A new report has analysed the environmental data and recommends the State Government extend a pilot scheme for mine water release into the Fitzroy River catchment to other mines operating in the Fitzroy River Basin.
Gilbert and Sutherland Pty Ltd (G&S) and Marsden Jacob Associates (MJA) were engaged by the Queensland Department of State Development, Infrastructure and Planning to assess the potential for improved mine water management within the Fitzroy River Basin.
The following article, prepared by O. Droop (G&S) and P. Jacob (MJA), summarises the outcomes of their report.
There are currently 36 operational coal mines in the Fitzroy Basin (March 2013), as depicted in Drawing 1 (page TBA) and distributed as follows:
- Nogoa/Mackenzie catchment: 16
- Isaac River catchment: 13
- Connors River catchment: 3
- Dawson River catchment: 3
- Callide River catchment: 1
These mines use either open-cut (29) or underground (long-wall) mining (7) techniques to extract coal. The type of coal is mine specific and includes: coking, thermal and PCI (pulverised coal injection).
As a key element of the overall understanding of the current status of mine water in the Fitzroy Basin, mine-specific data was obtained from all operating coal mines within the Basin with regards ‘legacy water’ volume and salinity. For the purposes of this study, legacy water has been defined as all mine-affected water stored on-site in excess of normal mine water management capacity and currently, or with the potential to, adversely impact mine operations.
Legacy water volume and salinity data was obtained for each mine for two periods:
- prior to the wet season (nominally 1 November 2012)
- end of March 2013, providing a clear picture of the change in legacy water conditions at a basin-scale, down to specific mines.
At the time of reporting, 22 of 36 operating coal mines in the Fitzroy Basin reported holding legacy water:
- 9 (of 16) – Mackenzie sub-catchment
- 9 (of 13) – Isaac sub-catchment
- 1 (of 3) – Connor sub-catchment
- 2 (of 3) – Dawson sub-catchment
- 1 (of 1) – Callide catchment.
There is currently around 250 gigalitres of legacy water in assessed Fitzroy Basin coal mines.
Typical electrical conductivity (EC) of legacy water is around 5,000 micro-siemens per centimetre (µS/cm), with substantial variability across mine sites and also between mines.
Figure 1 depicts legacy water volumes by catchment. For many mines, the volume of legacy water increased over the 2012/13 wet season as indicated by the generally higher volume in March 2013 compared with November 2012. Almost all mines across the Basin showed a general increase in water storage over the 2012/13 wet season – with the exception of two pilot scheme mines.
Discussion and conclusions
There are three key factors influencing the ability of mines to effectively manage their mine water balance. These are:
- Regulatory: the rules and conditions within which they are required to operate and release. This regulatory framework defines the level of protection of downstream/in-stream values and characteristics.
- Operational: the mine-specific infrastructure and management arrangements in place on individual mines which dictate the level of release capability.
- Hydrological: the natural climatic and stream flow characteristics that influence all real world, actual opportunities for release.
Based on our assessment of the regulatory, operational and hydrological conditions within the Fitzroy Basin since 2008 (the point at which legacy water inventories started to become problematic) the major contributing factors to the current state of legacy water include:
- Climatic conditions since the 2007/08 wet season, including above average rainfall and specific, short-duration extreme flood events; and
- Post-2008 regulatory changes (in the form of modified Environmental Approval (EA) release conditions) which constrained the ability of mines to release water during subsequent flow events.
The change in regulatory conditions altered the individual mine water balance of those mines with release comprising a key component of their approved mine water management plan. This change, in combination with above average rainfall conditions over recent years, has led to the accumulation of excess water on-site.
Options to return to a sustainable long-term mine water management balance need to involve changes to either one or both of these regulatory and operational factors.
“…our assessment indicates that the Pilot conditions improved release opportunity by between 25% and 100% over non-amended conditions…”
Evaluation of 2012/2013 Pilot Scheme
In late 2012, the Queensland government initiated a program that permitted pilot releases of water into the Fitzroy River catchment from four BHP-Billiton Mitsubishi Alliance (BMA) coal mines located in the Isaac River catchment.
At the time of preparing this report, sampling, data collection, analyses and reporting associated with the 2012/13 Enhanced Environmental Monitoring Program (EEMP) (involving a series of weekly and monthly rounds of data collection, as well as post wet season water quality and fish survey tasks) were not complete. This report is therefore based on the information available to date.
Evaluation of the pilot scheme has been undertaken from the perspective of the level of improved opportunity for release as well as the maintenance of monitored water quality outcomes and compliance with the regulated release conditions
The Department of Environment and Heritage Protection (DEHP) issued amended EAs to four coal mines located in Central Queensland to conduct a pilot release of mine water during the 2012/13 wet season. The four mines provided with approval to take part in this pilot are the BHP Billiton Mitsubishi Alliance’s (BMA) mines:
- Goonyella Riverside
- Peak Downs
- Norwich Park.
These mines are all located in the Isaac River catchment.
The pilot scheme was structured to provide for improved release opportunities whilst maintaining a controlled and managed form of release.
Amendments in the EAs took the form of modification to the downstream limit on electrical conductivity within the Isaac River and other receiving waters, as well as changes in the flow rate triggers defining the commencement and cessation of release events.
An important point to note is that the amended conditions adopted for the pilot scheme maintained the requirement for release under flow event conditions only, thereby ensuring a controlled and managed change.
Mine water management outcomes
Comparison of release opportunity under pilot and non-pilot conditions shows significant mine water management improvement under relatively few/small release events to date. Specific changes in legacy water volume over the 2012/13 wet season for the pilot mines were as follows:
- Goonyella-Riverside – 17% reduction
- Peak Downs – a 12% reduction
- Saraji and Norwich Park – no net reduction.
Closer analyses of the conditions for, and outcomes of, release during the flow events indicate that the absence of improvement in legacy water volumes for Saraji and Norwich Park is a combination of:
- Hydrological: specific flow conditions within the ephemeral streams into which these mines release experienced over the period of the pilot
- Operational: An apparent inherent conservatism on the part of the mine operators due to the risk of being penalised for breaching regulatory conditions, as well as (potentially) release rate limitations.
Independent of legacy water drawdown outcomes over the period, our assessment indicates that the Pilot conditions improved release opportunity by between 25% and 100% over non-amended conditions, with the variability in improvement dependent on the operational characteristics of the mine and specific behaviour of each release event.
Comprehensive assessment of the releases undertaken against the amended EA conditions determined that the releases met all conditions significant to potential environmental harm and other release-related conditions in the EAs governing the participant coal mines.
Monitoring and water quality outcomes
Downstream water quality was monitored by the Department of Natural Resources and Mines (DNRM), including an EEMP which defined sampling and analysis for a range of water quality parameters at seven monitoring locations, prior to, during and following pilot release events.
Review of the monitoring information to date indicates:
- Mine operators’ managed releases within all required regulatory flow and water quality limits.
- There were no measured effects on salinity levels downstream of Isaac/Connors confluence.
- Short-term effects were only noted for the Isaac River at Deverill.
On the basis of the available information, we identify the following general outcomes regarding the effect on water quality as measured by EC due to pilot scheme mine water releases:
- Isaac River at Deverill – attributable effect. The monitoring location immediately downstream of pilot scheme participant mines and size of flow event volumes providing opportunity to release leads to EC levels elevated above what would be background levels without release. The effects were relatively short in duration (i.e. period of release) with EC levels following release periods reducing to levels not inconsistent with pre-release levels.
- Connors River at Pink Lagoon – ‘no attributable effect’. No pilot scheme releases were made upstream of this location.
- Isaac River at Yatton – ‘no attributable effect’. Flow and EC levels at Yatton were generally very similar to those recorded for the Connors River. There were no observable differences that would indicate effect due to pilot scheme mine water releases.
- MacKenzie River upstream Isaac confluence – ‘no attributable effect’. No pilot scheme releases were made upstream of this location.
- MacKenzie River downstream Isaac confluence – ‘no attributable effect’. EC levels and behaviour at Coolmaringa were generally very similar to those recorded for the Isaac River, with some indication of increased salinity above those recorded at Yatton.
- Fitzroy River – ‘no attributable effect’. EC levels and behaviour at the Fitzroy River monitoring location were generally very similar to those recorded for the MacKenzie River, with evidence of significant contribution of flows from catchments other than the MacKenzie/Isaac/Connors.
Parameters, other than EC, showed similar outcomes in terms of no attributable impact due to pilot mine water releases, and the majority showed levels below adopted guideline values. For example, petroleum hydrocarbons were not detected at any sites and have not been reported to date in any samples. Those parameters that showed one or more levels higher than the adopted guideline values were reviewed further and the following general outcomes are noted:
- Dissolved oxygen (DO) exhibited a high degree of variability across the Basin prior to the wet season (or releases). DO values during the wet season were generally higher compared with the pre-event sample with no apparent relationship to pilot mine water release.
- Levels of dissolved copper (Cu) were generally uniform across the basin prior to the wet season (or releases), ranging from <0.5 (i.e. below detection) to 1.0µg/L. Levels during flow events were also consistent across the locations sampled and indicate no specific relationship to pilot mine water releases. Levels immediately downstream of pilot participant mines varied between 0.6µg/L and 2.6uµg/L and across the wider (and downstream) catchment between 0.6µg/L and 5.6µg/L.
- Levels of dissolved manganese (Mn) exceeded the adopted guideline level for aquaculture at various locations during monitoring, for both pre- and post-release samples. Levels varied significantly both between sample locations and also at individual locations, with no consistent pattern.
- A significant point to note is that dissolved manganese levels in the Isaac River downstream of the pilot mines remained below adopted irrigation and environmental protection guidelines levels for all postrelease sampling.
- Total aluminium (Al) exhibited a high degree of variability across the Basin over the period sampled, with no consistent pattern between recorded levels downstream of pilot mines and those elsewhere in the Basin.
- Similar to total aluminium, levels of total iron (Fe) exhibited a high degree of variability across the Basin over the period of sampling, with no consistent pattern between recorded levels downstream of pilot mines and those elsewhere in the Basin. There is no apparent pattern in Fe levels to indicate impact due to pilot mine water releases.
- Total manganese showed reasonably consistent levels across the Basin, with generally similar recorded levels at all locations for each sampling event. There is no apparent pattern to indicate a relationship to pilot mine water releases.
The observations above are intended to provide informative insight into the conditions as recorded during the November 2012 to March 2013 period. All electrical conductivity data is publicly available through the DNRM water monitoring portal  and once validated, all monitoring results from the enhanced monitoring program, undertaken to support the pilot, are available at the Fitzroy River website. 
As well as detailed data, a summary of the monitoring results from each sampling event is also provided at the Fitzroy River website.
The pilot scheme was evaluated as being successful in terms of:
- Improving mine water release opportunities, particularly when other mines across the Basin showed general increase in water stored over the 2012/13 wet season. Assessment indicates improved release opportunity of between 25% and 100% over non-amended conditions for release events experienced during the assessment period.
- Achieving compliance with all regulatory conditions.
- The absence of material effects on salinity levels downstream of pilot scheme participant mine sites.
Furthermore, the full water management benefit from the pilot scheme may not have been realised due to:
- Conservatism on the part of the mine operators against the risk of being penalised for breaching regulatory conditions.
- Mine release infrastructure/operational limitations (e.g. release capacity).
ROLE OF MARKET BASED INSTRUMENTS
As a component of the overall study, we reviewed the role that market-based instruments (MBIs) could play in managing both legacy and long-term operational mine water within the Fitzroy River Basin. 
MBIs are policy tools that encourage behavioural change through market signals rather than through explicit directives. There are three categories of MBIs:
- Quantity-based (cap-and-trade, bubble and offsets)
- Price-based (auction, subsidies and taxes)
- Market friction (product differentiation and labelling).
There are several pre-requisites for MBIs, particularly quantity-based instruments. However, when considering saline water management in the Fitzroy Basin there are two key pre-requisites:
- Clear and demonstrable link between the rights specified and the environmental outcomes sought (the cap).
- Significant number of potential market participants with heterogeneous characteristics.
Subject to these key pre-requisites being met, our analysis has identified three MBIs with the potential to deliver cost-effective mine water management outcomes in the Fitzroy Basin:
- Cap-and-trade MBIs have relevance to the Fitzroy Basin because they provide a tool to manage total salinity within a cap, while allowing flexibility for different market participants (coal mines) to optimise releases of saline water across operations.
- Bubble trading schemes could potentially be used to increase flexibility in the Fitzroy Basin. Bubble trading schemes appear to have most relevance to geographically constrained areas in the catchment where there is a cluster of mines that would benefit from the ability to coordinate and more efficiently manage salt across the different mines, while acting as a group; and
- Auctions could complement either cap-and-trade or bubble scheme alternatives. Auctions can be used to facilitate the allocation of salinity credits according to each auction participant’s estimation of value. This MBI has been successfully used in the Hunter River Salinity Trading Scheme to manage market power issues and help create an opportunity for new market entrants to acquire credits.
Our assessment approach was based on modelled outcomes for a range of scenarios. The scenarios were assessed using a hydrological model and high level economic assessment.
The hydrological model uses the whole-of-basin Fitzroy Integrated Quantity-Quality Model (IQQM) with a water quality (salinity) component included.
Pre-existing modelling was upgraded or otherwise modified to provide individual, mine-specific water balance simulation for operational coal mines across the Basin. It utilised approximately 120 years of daily data (1889-2007), representing spatial variation (in terms of climate, hydrology, water allocation and use, etc.) across the Basin.
The characteristics of each individual mine site (such as mine water system catchment area, release capacity, current stored water volume and EC) were based on:
- data provided/confirmed by relevant company personnel.
- estimated data where company feedback was unavailable within the timeframe of the study.
Simulation of mine-specific release was based on:
- ensuring consistency with current environmental approvals (EAs) as provided by the DEHP, including Transitional; Environmental Program (TEP)/Temporary Emissions Licence (TEL) conditions where currently applicable.
- representation by an ’aggregated’ release point where more than one is specified in the current EA.
“Total manganese showed reasonably consistent levels across the Basin, with generally similar recorded levels at all locations for each sampling event. There is no apparent pattern to indicate a relationship to pilot mine water releases.”
Consequently, we could simulate point-source contribution to in-stream salinity due to mine water release on a mine by mine basis.
The model’s representation of river salinity levels was based on flow-EC relationships as developed (by DSITIA) for all available contributing sub-catchment areas within the Fitzroy Basin.
The current model configuration inherently includes diffuse-source contribution to in-stream salinity (both natural and man-induced). However, these estimates are not simulated as an explicit, discrete process. Similarly, other potential point source contributions to in-stream salinity (e.g. town wastewater treatment plant releases) are not currently simulated as an explicit, discrete process. The overall contribution of these point sources to in-stream salinity is likely to be minor.
The modelling was used to answer the overarching project question: Can current water release arrangement be improved in a manner that enhances economic, social and environmental outcomes?
A stepped methodology was used to assess the scenarios and explore the impact on legacy and business-as-usual water.
Key issues in the assessment framework, included:
Hydrological constraints: Are there any hydrological constraints, i.e., releases that are limited by the duration and frequency of release events?
Operational constraints: Are there any operational constraints, i.e., releases that are limited by the size of pumps and location of storages at the mines?
Regulatory constraints: Are there any regulatory constraints, i.e., releases that are limited by the salinity levels at the release point, in the tributary, river, or at the Rockhampton Barrage?
Economic: Is there likely to be a net public benefit?
Trading Scheme: Are the critical prerequisites met? Is there a clear and demonstrable link between the rights specified and the environmental outcomes sought (the cap)? Are there a large number of potential market participants with differing characteristics?
Stakeholders: Mines – Do changes improve the current arrangements? Environmental – Are existing environmental outcomes preserved or improved? Community – Are salinity outcomes likely to be acceptable to water consumers (irrigators and potable users)?
Governance: Do the arrangements improve transparency and accountability?
Modelling was undertaken for four scenarios, including:
Base Case: This scenario assumes current EAs apply to all mines and is the scenario against which other scenarios are compared to understand the incremental impact of relaxing conditions around the EAs.
Scenario A: Under this scenario pilot-style conditions are assumed to apply to all mines.
Scenario B: This scenario assumes pilot-style conditions for all mines combined with increased mine releases. Under this option, mine releases were assumed to increase to a maximum of either double the current pump rate or 5 m3/s which ever was the higher.
Scenario C: This scenario assumes pilot-style conditions and increased mine development. This scenario was modelled to identify how close different sub-catchments are to the point where a cap on releases needs to be implemented. This was achieved by iteratively simulating and assessing the salinity impacts of increasing levels of mine development within key mining areas of the Fitzroy Basin. The level of increase was defined in terms of additional hectares of mine-disturbed area coupled with an assumption of similar disturbed area/mine water capture characteristics as that shown generally across the Basin. Pilot-style flow and EC conditions were enforced and the level of increased development was determined as that point at which release opportunities were being significantly constrained compared with current development level assessment outcomes.
The key findings from our assessment are summarised below:
Base Case – current EA’s: Mine water is not in balance for most mines under existing EA conditions (Figure 2). Mines are unable to release sufficient water to balance mine water inflows, with main constraint to release due to ’end-of-pipe’ or other release-point conditions.
Scenario A – Pilot-style conditions for all mines: Pilot-style conditions would result in a significant improvement in Basin-wide water management outcomes for both legacy water and long-term mine water balance. The gains are not equal for all mines; with some mines benefitting more than others, depending on location, release capacity etc.
Scenario B – Pilot-style conditions and increased mine release rate: This scenario, whereby mine releases were increased to maximum of either doubled current pump rate or 5m3/s, confirmed that several mines appear to have operational constraints. These mines could potentially improve release and mine water management outcomes with operational and/or infrastructure modifications.
Scenarios A and B both improved legacy and mine water management without the need for trading across mines. More importantly, the modelling revealed that a key MBI prerequisite, “the need for a cap on releases”, is not currently present in the Fitzroy Basin. While relaxing the regulatory constraints may result in localised salinity impacts, the impacts at sub-catchments and end-of-catchment scales were small and did not result in critical thresholds being exceeded.
Scenario C – Pilot-style conditions and increased mine development: Our results indicated that the Fitzroy Basin currently is not at capacity in terms of salt load either at the sub catchment or whole-of-catchment level. This result is illustrated in Figure 3 for the Isaac River sub-catchment which shows that simulated salinity outcomes for Scenarios A and B remain consistent with both the Base Case outcomes as well as the defined Water Quality Objectives (WQO’s) of the Fitzroy Basin Freshwater Aquatic Ecosystem Water Quality Guidelines (DERM2011).
Figure 4 shows that with increased mine development (Scenario C), simulated salinity levels at the Fitzroy Barrage remain below 600 EC at all times and below 400 EC for more than 95% of days across the 120 year simulation period.
However, iterative assessment of potential mine development’ indicates that MBIs may be warranted in the future at:
- Roper Creek – The assessment found that Roper Creek may be close to the point where a ‘cap on releases’ could be required. Thus Roper Creek might benefit from either a cap-and-trade or bubble scheme MBI in the near future. Feasibility will be dependent on localised constraints, such as tributary water quality outcomes and the number and nature of market participants.
- Upper Isaac – Depending on the location of future development, additional release similar to that for (say) 3 to 4 mines could lead to significant competition for release under the EA type approach. Under this scenario the Upper Isaac may benefit from either a cap-and-trade or bubble scheme MBI.
- Blackwater Creek – Future development leading to additional release similar to that for (say) 1 or 2 mines could lead to significant competition for release under an EA type approach. Under this scenario Blackwater Creek may benefit from either a cap-and-trade or bubble scheme MBI.
When development reaches a point that it is necessary to establish a cap on saline water emissions (to preserve environmental and social values), it is anticipated that the benefits from a trading scheme will quickly exceed the cost of establishing a trading scheme.
Assessment of a range of alternative options to manage salt, demonstrated that the benefits  could readily be in the range of $20-100 million (in present value terms), resulting from reduced capital and operating expenditure (e.g. desalination facilities at the mine, pipeline, pumps and associated labour) and increased economic returns from mining expansion. It should be noted that these are estimates only, and detailed studies on specific options including the location and nature of investment would be required to fully quantify the benefits. In comparison, the cost of establishing a trading scheme is estimated to be in the order of $16-20 million (present value cost over 30 years). These costs included capital costs (monitoring equipment and network), policy and regulatory costs, and recurrent expenditure on network operation, maintenance and infrastructure replacement.
Dawson and the remainder of Nogoa/Mackenzie do not appear to have potential for competition for release, resulting in the need for a ’cap on releases‘ in the medium-term.
In terms of the application of MBI’s to salinity management within the Fitzroy Basin, we conclude that:
- Key prerequisites for a trading scheme to deliver beneficial outcomes are not yet present.
- Extension of pilot style conditions to other mines is currently the most cost-effective solution for both the management of legacy water and long-term mine water.
- Extending pilot style conditions to other mines may result in localised salinity impacts, but impacts at sub-catchment and catchment levels is very small as illustrated by Figures 3 and 4, showing comparative simulated salinity levels in the Isaac River at Yatton and within the Fitzroy River Barrage respectively.
Further, simulated salinity levels within the Barrage remain below 600 µS/cm (well below recommended Australian and International drinking water quality guidelines) under all modeled scenarios;
- Mine operators appear to be releasing less than the optimal volumes of saline water, because they are either concerned about receiving fines or penalty notices or do not have adequate infrastructure capacity (e.g. pumps and pipelines) to fully exploit release events.
- That in the future some form of salinity trading scheme may be appropriate. If the prerequisites are met for a trading scheme it will likely be considerably more cost-effective than the next best alternative.
Several discrete areas (e.g. Roper Creek and Upper Isaac) are relatively close to meeting the key pre-requisites (defined above) for a trading scheme.
OUTCOMES AND RECOMMENDATIONS
Our assessment indicates that current mine water management conditions (i.e. significant “legacy water”) is due to the combination of:
- modified EA release conditions post-2008, in particular ‘end-of-pipe’ water quality requirements
- coincident period (i.e. 2009-2013) of above average rainfall/runoff conditions.
The combination of these factors led to a significant reduction in the ability of mines to release during a period of above average mine water inflows.
Extension of pilot style conditions to other mines is currently the most cost-effective solution. These changes would deliver substantial benefits from both legacy water drawdown and long-term mine water balance perspectives.
Whilst the key prerequisites for a trading scheme to deliver beneficial outcomes are not yet present, several discrete areas (e.g. Roper Creek, Upper Isaac) are relatively close to meeting these prerequisites. In effect, the Fitzroy River system is not currently capacity-constrained from a salt load perspective, but constraints would likely emerge in some sub-catchments if there was additional mine development without reduction in salt load from other sources.
Fitzroy Basin hydrological/salinity assessment indicates that local water quality constraints are likely to be limiting to mine release opportunity, rather than catchment/basin-scale water quality characteristics. Moreover, relaxing regulatory constraints (e.g. shifting from ’end-of-pipe’ to down-stream monitoring) may result in localised salinity impacts, but impacts at the sub-catchment and catchment levels are estimated to be immaterial.
Legacy water problems appear to have been primarily caused by the changes to EAs post-2008 and the consequent shift in water balance of operating mines.
Technical assessment indicates that relaxing regulatory constraints has the potential to have a marked positive impact on legacy water volumes over time compared with current EA conditions. However the rate of legacy water drawdown will depend ultimately on operational investment/readiness and the climatic and streamflow conditions experienced.
Our analysis indicates that mine operators appear to be releasing less than the permitted release volumes, most likely because they:
- operate conservatively e.g. are concerned about receiving fines or penalty notices; and/or
- have operational constraints e.g. do not have adequate infrastructure capacity to fully exploit release event opportunity.
Whilst our assessment has demonstrated that the Fitzroy Basin as a whole is currently “not at capacity” in terms of salt load at a catchment/sub-catchment scale there is an opportunity to enhance the management of mine water release and therefore water quality outcomes within the Basin.
The components of this improved management framework include:
- a well-defined and transparent water quality monitoring, assessment and reporting framework (parameters, locations, criteria)
- extension of modified regulatory release conditions (pilot-style conditions) to other mines
- improved stakeholder support, including information exchange and support to mine operators; optimise mine water management outcomes and release opportunities; and improve understanding of impacts across all stakeholders.
We recommend that these measures be encapsulated within a formal Fitzroy Basin Salinity Management Strategy.
 Electronic access to the Department of Natural Resources and Mines water monitoring portal is available at <http://watermonitoring.derm.qld.gov.au/host.htm>
 Companion document by Marsden Jacob Associates “Background Paper – MBIs Case Studies and Implications for the Fitzroy Basin”, April 2013.
 Benefits in this sense refers to the avoidance of future costs or the capacity for future mine expansion. The MBI would allow coal mining companies through the market to find the most cost-effective way to manage or remove salt.