulli and Balgownie seams, though extraction from the Balgownie coal seam no longer takes place.[9] The coal produced was then exported via Port Kembla Coal Terminal.[2] Since the 1960s, mining methods have included continuous mining and longwall extraction.[9]

Mining operations ceased in September 2015 due to economic downturn and difficult operating conditions, and the mine has been in care and maintenance ever since.

“Wollongong Coal has been facing a tough operating environment for some time including ongoing delays in the approval of the company’s Underground Expansion Project (UEP) and significant financial losses,” Wollongong Coal Chief Executive Officer, Milind Oza said in a news release in 2015.[10]

Russell Vale Underground Expansion Revised Project

Wollongong Coal has been attempting to get an expansion granted for the Russell Vale mine since 2009. It has undergone several iterations, including a reduction in the total amount of coal the company aims to recover and the number of years they plan to operate in the area. These adjustments were made to reduce the potential adverse effects of mining.[5]

The original plan sought to extract 31 Mt of coal over 18 years, and implement new longwall panels.[2] The most current plan, presented in 2019, will only extract 3.7 Mt of coal over 5 years, and will not be using longwall mining. Instead, the mine will be based on “a non-caving first workings mining system that will result in negligible subsidence.”[5]

The company wrote that the omission of longwall mining was a change made to reduce the potential impact of the subsidence-related mining impacts on groundwater, surface water and biodiversity.[5]

The submissions for all Underground Expansion Plan (UEP) reports were completed in mid-January.[11] A Mining Monthly article published in May 2020 wrote that Wollongong Coal is “expecting the New South Wales Independent Planning Commission to convene this month to consider its application for its Russell Vale underground expansion plan after submissions were completed in mid-January.”[12]

Potential for Expansion’s Negative Environmental Impact

In addition to being located in the Cataract Reservoir catchment, which supplies drinking water to Sydney, the expansion project is located on the Woronora Plateau, which supports ecosystems such as Coastal Upland Swamps. These swamps are listed as Endangered Ecological Communities (EECs) under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) and the New South Wales Threatened Species Conservation Act 1995 (TSC Act).[3]

The New South Wales Department of Planning, Industry and Environment requested advice from the Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development (the IESC) on the expansion project. The IESC regularly provides insight on the potential impact of coal projects on water resources.

The IESC’s final report, released March 5, 2020, found that the key potential impacts from the Russell Vale Underground Expansion Project include “irreversible changes in EPBC Act-listed swamps, impacts on in-stream and riparian environments and water-dependent flora and fauna … as a result of pillar collapse, potential long-term impacts to groundwater levels and quality post-mining,” and an excess of copper, zinc and nickel levels in the nearby Bellambi Creek.[3]

Wollongong’s Financial Struggles

In June 2017, the NSW Resources Regulator began prosecution proceedings against Wollongong Coal for failing to pay required rents and levies totalling $25,153.33 on time.[13] In March 2018, the NSW Resources Regulator took up the same charge against Wollongong Coal, this time for failing to pay $28,591.93 on time.[14]

In July 2019, Wollongong Coal reported a loss of $379 million for the year and with liabilities of more than $1 billion.[15] In September 2019, the company reported it would cost them $215 million to rehabilitate the Russell Vale mine if they didn’t get permission to undergo the expansion — money the company didn’t have.[16] The NSW Government held a $7.5 million rehabilitation bond — a financial strategy meant to ensure mines will be rehabilitated even if a mining company is in a precarious financial position — from Wollongong Coal for the Russell Vale mine. But $7.5 million could not meet the estimated clean-up cost.

In December 2019, Australian anti-coal mining group Lock the Gate spokesperson Nic Clyde warned against allowing Wollongong Coal to continue operating in the area.[17]

“The NSW Government only holds a $7.5 million rehabilitation bond for the Russell Vale mine,” Clyde said in a December 2019 press release by Lock the Gate. “If Wollongong Coal declared bankruptcy tomorrow, how would the cleanup of this mine under Sydney’s drinking water catchment, on the edge of suburban Wollongong, be paid for?”

“Taxpayers should be extremely concerned about the financial state of this company and the cost of cleaning up its mess,” Clyde added.

Lock the Gate reported in December 2019 that the NSW Resources Regulator updated the calculation of the rehabilitation bond to $12.4 million, which still would not meet the estimated $215 million in clean-up costs.[17]

  1. "Wollongong Coal: History", Wollongong Coal website, accessed May 2020
  2. 2.0 2.1 2.2 2.3 2.4 2.5 "Resource Assessment for the Sydney Basin bioregion", Australian Government website, accessed May 2020.
  3. 3.0 3.1 3.2 3.3 "Russell Vale Colliery Underground Expansion Project Advice", Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development, 5 March 2020.
  4. "Bellpac No. 1 Coal Mine Australia", Global Energy Observatory, accessed May 2020.
  5. 5.0 5.1 5.2 5.3 5.4 "Wollongong Coal Limited Project Information Sheet RVC UEP May 2019", Wollongong Coal website, May 2019
  6. "Russell Vale Colliery – Underground Expansion Project: Review Report", NSW Planning Assessment Commission, 2 April 2015.
  7. "NRE NO1", Mining Link, accessed May 2020.
  8. 8.0 8.1 8.2 "South Bulli Colliery", Illawarra Coal: The Unofficial History of Mining in the Illawarra, March 2016.
  9. 9.0 9.1 "Our Assets", Wollongong Coal website, accessed May 2020.
  10. "MEDIA RELEASE: Proposed operational changes at Russell Vale Colliery", Wollongong Coal, 1 September 2015.
  11. "Wollongong Coal : Quarterly Report - Jan - Mar 2020", MarketScreener, 30 April 2020.
  12. "Wollongong Coal awaits IPC decision for Russell Vale expansion", Australia's Mining Monthly, 4 May 2020.
  13. "Resources Regulator announces prosecution proceedings against two Wollongong coal companies", NSW Government, 23 June 2017.
  14. "Resources Regulator prosecutes Wollongong coal companies", NSW Government, 8 March 2018.
  15. Ben Langford, "Wollongong Coal has a $1billion debt problem - auditor", Illawarra Mercury, 27 July 2019
  16. Ben Langford, "Wollongong Coal claims $215m rehab bill - after a loss of $379 million", Illawarra Mercury, 12 September 2019
  17. 17.0 17.1 "Russell Vale risk: $202 million rehabilitation shortfall exposes NSW taxpayers", Lock the Gate Alliance, 9 December 2019