The proposed Hume underground mine would produce around 3mtpa of coal.
The proposed Hume underground mine would produce around 3mtpa of coal.

By Samantha James

September 11, 2015

After more than four years of community consultation, steel giant POSCO’s Australian subsidiary Hume Coal is designing “the lowest impact coal mining operation in the country”.

HUME Coal has been working since its inception in 2011 to ensure its namesake project remains environmentally viable and economical.

The company is developing a 3.4 million tonne per annum underground coal mine in the Southern Highlands of NSW and has received state government environmental assessment requirements set out under the project’s State Significant Development status.

The Hume project was originally operated as a joint venture between POSCO Coal and Cockatoo Coal, until May 2013 when POSCO acquired Cockatoo’s equity and 100 per cent of Hume Coal.

In August 2015 Hume began compiling data for an Environmental Impact Statement (EIS) submission as it worked towards project approval. .

Project manager Greig Duncan said Hume was planning the mine with the local community in mind, to create a new kind of mining system that would “generally meet the requirements of the community and address the issues they’ve raised and therefore minimise impacts”.

The Hume project is located in the Southern Highlands of NSW.
The Hume project is located in the Southern Highlands of NSW.

A new kind of mine

Hume proposed an underground mine designed specifically to protect the groundwater systems, with no impact on town water supplies, dams or streams.

It would be a metallurgical and coking coal operation, planned at depths of between 80m and 85m, with an assumed mine life of about 19 years, after a three year construction period and a period of rehabilitation at conclusion of mining.  Ongoing exploration was expected to be completed by the end of 2016, although the mine plan had been completed based on a total in situ resource of around 350mt of coal.

“It’s different to any other mine you’ll find in Australia and overseas,” Mr Duncan said.

“It’s what we call ‘first workings only’. It’s specifically designed to minimise any impact on the aquifers above the coal seam, but it’s also been designed so it won’t cause any structural damage to infrastructure on the surface above the mine as well.”

The mine would also utilise a new system of dealing with coal waste, whereby the unusable stone and rock extracted during the coal preparation process would be pumped back underground on completion of mining for natural underground rehabilitation.

“Within the coal seam there are bands of stone and rock that would normally be stockpiled on the surface and rehabilitated successively,” Mr Duncan said.

“What we intend to do is  take that material, crush it, put it with the excess water, and as we finish the mining process in a panel we’ll seal it off and pump the reject from the coal preparation process back underground where it came from.”

This method has not previously been employed in Australia, although it was being trialled at a longwall mine. However Mr Duncan said this trial was different to Hume’s design “because Hume will be a first working mine, so it won’t create any subsidence and we’ll have a lot of space, making it very easy for us to dispose of reject material underground again”.

He said this method could potentially be more expensive than storing and rehabilitating the reject on the surface, however “in the environment we’re in, this is one of the requirements we’ve got to meet and it’s just the cost of doing business.”

The company planned to connect the mine to the existing Berrima railway line that runs from the Berrima cement works to Port Kembla. Using this existing infrastructure, Hume would only have to construct a balloon loop and a couple of kilometres of rail line.

The total project capital expenditure was estimated at about $720 million across three years, with $300 million to sustain the operation.

Environmental assessments have been ongoing at the project for more than four years.
Environmental assessments have been ongoing at the project for more than four years.

Community consultation

The mine design was achieved after the Hume team completed preliminary dust, noise and groundwater modelling, geochemistry test work and the majority of baseline environmental monitoring and surveys, including ground and surface water, archaeology, ecology, dust, noise and traffic.

Mr Duncan said the studies were carried out in consultation with the local community which raised several project-specific concerns – notably water, subsidence, visual impact, coal seam gas, and, most recently, dust.

“Over the last four years we’ve been interacting with the community and carrying out a number of surveys, and we’ve moved to alleviate several concerns bought forward by the locals.”

Six information sessions held across the Southern Highlands had brought together about 550 people from the community, who were concerned about coal seam gas exploration.

“We don’t have any coal seam gas, so it’s not a concern at all. It doesn’t exist, therefore it can’t be tapped – there won’t be any drilling, and there won’t be any fracking,” Mr Duncan said.

“In terms of water, there will be no impact on surface water – dams, or the town’s drinking water – but there will be a minor impact on water levels in bores for a period of time. The water will ultimately return to its original level.”

Mr Duncan said that subsidence was also a non-issue, as the company had no intention of extracting the coal more than once. Only 35 per cent of the coal was to be mined, meaning the rock strata above the material to be moved would maintain its long-term support.

All efforts had been made to ensure the mine would fit with the surrounding landscape; Mr Duncan said the company had tried to “tuck away” the surface infrastructure so that it was “out of mind, out of sight”.

The local community had also raised concerns about how Hume would minimise lift off from stockpiles and the rail wagons.

“What we’ve told the community from day one is that the rail wagons will all be covered so dust from rail wagons along the line should not be an issue,” Mr Duncan said.

“We’ve orientated the stockpiles to be parallel to the east-west so they’re parallel to the wind direction to minimise any lift off, but we’ve also indicated we’re looking at other treatment as well, such as veneering of the stockpiles.

“We’ve tried to address all the questions but some of the answers won’t be available until March next year when we’ve completed the next phase of work to support the EIS submissions. We’ll be going back and talking to the communities again in about mid-March 2016 and hopefully we’ll be able to address the questions then.”

Hume expected the project to create 300 long term jobs and inject $720 million into the region – a figure Mr Duncan called a “substantial economic benefit”, delivered with minimal environmental impact.

This would include 45 engineers and professional staff, 40 supervisors, 90 skilled operators and 120 technical tradespersons, with around 70 per cent of staff to be sourced locally.

This would equate to around $40 million per annum in wages and salaries being put back into the local economy.

Mr Duncan said the mine had been designed with community concerns in mind.
Mr Duncan said the mine had been designed with community concerns in mind.

Moving forward

The primary focus for the company for fiscal 2016 and early 2017 would be completing the approvals process. Mr Duncan put the timeline at around three years to get mining approvals and another three for construction, with the mine expected to begin production around 2021.

 “We have just received the environmental assessment requirements for completing a draft EIS for submission in around July next year,” he said.

“We’ll submit our draft EIS for advocacy assessment before it goes on public exhibition. It will probably go through public exhibition quarter four next year.”

Mr Duncan said that by the end of calendar year 2016, Hume would have completed its exploration and put the EIS on display for public comment.

“We expect by the middle of next year we’ll have been through the first round of the Independent Planning and Assessment Commission’s (IPAC) process – where the Department of Planning defers the project to IPAC – and that will be about halfway through the approvals process.”

Hume considered the project economically viable for production in 2020 based on fiscal 2015 economic projections, which estimated the market’s oversupply of metallurgical coal would be used by then.

“The mine will produce metallurgical coal or coking coal for steelmaking. The latest projections are that the oversupply in the industry will be consumed by around 2020 and 2022 for thermal coal, so we expect that by the time we get through the approvals process and construct the mine prices will have improved again significantly and it’ll be viable.”