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Strict compliance of ERC Calculator Not Necessary to Comply with the EPA : Century Mining [2021] QLC

Century Mining Limited v. Department of Environment and Science [2021] QLC 3


Since 2018, Century Mining Limited (“CML”) has been re-processing tailings to recover zinc from Century Mine, an open-cut zinc and lead mine in North-West Queensland.


In Queensland, miners must provide security for the total cost of any mine rehabilitation and environmental obligations by paying an amount determined by the Department of Environment and Science (“DES”).[1] This is known as the Estimated Rehabilitation Cost (“ERC”) .


DES calculated the total ERC for CML’s mining activity to be $230,465,718.00.[2]


CML disagreed, calculating its ERC as $173,271,205.71.[3]


DES confirmed its calculation by internal review. CML appealed the internal review decision to the Land Court.[4]


The issue before the Land Court (Kingham P) was whether an ERC amount not calculated strictly in accordance with the approved calculation methodology complies with the miner’s obligations under the EPA Act ss 298 and 300.[5]


The two main considerations before the Land Court were:


1. The design of the covers for the waste rock dump and the tailings storage facility; and

2. The calculation of the ERC amount.[6]


The Design Covers

The Land Court directed the appeal to Court Managed Expert Evidence to find a resolution for the design covers.[7] The Joint Experts Report (“JER”) provided by the expert witnesses agreed that CML’s cover design would satisfy the company’s environmental obligations, provided it met certain design requirements.


Calculating the ERC amount

DES has published an estimated rehabilitation cost (“ERC”) guideline containing an approved calculation methodology.[8] Under the Environmental Protection Act 1994 (Qld) (“the Act)”, the decision-maker must have regard to the ERC guideline when contending an ERC amount.[9]


The purpose of a guideline made under s. 550 is “to provide guidance”[10]. Having regard to the guideline’s stated purpose, the Land Court ultimately held that the decision-maker is not required to make a decision to adopt the amount arrived at when using the approved calculation methodology. The better view is that the decision-maker must have regard to the ERC guidelines in making its decision. The Land Court provided two (2) reasons to support this conclusion:


1. any discretion afforded to the decision-maker by the Act would be eliminated; and

2. the ERC guideline, a statutory instrument that must yield to the EPA.[11]


The Design Covers and the Final ERC Calculation

The decision-making process provided for in the guideline contemplates that the ERC decision may be influenced by several considerations, including “any relevant rehabilitation plans, reports, evaluations, and assessments”.[12]


The Joint Expert Report (“JER”) was a report relevant to the decision-maker in making the ERC decision. The ERC approved calculation methodology employed a variable subsumed by a Joint Expert Report (“JER”).[13] Specifically, the approved ERC calculator methodology assumes capping using two capillary breaks;[14] whereas, the JER provided a site-specific consideration, asserting that “a single, thicker capillary break”[15] would be more effective in the Mine, given the site’s semi-arid climate.


Result

The Land Court set aside the ERC decision made by DES and substituted it with a proposed ERC amount agreed by the parties, based on expert evidence.[16] The outcome indicates that DES does not need to strictly apply the ERC calculator and may consider other relevant evidence in order to comply with the Act.


This case note was prepared with thanks to Sarah Gough.


For the full decision: https://archive.sclqld.org.au/qjudgment/2021/QLC21-003.pdf


You can also listen to this case note on my podcast "Veritas" available through Google Podcasts, Spotify, Breaker, PocketCasts, RadioPublic and AnchorFM:


https://open.spotify.com/show/6sPDKrJ1uMp6JwGTQ8O9A7?si=UiRM2MzXQUq4ufsCsSvi0g&dl_branch=1

[1] Environmental Protection Act 1994 Ch 5 Part 14. [2] Century Mining Limited v Department of Environment and Science [2021] QLC 3, 3 [3]. [3] Ibid. [4] Environmental Protection Act 1994 Qld s. 300. [5] Century Mining Limited v Department of Environment and Science [2021] QLC 3, 5 [15]. [6] Century Mining Limited v Department of Environment and Science [2021] QLC 3, 4 [9]. [7] Then governed by Practice Direction 3 of 2018 (since repealed and replaced by Practice Direction 6 of 2020). [8] Department of Environment and Science, Guideline ESR/2018/4425: Estimated rehabilitation cost under the Environmental Protection Act 1994 (Version 2, 2018) s. 2.3.2; Century Mining Limited v Department of Environment and Science [2021] QLC 3, 4 [10]. [9] Environmental Protection Act 1994 s. 298(2)(c). [10] Environmental Protection Act 1994 s. 550. [11] Century Mining Limited v Department of Environment and Science [2021] QLC 3, 6 [22]. [12] Ibid, 5 [28]; Department of Environment and Science, Guideline ESR/2018/4425: Estimated rehabilitation cost under the Environmental Protection Act 1994 (Version 2, 2018) at 2.5.1. [13] Century Mining Limited v Department of Environment and Science [2021] QLC 3, 6 [19]. [14] Joint Expert Report of Dr David Williams, Mr Peter Scott, Mr Andre Kemp and Dr Alan Robertson dated 3 December 2020 (‘JER’), p 20. [15] Century Mining Limited v Department of Environment and Science [2021] QLC 3, 6 [20], citing the JER at 1.1.4 p 37. [16] Century Mining Limited v Department of Environment and Science [2021] QLC 3, 6 [25].

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