UPDATE ON WOLLOMBI EXPLORATION LICENCE FOLLOWING THE ‘FUTURE OF COAL’ STATEMENT

UPDATE ON WOLLOMBI EXPLORATION LICENCE FOLLOWING THE ‘FUTURE OF COAL’ STATEMENT

Update from David Burgess on 30th June 2020

Please note, the information will change from time to time.
Thank you to David Burgess for compiling this information.
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UPDATE ON WOLLOMBI EXPLORATION LICENCE FOLLOWING THE ‘FUTURE OF COAL’ STATEMENT

As promised … The short version of this can be read in the next paragraph. The longer read follows for the nuts & bolts of it & those interested in learning some new words …

The Deputy Premier came up to Singleton last week & launched a document called the ‘Future of Coal’. This contained a map of areas for future Release including an existing exploration licence (currently held by the NSW Government) called Wollombi. This makes it a long, formal process that will take years rather than months. Although we think the chances of this progressing to an operational coal mine are highly remote, the threat is real & will have to be watched & acted on. Nothing is likely to happen this year but it’s probably best to get on the front foot. We don’t know where this came from, whether someone has a specific plan or if it was just the work of a government geologist on a computer. I am no longer Hunter Coordinator for Lock The Gate (LTG) & am temporarily out of the valley while dealing with family matters in Sydney, but I’m happy to do the grunt work on the Wollombi Release area as far as information & next steps are concerned & what LTG is up to. I have a few ideas & hope to get up in the next few weeks & catch up with a few of you about this. Feel free to PM me if you want to be kept in touch.

Here’s the long version …
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LTG had a meeting with senior bureaucrats from Resources & Geoscience yesterday & they were made aware that this information would be made public. They also indicated that they would be happy to talk directly with people about this & I have the contacts for that.
The statement (linked below) has four key elements:
1. new areas of the state that are being considered for release for new coal exploration;
2. a series of small coal exclusion areas, mostly based on decisions the government has made before;
3. promises of new measures on rehabilitation, air pollution & water; &
4. promises of support for diversification of coal-reliant regional economies “to assist with the phase-out of thermal coal mining.”
Most of these new areas for exploration are in the Western coalfield & the two that are most advanced in the Government’s processes are Hawkins-Rumker & Wollar. I’ve linked a map of these for interest’s sake it’s more advanced than ours & the terrain is a little bit similar.

The announcement means that the area mapped as Wollombi (AUTH0263) will next undergo what the government calls a “Preliminary Regional Issues Assessment” (PRIA) for consideration of whether or not it is released to tender for coal exploration. Link to PRIA process below.
We don’t as yet have a timeframe or how long it will take. The PRIA is a new process, implemented after the Independent Commission Against Corruption (ICAC) recommended a triple bottom line and competitive tender approach be adopted before considering new areas for coal release in 2013. I have linked the government’s response to the ICAC recommendations & there are some important things in there. The bottom line is that the government may publish a Review of Environmental Factors and set about drilling to seeing what’s under there. This does not involve public consultation but does require a landowner’s permission.
To be clear on terminology for those not familiar with the Strategic Release Framework:
“STRATEGIC RELEASE” is the triple bottom line competitive tender process for releasing new coal exploration areas created in the wake of the ICAC investigation.

“OPERATIONAL ALLOCATION” is a back door to avoid having to go through that process if you’re applying for an exploration licence over a coal resource adjacent to your existing mining lease or exploration licence. In our case there are a number of those & I haven’t yet looked at the individual status of them nor know whether they are involved. But the new process generally makes it more rigorous, which is good.

The ‘Future of Coal’ statement is broad and the actions are still being worked on. It’s a statement of intent. There’s another year (or more!) in filling in the blanks with a series of pieces of policy and program work some of which will involve public consultation.
The headline that came out of last Thursday is that the NSW Government is relinquishing vast areas they previously held for coal exploration. Five years ago the government-held exploration area was 5 times the size it is today and in the coming 2-3 months, they will let go of most of the rest of it, settling on the identified areas for potential release in the map. That obviously made the headline here rather different!

There’s no decision yet to actually go through the Strategic Release process for anywhere but Wollar and Hawkins Rumker. These two are the most advanced in their consideration and ready to begin the next stage after extensive government drilling. The shapes in the map, reflect the location of the geological coal resource and they stress that these are not (necessarily) the areas that will be open to tender. They will now go through the PRIA process. What we see in the maps is the maximum possible extent that would be released – almost certainly not all of it will be.

It might be indicative for us that this that has been going on in Wollar for five years. Wilpinjong applied for Operational Allocation (i.e., new area of exploration that does not need to go through the Strategic Release program & out to competitive tender) & was initially rejected on the grounds that it was part of a wider resource and did not meet a market interest test.
Wollar definitely and Hawkins Rumker will now probably go through the triple bottom line assessment, community consultation and then, if that process deems some areas appropriate to Release, a proposal will go to cabinet to consider and a decision will be made about what area gets put to tender. Companies may then submit tenders and these might again be subsets of the identified area. This process will take at least six months but the hint was that it will take a fair bit longer than that. The PRIA process for Wollar and Hawkins Rumker is “not too distant” but conducting them costs money and though they have budget for it, they need authorisation to spend it. Covid has deferred the budget so it sounds like they can’t begin until the NSW budget is done. Same for the drilling programs in the other potential release areas, of which Gorman North is the next off the ranks.

The department was asked about the distinction between “fast track” areas adjacent to existing exploration licence areas and the areas for potential release that are also adjacent to existing exploration areas. The threshold for that is whether the existing resource can support a wholly new and independent mining operation. If it could stand alone, it doesn’t qualify for operational Allocation and therefore is in the blue areas and goes through the full process.

Aside from Wollar and Hawkins Rumker, most of the blue splodges on the map for potential release need further drilling (by the government) to determine the size, shape & quality of the resource before going to the next phase. Then they get referred to the Strategic Release system if they are of sufficient quality. Gorman North will be the next area targeted for drilling. Wollombi and Giants Creek are a longer way off and in reality, who is going to want to tender for these areas? The threat is real, but not strong.
Some of the areas they’ve got marked in blue will fail the drilling stage and get taken off the table, others will fail at the PRIA stage. So, Wollombi is (by inference) simply an area of the government’s own exploration licence that has potential & that they are not yet willing to relinquish, but it sounds like it will not be going through the PRIA process this year.
The Strategic Release framework itself is going to be tweaked & we should see more detail coming from them in the next couple of months. For example, they are removing the second cabinet decision which was previously right at the end & acted as a procedural check on the selection of the tenderer. This will be replaced with internal controls to verify that the best offer was successful & will shave 3 months off the duration of the Strategic Release process.

Operational Allocation is also being tweaked. Right now, even if your request is invalid, it has to go through the 6-month process. They hope to tweak the regulations & legislation to set ‘yes/no’ thresholds and allow rejection out of hand at the outset for some proposals. At the moment they don’t have a lot of power to say “no” even when it’s obviously bad. They have no legal authority to deny an Operational Allocation application as long as it meets the technical criteria and so will give themselves power to veto obviously inappropriate areas. Rocky Hill (Gloucester), for example, they say, was obviously bad from very early on in the process. LTG has said it would like to be consulted about this.

They also want to create a third pathway between Strategic Release and Operational Allocation. Operational Allocations that fail and get moved into Strategic Release will have a speedier Strategic Release process as will cases where a licence is relinquished or cancelled for compliance reasons.

As per the existing framework, planning services in DOPE (Planning & Environment) will conduct the Preliminary Regional Issues Assessment.

I have a little bit more information about the other areas & Hunter’s overall transition away from coal, but I think this’ll do for now.

Hope this helps!

FUTURE OF COAL STATEMENT & MAP

WOLLAR MAP

PRELIMINARY REGIONAL ISSUES ASSESSMENT

STRATEGIC RELEASE FRAMEWORK

RESOURCESANDGEOSCIENCE.NSW.GOV.AU