Below we present for your information an assortment of short articles prepared by members of Friends of Felton Inc. The material remains the property of Friends of Felton and should only be reproduced with due acknowledgements.


The Impacts of Mining are Cumulative

June 2011.

The mining industry never tires of telling us what a tiny area of land it takes up.  The Queensland Resources Council claims that just 0.1% of the state is 'under mining lease'.  Excluding islands, Queensland is 1,723,936 square km.  One one-thousandth of this is in fact 1,723 square km or 172,300 hectares; not exactly a small area if the land itself is already being used for something else and the affected community is opposed to being moved-on.  Inland Australia is not a great empty space waiting for a benevolent developer; settlement density is more-or-less proportional the land's productive capacity, and the scope for co-existence between industries wanting access to the same land is extremely limited. 

Regardless, the area of land currently being mined is a poor indicator of the spatial impact of mining, both now and time hence, after all of the mineral resources have been extracted.  Interested parties wanting a comprehensive picture of mining's footprint would have to be supplied with the following data

  • The location and area of land already mined-out and its status (eg, wasteland, rehabilitated, etc)
  • The location and area of land currently being mined and its estimated productive life as a mine
  • The location and area of land being explored with a view to it being mined in the future; special note should be made of areas being explored for more than one resource eg, coal, gas, bauxite
  • An aggregation of the above showing the cumulative footprint of the mining industry over its projected life
  • Some objective estimate of the externalities flowing from particular mining activities that act to increase the effective size of the footprint eg, dust, noise, congestion, water pollution, etc

Using the area of land currently being mined as a proxy for the extent of impacts being inflicted on rural communities and the natural environment is deception plain and simple.  It is not generally appreciated that 80% of Queensland is already covered by mining exploration permits.  Heavily settled farming areas likely the Darling Downs are blanketed from top to bottom by such exploration permits.  If mining is allowed to develop in a manner suggested by the number and extent of exploration permits, it is not inconceivable that most of Queensland's best farming land could be lost to massive holes in the ground. 

When open cut mining is allowed to take the place of cropping - as has happened at Acland just outside Toowoomba - there is no after-life; feasible methods of rehabilitating the land have not yet been discovered.  This means that mining's effective footprint just gets bigger and bigger.  Eventually the area actually being mined will be dwarfed by the area already mined - and left behind as 'wasteland'.  Without intervention, the cumulative area lost to mining will eventually exceed the area left for food production, natural habitat and habitation, enjoyment and other options yet to be specified. 

 We should not be arguing about the veracity of such a prospect.  As collective custodians of the land we should be concentrating our energies on how we achieve balance; how we can have our cake and eat it too.  Unfortunately the Queensland Resources Council wants to keep the issue of Strategic Cropping Land suspended in negotiations.  In their October 2010 submission ('protecting Queensland's strategic cropping land') QRC says 'With an estimated 2.2% of Queensland's land mass dedicated to cropping and less than 0.1% under mining lease, QRC can see no reason why Queensland's two premier industries cannot continue to operate side by side'.  Operating 'side by side' would be okay - provided this includes adequate buffer zones in the case of high impact developments.  The trouble is the miners want to operate INSIDE AND ON TOP OF agriculture's prescribed area.  Without the imposition of absolute barriers to entry, they would take the lot.

Queensland's proposed strategic cropping land legislation will stop mining from entering a small proportion of the state; up to 4% of the state's land mass.  This intervention is not just about food security.  It's about recognising the need to positively address a plethora of complex interactions that will affect the future character and performance of the whole state.  Some of the influences that will be 'picked-up' by the strategic cropping land provisions include

  • The potential of mining to excessively dominate the physical, social, economic and political landscape - as evidenced by the proportion of Queensland already covered by mining exploration permits;
  • The fact that areas with strategic cropping land tend to be closely settled, which makes them socially incompatible with particular mining activities - with open cut coal or bauxite mining being prime examples
  • The demonstrative inability of the EIS methodology to adequately protect strategic cropping land and implicitly community preferences
  • The destructive nature of open cut mining - which closes off the option of land rehabilitation that would otherwise allow its return to agriculture at some stage in the future
  • The local and global externalities generated by mining which remain unpriced leaving those who suffer the consequences without meaningful compensation
  • The inability of individual farmers to resist the monetary and legal pressures being exerted by miners wanting access to land
  • The ability of mining, as an industry, to operate effectively and efficiently with the access it will retain to land not classifiable as strategic cropping land
  • The need for the Queensland Government to take direct action to reduce GHG emissions - thereby complementing the proposed carbon tax.

Several of the outcomes nominated above apply at a macro level.  This means strategic cropping land legislation will deliver greater balance across the full spectrum of social, economic and political imperatives that apply to good land use planning.  The micro-level application and rationale for the strategic cropping land legislation applies to the land itself and by extension to the communities that depend on the land.  The record of suffering and indignities inflicted by coal mining on households in the Hunter Valley should signal to state governments throughout Australia how not to treat their citizens.  

 Given that only 4% of Queensland is covered by cropping land, all of this area should be protected against non-essential developments.  Anyone doubting the seriousness of global 'food security' should read The Coming Famine by Julian Cribb (CSIRO publishing, 2010).  QRC has tried to argue that even by 2020 the area of Darling Downs land occupied by mining will have an infinitesimal effect on food production and says there are other more critical issues that need to be addressed on a domestic and global scale to tackle the global supply and demand imbalance.  These include sustainable population policies, falling productivity in the agricultural sector, soil degradation, labour shortages, water availability and the possibility of more frequent and severe droughts.  Ironically, the most effective way of addressing 'falling productivity in the agricultural sector, soil degradation, labour shortages, water availability and the possibility of more frequent and severe droughts' on the Darling Downs would be applying the brakes to coal mining - since it materially contributes to all such problems.  'Balanced development' would allow existing coal mines to continue but it would most definitely stop new mines from attempting to establish on or near land suitable for cropping.

There is much that the mining industry could do to win the hearts and minds of rural Queensland.  It could start by focusing activities in the more sparsely settled parts of the state where the creation of secondary benefits will be larger and more appreciated.  Implicitly, the mining industry needs to show us that it acknowledges, understands and respects local sensibilities and needs.  If it wants to become positively heroic, the mining industry should use its considerable political influence to get some serious investment in regional infrastructure.  Why not demand that a significant portion of takings from the resources tax be spent on upgrading the Warrego Highway and constructing the Toowoomba bypass?  A lot of country folk would join such a campaign.

-0O0-


May 2010.                               Governing the Two Speed Economy

Everyone knows that our state governments and the mining industry hold hands - especially in public.  Their blissful relationship stems from mutual advantage.  Mining royalties are paid directly to state governments to spend as they wish and in return the regulatory processes that surround licensing are kept suitably complex but ultimately impotent.  The whole beautiful mess is kept in place by confusion, procrastination and spin.

 

But now the commonwealth is threatening to upset the apple cart by introducing a large overarching tax - that will make the state royalties pale into insignificance.  To make matters worse, the commonwealth will offer little in return - certainly not business as usual.  The commonwealth says it wants to spread the wealth about but there is only one good reason to impose a large resources tax: and that's to slow down the rush.  Getting control of the rate at which we rip resources out of the earth could do more to control our emissions than any tax on carbon.  Below we identify and discuss some of the common sense reasons for slowing the rate of extraction, using coal mining as an example.

 

Finding the public interest:      Sooner or later the economic engine has got to slow to an optimal rate - one that equates inputs and outputs and assures life on earth.  Vesting all taxing powers with the commonwealth would take us closer to the optimum by: 1) divorcing the licensing of mining activity from the collection of royalties and 2) re-defining the status of mining royalties for the purposes of reducing their capacity to corrupt and distort good governance.  Such reforms would immediately open the way to defining the land areas that can be used for mining.  Currently all land defined as available is treated the same way regardless of significant differences.  It is patently obvious that land which is closely settled, highly productive in agriculture and a popular choice for life-style living, should not be made available to such a destructive use as coal mining.

 

It's a finite resource:  Although Australia has vast reserves of coal they are finite.  Whoever controls licensing can control the location and rate of extraction.  So why not a strategic approach to extraction that has the effect of confining all mining activity to less populated areas and leaving something in the ground for future generations?  Presumably the value of coal left in the ground will increase in real terms as world-wide reserves become scarcer and better uses are discovered and brought on stream.

 

When smaller is better:  The 'attractants' to coal mining such as royalties revenue, jobs etc are all proportional to size but what about the negatives of size?  The larger the coal mining industry gets the more pressure it puts on the regulatory system, the more it pollutes the local and global environment, the more competition it creates for scarce water resources, the more wages inflation it induces, the greater the demands on infrastructure and the bigger the challenges to social and economic wellbeing.  Why not aspire to an optimal rate of extraction rather than more, more, more all the time?  Why not start planning now for a slower-growth future (inevitable if the species is to survive) rather than trying to get 'everything' done in record time?

 

Crowding out of the alternatives:        Government policy that allows the establishment of coal mines does not yet make direct and complete comparisons between alternative energy sources - with vastly different externality and sustainability profiles.  This has the effect of making coal look cheaper than it really is.  The end result is crowding out of more sustainable forms of energy generation.  The excessive emphasis on coal exporting is also crowding out other industries at logistical bottlenecks - most particularly at sea ports.

 

Not all coal has to be mined:  Coal can only be mined in situ - but that doesn't give miners an automatic right to access coal wherever it occurs.  Certainly the benefits of taking land for mining do not compare with taking land for critical forms of public infrastructure that can benefit 'everyone forever' such as a national highway.  Governments seem to have gifted the mining industry an importance rating it doesn't deserve.  Certainly the receipt of mining royalties has distorted how state governments view the mining industry and administer it - at the expense of less glamorous but more sustainable sectors.

-oOo-


1. The Political Economy of Mining

Before it became so big, rich and powerful it didn't matter too much that the rules and regulations surrounding the mining industry in this country were flawed.  Now that all the state governments are mired in debt and desperate for tax revenue, it matters a lot.  Any landholder still sitting on top of mineral riches is in danger of being squashed by stampeding explorers.  The core problem is that state governments control mining rights while being the recipient of royalties directly related to mining activity.  This situation has perpetuated a regulatory regime that gives miners 'easy' access to land.

Historically, the tax revenue stemming from mining has come to state treasuries without ties.  This has allowed the money to be spent in the state capital cities while the remote area communities (where the mining activity occurs) get virtually nothing.  In essence, the place from which the wealth actually comes suffers all of the externalities (inflicted by the mining activity) but has no natural rights to the taxation dispersals.  Only in WA has this injustice been recognised and redressed.

Currently, authority for the granting of mining lease applications rests with the state government minister responsible for mining.  This situation is itself flawed because the minister for mining will tend to be pro-mining and will be deeply swayed by the perceived financial interests of his or her state.  In this decade, 'state interests' have been overwhelmingly about capital city infrastructure.

The minister's decision to grant or refuse a particular application to mine is primarily based on the findings and recommendations of an Environmental Impact Study.  The terms of reference presently applying to a mining EIS do not consider or make recommendations about the distribution of tax revenues stemming from the associated mining activity.  Indeed the main focus of the current EIS is the immediate physical environment.  Rarely, in practice, does an EIS predict that a mining proposal would result in 'unacceptable impacts'; the only basis by which an application might be reasonably rejected.  The reason for this situation is simple.  To start with the EIS consultant is contracted by the project proponent and is essentially paid to come-up with the 'right answer'.  The most critical facet of the right answer is an 'impact mitigation strategy', which typically finds that 'everything will be fine'.  Presented with a report purporting to be professional (no-one would go so far as to call it 'independent') the responsible minister will have little difficulty finding the project 'environmentally acceptable'.  Everyone will have noticed that as mineral prices have increased, the mining industry's capacity to invade relatively favoured and more densely settled agricultural areas has also increased.

A huge effort will be needed to remove the inequities that are inherent to the current system of licensing and taxing the mining sector.  (How do you get state governments to change a system that is so much to their liking?)  The most urgent need is for planning that limits the land available to mining activities (see paper titled 'The Queensland Famlands Protection Index').  For the sake of equity, state governments should radically reform the distribution of tax revenues taken from mining.  As is the case in WA, a fixed proportion of the total taxes should be returned to rural and remote areas in the form of higher quality community services and more accessible economic infrastructure.

While better land use planning is seen as the number one imperative, other reforms should be introduced to give more protection to rural communities.  For example, the terms of reference applying to the EIS could be broadened and made more prescriptive with special reference to community preferences.  Furthermore, Level 1 mines should have to get approval from the cabinet rather than the minister for mines, acting unilaterally.  This reform would bring the full gamut of relevant influences to bear on mining lease application decisions.

The current arrangements are so favourable to miners and state governments it is difficult to imagine reform coming from 'within'.  A more radical solution would see greater involvement by the national government in the licensing and taxing of mining activity.  Indeed a national approach is needed to deliver better outcomes in terms of coordination, consistency and equity.  As it is now, the national government's capacity to deliver on global GHG abatement obligations is sorely compromised by the fact it is the states that license mining activity.  Given that they collect millions in mining royalties, it's hard to imagine the states agreeing, willingly, to share the burden of Australia's global responsibilities to GHG abatement.

-o0o-

 

2. Mining is not compatible with the existing use of land at Felton

The affected country (approximately 2,800 hectares) lies on the western side of the Felton Valley and currently supports a fully sustainable agricultural system comprising fertile soils, an uncontaminated and reliable water supply, specialised capital, technical know-how, a distinctive cultural history and strong social networks.  Apart from supporting intensive agriculture the landscape incorporates high amenity values that are admired by locals and tourist alike and would be lost forever by the introduction of large-scale mining.

For a rural area, Felton is densely settled.  As a consequence, many households and individuals would find themselves adversely affected by mine-related externalities, at and around the site.  The externalities discussed below are considered relevant to a comprehensive Social Impact Assessment.

Dust:  Particulates would be made air-borne by the mining activities and then descend onto pastures, field crops and households depending on the prevailing winds.  The community is most concerned about the implications for health given that coal dust has been connected to respiratory diseases for centuries.  In the event the particulates are toxic, they might pollute water caught off roofs and render it undrinkable.  Coal dust would also undermine the 'clean and green' reputation of the district's burgeoning horticultural sector.

Noise, vibrations and artificial light:  Around the clock operation of drag lines, loaders, crushers and dump trucks etc would need artificial light at night and the operations would generate excessive industrial noise and vibrations and give rise to stress and anxiety throughout the district's significant permanent population.

Odour:  Coal dust, vagrant gases and any DME releases that become airborne would be accompanied by odours that might be toxic, giving rise to respiratory ailments.

Threats to groundwater:  The region is heavily dependent on groundwater for stock and domestic purposes and some irrigation.  However the supplies are under stress and could be diminished further by mining.  This is a major concern to the Felton community.

Threat to surface water:  Ambre propose placing their processing plant adjacent to Hodgson Creek - which flows into the Condamine River at the headwaters of the Murray Darling system.  Despite Ambre's assurances, it is likely that pollution from the mine itself and from the DME processing plant would find its way into Hodgson Creek.

Road damage and danger:  Depending on how the mine-product is transported, there could be a massive threat to local roads - built as they are on basalt soils.  Regardless of how the product is shipped out, congestion on local roads will increase, leading to higher casualty rates.

Loss of Agricultural Land:  At a local level, any loss of agricultural production to mining would have an adverse effect on any farms that are severed or lose area and on local businesses that would normally supply inputs such as machinery, fuel, seed, fertiliser, advisory services, etc.  The social impacts associated with losing agricultural land from a national and global perspective are highlighted later.

Loss of visual amenity:  The Felton Valley is currently distinguished by its space, beauty, cleanliness, tranquillity and by the unity and functionality of its community.  These qualities, which are part of the valley's cultural identity, would be substantially threatened by the entry of large-scale mining.  In addition to the mine itself, Ambre plans to build a massive water storage dam adjacent to Hodgson Creek.  While the source of any water that might use the dam remains a mystery, the building of such a structure would be forbidden for agricultural purposes (under a current moratorium) and it could disrupt the local catchment leading to increased flooding upstream of the site.  The recent flooding of mine sites in Central Queensland highlighted the perils of not applying common environmental standards to mining lease applications - such as contaminated water escaping into river systems.  The 'flood event' in Central Queensland also highlighted the futility of government agencies attempting to use traditional investigative processes to hide the true extent of environmental disasters.

Loss of jobs:  Looked at nationally, the mining industry is not a significant user of labour.  While mining activity has the capacity to create jobs, any flow-on benefit from this is far more apparent in isolated areas than it would be at Felton.  Queensland's inner Darling Downs already enjoy a vibrant economy and the entry of mining would do no more than compete labour away from existing occupations and induce wages inflation.  Thus mining is not needed on the Darling Downs for the purposes of job creation.  This point can be further demonstrated by contrasting the status quo with the Ambre proposal in terms of expected impacts on employment.  Felton Valley agriculture supports families directly - in terms of cash incomes, home grown food and lifestyle.  Secondly, the (high) intensity of agriculture in the region makes it a significant and stable user of labour.  The high multiplier applying to intensive agriculture means it creates many downstream jobs and by this means redistributes wealth.  Much of the wealth generated by agriculture stays within the region.  Furthermore, agricultural is a relatively stable user of labour; in 2008-09 for example, it hired some of the workers made redundant by Central Queensland miners dependent on export markets.  While actual development of a coal mine at Felton might create hundreds of jobs, this phase would be short lived and would be followed by an operational phase that employed relatively few people.  The increasing application of precision technologies (such as robotics) to the mining industry means that its demand for on-site labour will be miniscule going forward.  And when the resource is depleted, even those few jobs would disappear.  Thus job creation is an argument that does very little to support the entry of mining into the Felton Valley.

Summary: Felton is too closely settled to accommodate a large coal mine.  In practical terms this means that the people who would be bought out to establish the mine are greatly outnumbered by those who would become neighbours to the mine and then suffer all the ill effects of mining activity.

-o0o-

 

3. National and Global Externalities

The mine would generate 'global' externalities that inflict unpriced costs beyond the immediate area.

Loss of Good Quality Agricultural Land:  In aggregate terms Australia has very little 'good quality agricultural land' and yet the area nominated by Ambre for destruction is amongst the very best in the nation.  While individuals can be compensated for the loss of their land, this does not account for the flow-on consequences for the nation and the planet; it is obvious that GQAL should be preserved for the sake of future food security.  The situation is exacerbated by more and more of Australia's marginal lands being funnelled into 'ecological services' (such as carbon sequestration) while our population continues to grow as fast as any in the developed world.  The fact that miners can purchase and destroy GQAL in contravention of the long term public interest is a clear-cut example of market failure.

Greenhouse gas emissions:  Australia ratified the Kyoto Protocol (for cutting greenhouse gases) in 2008 and the Federal Government has committed Australia to reducing these emissions by 25% (below the 2000 level) by 2020 - depending on the level and form of international cooperation that can be achieved in practice.  Despite this position Australia's greenhouse emissions have risen by 2% per year since 2000; the worst performance of any developed country.  Assuming that the Carbon Pollution Reduction Scheme or ETS is introduced in mid 2011, it appears Australia will have to reduce emissions by about 5.5% per year from that time.  Such a target will only be achieved by shrinking the coal industry.  As the world's largest exporter of coal, Queensland must acknowledge its heroic contribution to global warming and shift its focus to more carbon-neutral alternatives[1].  If for no other reason, the Felton Coal Project should be rejected because of its implicit threat to life on earth.

-o0o-

 

4. There is a significant risk the mine could fail financially

Converting coal into oil is not new.  History suggests, however, that it is only done in desperate circumstances.  For example, it was done in Germany during World War Two and is still done in South Africa today (due to that country's inability to access world energy markets).  A local foray into 'synthetic oil' production, inland from Gladstone early last decade, was a dismal failure and ended up costing the state government and the local community dearly.  The Stuart Oil Shale Project ceased operating less than ten years ago and took with it the Yarwun-Targinnie horticultural industry - comprising at its peak more than 170 households.

Several salutary lessons came out of the now defunct Stuart Oil Shale Project.  The first lesson was the demonstrative capacity for uncontrolled externalities (such as dust, noise, vibration, odour and heavy traffic) to damage the productivity of adjoining rural industries, adversely affect the health and lifestyles of neighbours, raise road maintenance costs, increase the risk of traffic accidents and give rise to uncertainty that flows through to market confidence and rural land values.  Another lesson learnt was the cost to investors and taxpayers when 'marginal' technologies fail - either financially or because they eventually fall outside environmental standards - and there is not sufficient insurance cover for reclamation works.  When this happens, both the investment and the associated resources become stranded leaving other parties (e.g. the local council and its community) to 'pick up the bill'.

-o0o-

 

5. The True Economics of Coal Mining

Coal mining is artificially profitable at this time because it does not suffer all the costs associated with the mineral's production and usage.  Many of the externalities mentioned above have not yet been priced and are presently borne by individuals, communities and the global environment.  While some coal mining externalities (such as noise and dust) only apply during the extraction phase, others (such as pollution of water bodies and loss of visual amenity) persist beyond the life of the extraction phase and could linger for many years into the future.  FOF contend that as science and politics interact to reveal the full cost of coal mining, and society moves to impose these costs directly upon coal as a product, the coal mining industry will become increasingly less profitable.  This may indeed be a consequence of the government's Carbon Pollution Reduction Scheme - incorporating an Emissions Trading Scheme and tax on carbon.

Mines that will become least profitable going forward will be those that attempt to operate in densely populated areas such as the Felton Valley.  The reason for this is simple; the more people that are directly affected by a mine's activities and the greater the gap between the capabilities of the 'natural' environment before and after mining, the larger will be the externalities generated by mining activity.

The economics of mining on land suitable for agriculture are also exaggerated when an artificially low value is placed on the needs and preferences of future generations.  Mining compared to agriculture across the affected area appears highly profitable when a short planning horizon (say 40 years) is adopted in combination with a 'standard' discount rate (say 6%).  But the comparison would be much more interesting if it were based on the following assumptions:

 

With Mine

Without Mine

Time period

200 years

200 years

Discount rate

Zero

Zero

Life of mine

40 years

No mine

Agricultural output during mine life

Zero

100% of average

Agricultural output post mine

20% of pre-level

100% of average

 

These assumptions explicitly recognise three fundamental issues:

  • A 200 year planning horizon and a zero discount rate[2] give explicit recognition to the needs of future generations - especially in view of looming food scarcity
  • Mines have a finite life whereas agriculture is more-or-less sustainable
  • Land reclamation post-mining does not result in snap-back to the original output.

Although the changes that will have to occur in order to perpetuate life on earth have not yet gained popular acceptance or mainstream political support, the changes themselves are relatively well understood; the impossibility of 'business as usual' is obvious.  In these terms coal mining is bad.  While Australia is hopelessly dependent on coal as an energy source at this time, the least it can do to protect future generations is to avoid the opening of any new coal mines.

-o0o-

 

6. Market failure and the root cause of inaction

The market forces that would allow coal miners to enter and establish on the inner Darling Downs are clearly failing.  Evidence of market failure is normally met by government intervention with the end result being regulations to correct the market failure.  So why hasn't there been any government intervention to protect the highly productive and closely settled communities of the Darling Downs and elsewhere?

The blame on this occasion rests squarely with state governments as they control the mining approval processes and issue the operating licenses.  The fact that state governments also collect royalties from mining goes a long way towards explaining the root cause of their inaction.  Good governance demands urgent reform through some combination of the following.

1. Broad-scale land use planning that takes into account all relevant issues including history and cultural heritage, demographics, existing development status, water, agricultural productivity and community aspirations.  This reform would bring about balance between agriculture and mining and in the process give absolute protection to particular farming communities[3];

2. Licensing of all new mines by a single national body, operating independently of any government department.  Apart from severing the link between licensing and royalties, this reform would reduce duplication and make it possible for Australia to deliver a meaningful ETS;

3. Quantification of the key performance indicators applying to affected precincts, such as household density, productive capacity of the ecosystem and qualities of the natural environment.  Beyond some aggregate score, the site's 'performance' would cause the mining proposal to be rejected outright and progression to mitigation strategies would not be attempted.  Making the EIS process more objective and subject to the possibility of outright failure would go a long way towards restoring public confidence in the assessment process.

-o0o-

 

7. Exploding the Co-existence Myth

The dictionary definition of co-existence has two or more parties 'existing' harmoniously (or for mutual benefit) at one time, in one place.  This is a suspect description of the working relationship that applies between agriculture and mining since miners typically get both the time and the place they want while their counterpart, the farmers, must go elsewhere or become disaffected neighbours.

The Senate Inquiry into the Impact of Mining in the Murray Darling Basin received several submissions from pro-mining groups.  Time and again these submissions claim that agriculture and mining co-exist.  Typical of the reference to co-existence was the following:

"The NSW Government has a strong commitment to the successful co-existence of agriculture and mining.  Mining and agriculture have co-existed in NSW for over 200 years.  Today there is no reason this co-existence cannot be successful".

In reality, co-existence is a myth that state governments and miners find convenient to perpetuate.  If co-existence has been or can be 'successful' there would not be the outpouring of angst and frustration that marks the reality of the situation today.  Agriculture is conducted by real people, known as farmers.  These people work on the land and live in communities defined by many things including the inherent quality of the area's natural resources, distance between households, enterprise diversity, local history and culture, aspirations for family and continuity, belief in due process and fair play and a strong attachment to place.  Thus it is presumptuous, patronising and condescending for governments and miners to claim that agriculture and mining co-exist when the rights to such an opinion can only reside with the people who have to endure the experience of so-called co-existence.  To summarise, it is impossible to assess that agriculture and mining co-exist without confirmation by the farmers who have been, or might be, directly affected.

Where target farms are relatively large, as in Central Queensland for example, co-existence might indeed be possible because the miner can properly compensate everyone directly affected.  In some cases there might be only 2-3 landholders who would suffer the mine-related externalities and after due process, everyone might feel as if they are no worse off.

But if an open-cut coal mine was established at Felton, literally hundreds of households would be adversely affected by mine-related externalities and it would be impossible to compensate them in any meaningful way.  Thus the issue of co-existence is complex; every situation is different and in many cases, mutually beneficial co-existence will not be possible.  Thus we have a key observation: Co-existence between agricultural and mining is rarely possible.  As a general rule, the more closely settled is a rural community relative to the size of the extractions proposed, the more opposition there will be to the entry and establishment of mining.

Off-site pollution caused by mining activity amounts to market failure because regulation is needed to force miners to contain, or off-set, their externalities to a socially acceptable degree.  The externalities associated with mining in the Murray Darling Basin are meant to be addressed via a complex web of regulations.  Our problem, however, is that the regulations, including the Environmental Impact Assessment process, are all designed to 'make it happen'.  Hitherto, the miner's clever consultant has been able to devise a mitigation strategy so that despite all the counter-factual evidence and legitimate protest: surprise, surprise the project is still found to be socially acceptable and gets the go-ahead.  So why is the process so biased?

In its submission, the NSW Government says that it is 'obligated' under its Mining Act 1992 to ensure an appropriate return to the State from mineral resources. When the government's dominant constituency is a capital city, with an insatiable appetite for new infrastructure projects, it must be a blessing to feel obligated to license and subsequently tax every mine that wants to start up.  FOF suspects if it wasn't for the royalties that state governments can extract from mineral production, the scrutiny of new proposals would be a lot more critical, balanced and democratic, not to mention more cognisant of Australia's obligation to making meaningful reductions in greenhouse gas emissions.

The fact remains, however, that the public good due to mining comes via the collection and subsequently dispersal of royalties by government.  In this case, it is difficult to see how a mine at Felton would generate a public good of any consequence because the land that would be mined at Felton was freeholded before 1910, thus causing the payment of any royalties to stay with the prevailing landholder (see Queensland Mineral Resources Act, 1989, section 8).

Notwithstanding the anomalous situation applying to the collection of royalties, prime agricultural precincts in the Murray Darling Basin need a form of protection that goes beyond the measures that might ideally reside within the EIS process.  The reform sought by Friends of Felton is formal land use planning that delivers absolute protection from large scale mining of farm lands characterised by relatively high population density and high productive capacity.

Thus agricultural precincts typified by the Felton Valley should be afforded absolute protection from large scale mining activities.  Such a reform would give greater certainty to both farmers and miners.

Our summation is presaged on the fact that mining does not and cannot co-exist within particular farming communities.  Accordingly, the regulatory system that is meant to control the various market failures associated with mining must include the ability to lend absolute protection to rural communities characterised by such things as relatively high population density, high productive capacity and high environmental importance.

These are indeed the characteristics of the Felton Valley and they must be preserved for use by incumbent and future generations of farmers, for the enjoyment of the population at large and for the sake of our Nation's self-respect.

-o0o-

 

8. When Mining Fails the Public Interest Test

Historically, the entry and establishment of the mining in this country has been too easy because the relevant statutes take insufficient account of such public interest considerations as:

  • The rights and preferences of the resident population
  • How the mine is meant to generate a direct public good
  • Whether any jobs created are consistent with the national interest
  • Whether the mine is consistent with state, national and global aspirations regarding food security and greenhouse gas emissions.

Below we question each of these 'considerations' with respect to the Felton Clean Coal Demonstration Project proposed by Ambre Energy.  In the process we highlight some major shortcomings in how mining proposals are assessed and approved.

Have the rights and preferences of the resident population been properly assessed? We argue that the mineral exploration phase should be more multi-dimensional.  As well as surveying and defining the ore body the investigating agencies should check out the attitudes and aspirations of the locals.  It must be established whether they actually want a mine in their backyard.  Some affected people will welcome a mine and some won't - in a constitutional democracy, it should be the majority view that prevails.  Either way, an open, transparent process from day-one will save everyone a lot of time, angst and money.  The fact of the matter is that heavily populated areas are not suitable for large scale mining regardless of what is sitting on the land surface or underneath it.  Mining in heavily populated areas creates too many neighbours; people, households and whole communities who will suffer the externalities that go with large scale mining.  A lot of people, living close to a lot of mining, adds-up to a lot of suffering.  From a social and heritage perspective, large scale mining should be confined to lightly settled places where it is possible for the miner to properly compensate the handful of people likely to be seriously affected.  The Felton community has comprehensively rejected the Ambre Energy proposal and now requires it to be formally rejected by the State Government.

How would the mine generate a public good? According to conventional wisdom, mines generate a public good by paying royalties to the State Government; the public perceives a benefit when the royalties are channelled into city infrastructure should as stadiums and tunnels.  In this case a mine at Felton cannot possibly generate a public good because it will not actually pay any royalties to the Government.  Because the lands of the Darling Downs were freeholded before 1910, the rights to any royalties remain with the landholder - which would be the miner if they purchased the land outright from the original landholder.  How can a mine that would surely inflict numerous unpriced externalities on the local community and greater environment but generate no positive public benefit, be licensed to operate?  The secondary benefits stemming from job creation is often tendered as a reason for project development.  But as we argue below, Australia should be gearing itself for a low growth economy that is overtly cognisant of global sustainability - where demand and supply for the resources that sustain life are brought into equilibrium.

Should Darling Downs mining jobs be perceived as all-important? Our political masters haven't yet found a way of selling global sustainability to the electorate.  So they continue to chant 'Jobs, Growth, Progress, etc' and hope that all the longer term problems confronting 'life on earth' will magically go away.  Australia is not like China - we don't need massive economic growth to pull more than half our population out of poverty.  Nor do we need job creation to support domestic population growth as almost two third of the nation's population is attributable to immigration - which can be regulated through time.  Friends of Felton believe the debate on Australia's optimal population target will favour a much lower figure than that trumpeted by some in later 2009.  Toowoomba is in the fortunate position of being able to benefit from mining industry activity in southern Queensland without having any mine located in close proximity.  Thus Toowoomba could be to Southern Queensland what Mackay is to Central Queensland - a distant but effective service centre.  In conclusion, the jobs, jobs, jobs mantra is not one that supports mining at Felton.

Is a coal mine on the Darling Downs consistent with state, national and global aspirations regarding food security and curbing greenhouse gas emissions? The December 2009 Copenhagen conference failed to achieve political consensus on an ETS because several developing nations - but mainly China - believes that it is more important to persist with its prevailing economic agenda - aimed at lifting millions of households out of poverty.  China's position means that the coal exporting industry will remain potentially buoyant.  Despite the failure of Copenhagen to achieve consensus, Australia wants to act unilaterally to reduce carbon emissions.  Since it is a major carbon emitter, coal production in Australia should be made much less profitable and / or reduced.  Given the complexity and uncertainty surrounding the ETS, it would be quicker and easier to limit growth in the coal mining industry by denying it further access to viable farming land.  Direct action of this type has been sought by Friends of Felton since its formation.  Either way, new coal mines such as the one proposed at Felton face dismal prospects.

-o0o-

 

9. Likely Impact of the Proposed Felton Clean Coal Demonstration Project on the Natural Environment and the Quality of Life of Neighbouring Households: an application of the Precautionary Principle

The Queensland Government is a self-declared devotee of the Precautionary Principle - meaning it should err on the side of caution when ruling on Environmental Impact Assessments intended to objectively test the environmental credentials of development proposals.  The Precautionary Principle was formally expressed at the 1992 Rio Earth Summit in the following terms:

In order to protect the environment the precautionary approach shall be widely applied by States according to their capabilities.  Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation.

The only cost effective way of preventing the environmental degradation likely to stem from the proposed Felton Clean Coal Demonstration Project is immediate withdrawal of the proponent's rights to operate.  Not issuing the project with a license to operate is a natural consequence of adhering to the precautionary principle.  Justification for applying the precautionary principle (to stop the project) lies in the inability of the mine proponents to acceptably mitigate the plethora of environmental and social impacts that would result if the project was to proceed.  While evidence of the degradation caused by large scale coal mining abounds throughout Australia, it will be useful to nominate and score the impacts of greatest concern in the Felton Valley.  This is done in the table below on behalf of two key 'stakeholders'.  Before detailing the impacts, we will identify the 'stakeholders' and make-clear the problem each has with the proposed mine.

Notional Stakeholder

Problem with the Proposed Mine

1. Existing residents of the Felton Valley who would become near-neighbours to the mine

There are currently 224 households accommodating more than 700 people located within 12 km of the proposed mine site.  Given this population density, too many people would suffer mine-related externalities without offsetting compensation.  The people who would be affected are mostly part-time and full time farmers.

2. The prevailing natural environment that exits for the enjoyment of all people, now and in the future

The natural environment of the Felton Valley provides 'abundant economic and environmental services' to current and future generations of residents and visitors.  Sanctioning the rapid destruction of these values would effectively elevate the interests of a transitory commercial clique above the wellbeing of future generations and indeed the survival of the planet.

 

In practice, the above 'problems' would present themselves in numerous ways and embody various risks from the perspective of effective mitigation.  For the purpose of invoking the Precautionary Principle, it is possible to identify specific impacts and score them (using an ordinal scale) according to whether they are assessed as negative (-5 to -1), neutral (0) or positive (1 to 5).  This is done in the following table from the perspective of the two Felton Valley 'stakeholders' profiled above.

Felton Valley agriculture, households and residents

Impact

Consequence

Score

Loss of visual amenity and landscape. Loss of access to land and its original capacity

Massive destruction synonymous with open cut mining and petro-chemical processing. Little prospect of effective reclamation - permanent loss of food production potential.

-5

Road traffic density, hazard factor and accidents

Certain to increase relative to the status quo due to the mine workforce commuting from Toowoomba and Pittsworth etc

-4

Social cohesion

Certain to reduce due to displacement of existing residents and increase in itinerant workers

-3

Threats to ground water supplies and competition for a scarce resource already over allocated

There are more than 500 bores within 12 km of the proposed mine site - any adverse effect on these bores would devastate the valley. The mine would represent a new competitor for water in an area where supplies are already fully allocated - implying less water for some existing user

-4

Air quality, noise, vibration

The scale and nature of the mining proposed means mine neighbours would inevitably suffer a decline in their quality of life

-3

Rural economy

The land taken out of production by the mining operations would cause a loss of critical mass with knock-on effects for the farm-service industry.  Severed farms would be made less efficient and it's likely land values would suffer - without compensation

-3

 

Natural Environment

Impact

Consequence

Score

Carbon emissions and global responsibilities

Massive release of vagrant emissions (during actual mining) and again during processing of the coal into DME and again when combusted in vehicles. Should Australia permit a single new coal to open it will be labelled by the international community as a climate change denier

-5

Pollution of surface water and national responsibilities

Felton Valley lies at the headwaters of the Murray Darling Basin.  Administration of the MDB is increasingly coming under the control of a national body and Queensland is obliged to cooperate

-4

Loss of Good Quality Agricultural Land

Awareness of the tensions surrounding international food security is slowly dawning on our policy makers. In the meantime, the incumbent farmers are the best custodians of the land

-1

 

The above assessment of nine impacts resulted in a score of minus 32 - implicitly a big enough risk to invoke the Precautionary Principle.  More generally, the analysis suggests there are a plethora of impacts that are likely to have negative consequences for neighbours and the environment.  Given the appalling history of mine impact mitigation in this country, there is an obvious role for the Precautionary Principle, especially in highly populated and ascetically beautiful areas as the Felton Valley.

-o0o-

 

10. The Queensland Farmlands Protection Index (QFPI)

The Queensland Government has a long-standing policy aimed at protecting good quality agricultural land.  This policy is based on the following principle:

The Queensland Government considers that good agricultural land is a finite resource that must be conserved and managed for the longer term.  As a general aim, the exercise of planning powers should be used to protect such land from those developments that lead to its alienation or diminished productivity.

State Planning Policy (SPP) 1/92 (Development and Conservation of Good Quality Agricultural Land) has not yet been used to protect agricultural land from mining.  But open cut coal mining has already consumed thousands of hectares of good quality farmland in Central Queensland and is now encroaching on Southern Queensland farmland where the economic and social values are even higher.  This paper explains why, where and how SPP 1/92 should be extended to make it applicable to open cut coal mining.

Exemption of open cut coal mining from SPP 1/92 assumes that it generates more public goods than agriculture and it is a higher and better use of land.  As explained elsewhere (see FOF website Opinion Pieces 1, 2, 3, 5, 6 and 8) these assumptions do not stand-up to critical scrutiny.  In short, recognition of the unpriced externalities presently associated with mining and combusting coal would greatly diminish the true value of the coal industry.  Thus application of SPP 1/92 to open cut coal mining is easily justified.

The Queensland Government has known about the conflict between mining and agriculture for some time.  Despite this it still talks about the two industries co-existing while making no attempt to explain why or how such a happy state of affairs could be the case (see pieces 2 and 7).  The Government's failure to act decisively could be dismissed as 'lack of political will' but it is more likely that technical obstacles of the following nature have got in the way:

  • Inability to conceptualise and formulate the actual system and processes needed to give absolute protection to worthy farmland throughout the State
  • Inability to model the economic, social and environmental impacts associated with giving protection to agricultural land against the dynamics of planning for climate change mitigation and the ever-growing threat to global food security.

The focus of this paper is on removal of the first of the above 'obstacles'.  Friends of Felton propose the development and application of a 'farmlands protection index', based on objective criteria and administered by an independent, third party agency.  The index would derive in the first instance from several guiding principles - starting with the existing principle cited in italics above.

Supplementary Principles

  1. The protection sought would be delivered by extension of SPP 1/92 to open cut coal mining.  Accordingly, farmland would be protected from large-scale coal mining subject to it meeting an objective test of 'goodness'.  With this change in place, prospective coal miners would recognise farmland as not available in the first instance.  Only in the event that a subject area failed an objective test of its 'goodness in agriculture' would it become available for mining purposes.  This is consistent with the current application of SPP 1/92 except that the 'goodness test' would be applied to the total area likely to be affected by the proposed mining activity.  (One of the inherent faults with SPP 1/92 as currently applied is its failure to consider the background context associated with proposed land use changes).
  2. The assessment of a land parcel's goodness (as farmland) and hence availability would be initiated by the prospective miner.  The miner would be required to make a formal application, and have it objectively assessed, before there could be a material change in land usage.  Thus the miner must determine whether the land is 'available' before they undertake any activities including on-ground exploration.
  3. The assessment itself would be aided by the use of a template as demonstrated in Table 1.  The template would be completed by the proponent - or his/her representative - but would then be reviewed by a senior officer of DPI (or some other agency with overarching responsibility in land use planning).  Ultimately a senior Minister would be responsible for the integrity of the assessment process and making the final determination.
  4. The assessment should be multi-dimensional, taking into account production capability, economic and social issues.  In general terms, the agricultural status of an area will be upheld by a combination of factors that point to a viable, vibrant, integrated and sustainable farming system.
  5. As explained in 1, the assessment (or test of goodness in agriculture) should be applied on a regional basis and specifically to all farms likely to be affected (e.g., those within 10-12 km of a possible mine site).  In practice it might be possible to reduce the cost of the assessment process by applying it to just one property deemed to be 'representative'.  The scores applied to each criterion would be aggregated to determine whether the area should be declared off-limits for mining.  Below a critical aggregate score, the potential to establish a mine would not be stopped by SPP 1/92 and could then be assessed according to the existing guidelines that use the EIS process.

Table 1 provides an example of how the assessment template could be structured and applied.  This example should be considered as preliminary; if the QFPI concept as advanced here is found to have merit it will be possible to refine the criteria and scoring system.  Refinements to the systems proposed could be undertaken by a panel of experts including DPI, producer organisations and NRM bodies.

Table 1: Application of the Queensland Farmlands Protection Index to a proposed mining activity in a hypothetical region (scores based on one representative farm)

Production Capability Factors

Criteria to be assessed according to merit

Benchmark value

Low value (0-4)

Neutral (5-6)

High value (7-10)

Natural fertility of soil

Low/Mod/High

 

 

8

Water holding capacity

Low/Mod/High

 

 

7

Yield of field crops

2 t/ha/yr av

 

 

7

Stocking rate of cattle

Av kg LW/ha

 

6

 

Av farm size

300-400 ha

 

 

7

Economic Factors

Economic viability of local agriculture

Low/Mod/High

 

6

 

Land values

> 2000$/ha

 

 

9

Sustainability of land in agric

Low/Mod/High

 

6

 

Local NRM classification

Low/Mod/High

 

 

7

Social Factors

Households within 10km of site

Low/Mod/High

 

 

8

Proximity to a major

population centre

Within 50 km

 

 

9

Community cohesion

Low/Mod/High

 

 

8

Av age of local population

>60; 60-40; <40

 

5

 

TOTALS

 

 

 

23

70

 

The hypothetical farm assessed in Table 1 was given an aggregate score of 93.  The implications of this score could be determined by reference to a scale of the following nature:

Aggregate Score from Assessment

Implications for Land Availability

Less than 60

Available for uses other than agriculture

60 - 80

Available for low impact form of mining

More than 80

Not available for open cut coal mining

 

 

The system proposed by FOF has several key strengths including:

  • Effective extension of existing system:  This means potential to deliver meaningful protection to good farmland while necessitating minimal changes to the existing State Planning Policy pertaining to farmland.
  • Highly targeted:  As the changes are designed to stop the entry and establishment of open cut coal mining on good quality farmland, it will not have unintended effects on other projects that might need access to land with minimal adverse effects on agriculture.  Thus reasonable and mutually acceptable co-existence would not be impeded.
  • Low application costs:  The system would apply on a case by case basis with most of the costs borne by the mine proponent.  The cost implications of the system for government would be minimal.

 


[1] In 2008 Queensland's 54 coal mines produced 188 million tonnes of coal with 85% of this exported, accounting for about 20% of global trade. Given the contribution to global warming implicit in these figures, Queensland should not exacerbate the situation by making local communities suffer twice i.e., once as locals and again as citizens of the planet.

[2] 1Discount rates reflect the investor's time preference for money; the more urgent the need or preference for a payoff, the higher the discount rate.  Future generations should have low discount rates because they have no need or preference for a quick payoff.  Contemporary cost benefit analyses appear to give little recognition to the implicit preferences of future generations.

[3] A mining tenement can only be granted over 'available land'.  Thus land in national and conservation parks is not available to mining in the first place.  FOF want prime agricultural land to be protected in a similar way.

 



11. Impact Management Strategies: the route to effective mitigation or just spin?

Measured in terms of 'technical difficulty', Environmental Impact Assessment studies come in fairly low on the scale. What has to be done is specified in the first instance by the project's terms of reference. All the consultant has to do is respond fully, faithfully and critically to each question inferred by the terms of reference. This can be done with a rudimentary knowledge of the subject and enough fieldwork to ensure a demonstrative link between the answers and the site specified in the assessment's title. The only aspect of the whole assessment that calls for some real grunt is the bit dealing with mitigation - the so-called Impact Management Strategy. In theory, the IMS should meet the expectations of two 'clients': first the regulatory authority responsible for the integrity of the licensing process and secondly the mine neighbours who would suffer the consequences of externalities once the mine becomes operational.

Unfortunately, it cannot be assumed that all consultants will 'respond fully, faithfully and critically' to the terms of reference. In practice, many perceive the project proponent as the true client and they interpret every reference accordingly - meaning that they find all identified impacts as either unimportant or 'suitably manageable' through the application of prescribed mitigation measures. Those EIS consultants who present themselves as project advocates are at best unprofessional and at worst corrupt. Regardless of who pays their fees, EIS consultants should go about their work as impartial, independent and critical scientists. It is in the best interests of project proponents, government and society as a whole to have EIS consultants behave in a totally professional manner. In the first instance it is the responsibility of professional associations to set standards and advise individual firms how best to ensure standards are adhered to in actual practice.

Notwithstanding the importance of professional standards, it is vital that preparation of the Impact Management Strategy takes into account the express needs of both regulatory authorities and affected residents and communities. If the mine regulator is satisfied (and subsequently licenses the project) but the mine's potential neighbours are not satisfied, then it would appear the interests of the miner have been put ahead of local residents. The key issue is the overall acceptability of a project's IMS and how this should be determined. So let's delve deeper into this murky morass.

The suggestions made by a recent impact management strategy applicable to coal seam gas mining on the Western Downs (which was predicted to cause several nasty impacts including subsidence, loss of groundwater supplies and pollution of the site) were of the following nature:

  1. More intensive monitoring
  2. Detailed hydrogeological assessment
  3. Alternative water supplies to replace affected groundwater

Given the flimsiness of this 'strategy' it is most unlikely that mine neighbours would have contributed in any meaningful way to its formulation. Despite this the impact assessment, and implicitly the project itself, could still get a tick from the regulators because, technically speaking, it does include an Impact Management Strategy.

Landholders and households potentially affected by mining proposals should have an automatic right to arbitrate on the credibility and hence acceptability of Impact Management Plans during the preparation phase. Potentially affected parties should not be put through the messy and expensive business of having to fighting a rear-guard action.

At a meeting in August 2009 between the consultants employed by Ambre Energy and residents of the Felton Valley, the latter refused to enter into discussions regarding mitigation measures that might be proposed in combination with the so-called Felton Clean Coal Demonstration Project proceeding. Felton Valley residents took this position after careful consideration of what Amber was then (and still is) proposing and the likely impacts in the event the proposal goes ahead. Residents concluded there is no-way the impacts of the mine proposed by Ambre could be mitigated to their satisfaction. Thus the people have spoken. Rejection of the project's potential Impact Management Plan means that it has been pre-emptively judged as socially and environmentally unacceptable. Therefore the project should be formally rejected immediately and completely.

Only recently have 'rural communities against mining' sensed that the process in stacked against them and developed countervailing strategies. At this time, the pre-emptive action taken by Felton Valley residents is seen as a key strategy.