Maules Creek and the final void

October 8, 2016
The Maules Creek open-cut coalmine.

When then-Minister for the Environment and Water Tony Burke signed over more than 1500 hectares of native vegetation, including endangered woodlands, to Whitehaven Coal in 2013, he did so amid contention and uncertainty. It would not go unchallenged.

Today, a parapet of accumulated earth protrudes from the Leard State Forest. The Maules Creek open-cut coalmine is now fully operational. But when exploitation ceases, the crater left in the mine's place will not be filled for centuries.

The decision to permit the project is part of a much more complex story. While the European Union is making steady progress toward its renewable energy target of 20% by 2020, Australia's regional energy markets have not been so obliging.

In Asia, rapidly developing economies have spurred an insatiable appetite for fuel. Growth needs nutrients to sustain itself, nutrients that Australia can provide in close and plentiful supply.

Huge fortunes were made and lost in the boom catalysed by the Asian demand spike. By floating Aston Resources, former owner of the Maules Creek mining lease Nathan Tinkler became the first billionaire to be listed on BRW's Young Rich List, a position he would prove too intemperate to keep.

Not long after Burke sanctioned the conversion of state forest into a coalmine, he and his party were forced into the shadows. The Coalition came to power claiming it would enclose the nation, a policy deeply at odds with its supposed free-market ideals. While the world's undesirables decay in detention far beyond our purportedly sovereign borders, the cosmopolitan shareholders of Maules Creek and its neighbouring mines have not been banished from our boundless plains.

This is not to say that the Australian mining industry requires the help of transnational capital to pillage the Earth. In the face of increasing international scrutiny of Australia's lacklustre carbon reduction commitments, Whitehaven's managers have made explicit their desire to expand.

When three of the big four banks refinanced a loan for a struggling Whitehaven last year, chief executive Paul Flynn proclaimed it a sign of confidence and solidarity.

One of these banks was ANZ, Australia's largest financier of fossil fuels. In 2014 its board felt obliged to rebut an irksome but vocal minority of shareholders who had the nerve to point out that if carbon-intensive businesses collectively operate on the assumption that they can extract unabated three times more carbon will be sold and combusted than is compatible with the internationally agreed ceiling.

What the world has on its hands is an “unburnable carbon bubble” — each investor's hopes cannot be met simultaneously. This is a textbook collective action problem: communal loss is the sum of individuals trying to win out over their competitors.

Fixing the mess

These problems arise not only when we create a mess, but also when we try to clean it up. Fixing public problems can be costly. For this reason, people will generally try to contribute least to the lemon stock while claiming a disproportionate share of the lemonade.

If you replace lemons with a much less idiomatic and savoury but highly combustible rock, you can picture how Whitehaven plans to leave the Maules Creek site — with as little financial inconvenience as possible.

When the state licence terminates in 2034, Whitehaven will have torn 260 million tonnes of coal from the Earth. Returning to the Earth and community part of what was taken by backfilling is unfortunately just “prohibitively expensive”.

Whitehaven's departing gift to Leard State Forest will be a “final void” — a hole hundreds of metres deep that is predicted to take between three and four centuries to fill. The void is likely to become a terminal sink and become increasingly saline.

The practice of leaving these chasms has been outlawed in the US since the 1970s, a country well-known for the formidable presence of corporate lobbying and correspondingly lax environmental regulation.

Whitehaven is not the only company benefiting from a scorched Earth approach to investment. Two Japanese-owned subsidiaries — Itochu Australia and J-Power — own a total of 35% of the Maules Creek venture. In the neighbouring mines, Boggabri and Tarrawonga, Japanese companies respectively own 100% and 30%.

All are eager to showcase their corporate social responsibility portfolio. A relevant link is invariably located on the main navigation bar of each of their websites, which one can follow for voluminous and extensive material.

To the cynic, this continuity is more disconcerting than assuring. While there are businesses and executives who aim to create a more sustainable and just world, the corporate social responsibility scaffold has been used disingenuously on enough occasions to warrant scepticism.

Corporate responsibility

Financing a coalmine already sits uneasily within any business model purporting to promote corporate social responsibility. Take the Itochu Corporation, part of the mammoth Mizuho Group keiretsu. Itochu is itself an established general trading company, investing in, among many other commodities, mineral and solar energy.

In solar energy, Itochu is proud to identify the “prevention of ozone destruction” as one its chief concerns. But in mineral and resource industries, where climate change is the industry's underlying drawback, the issue is not mentioned.

A genuinely responsible corporate policy in carbon-intensive industries is plainly oxymoronic. Big mining suffers from a serious case of Orwellian doublethink if it plans to expand or even maintain coal extraction while averting climate change. Problems do not arise from emissions alone.

The Maules Creek mine must conform with the Environment Protection and Biodiversity Conservation Act, which governs matters of national environmental significance. One condition of the project approval requires that compensatory offset zones, located beyond the pit shell, remediate the loss of habitat and biodiversity caused by mining activity.

Multiple independent reports have concluded that Whitehaven's offset strategy is inadequate. Areas designated as endangered whitebox woodlands are in fact stringybark open forest, which will not provide a suitable habitat for threatened and migrating species.

Burke knew little of this when he approved the mine. The Northern Inland Council for the Environment sought legal action against the minister in 2013, citing this as a key failing of his decision. The Federal Court determined that it was within the minister's power to approve the project before the offsets had been fully specified and in doing so remarked that the gulf between statutory regulation and environmental preservation was not ideal.

The effects of the mine on the surrounding area are not merely environmental. Nearby residents will inhale or digest coal dust as it is carried by the wind and collects in their water supply, bearing an increased risk of developing chronic disorders, such as cardiopulmonary and kidney diseases.

The antagonistic expansions and contractions of the mining industry and its complex and accumulating effects on surrounding areas can neither be explained nor justified by a narrow fixation on jobs and growth.

Boggabri farmer Alistair Donaldson compares the effects of mines on rural areas to an “opium habit”.

During a boom, mining companies cannot accumulate enough. The mass of high wages and increased demands sucks in employees from surrounding industries and inflates housing prices. Local employers struggle to offer competitive wages and home buyers and tenants are hard pressed to afford homes.

During a bust, mining towns become desolate. Housing prices collapse and local businesses are left with an abundance of stock and no demand. This fate has already befallen Boggabri, just three years into the mining expansion.

Farming solutions

Donaldson's family has farmed the Boggabri region for well over a century. When I visited his farm with the Australian Student Environment Network at the end of September, I was amazed at the knowledge he displayed in each facet of his work, from the individual species of weed on his pasture to the shifts in climate affecting his business.

“Agriculture is part of the problem. But it also has to be part of the solution,” he said.

He explained how maintaining optimal ground cover would help to remove excess carbon from the atmosphere. After the disheartening revelation that carbon dioxide levels had permanently passed the 400 parts per million threshold, it was stimulating to be shown concrete and practicable solutions for the challenge ahead.

When queried about the weaknesses of his ground cover vegetation, a mixture of sub-tropical, perennial species that sustains a light and robust soil structure so highly permeable that it permits no run-off, Donaldson was upfront: “Bushfires. It's the Achilles heel.”

While both Whitehaven and Donaldson produce for profit, the two are diametrically opposed. If the mining industry continues to extract profits, emissions build up will stimulate fluctuating and extreme weather in an increasingly arid climate, multiplying the volume and magnitude of bushfires. Mining cannot expand without crippling agriculture.

Something has to give. Donaldson has given us the beginnings of an agricultural solution. There is still headway to be made at Maules Creek.

[James Monaro is a member of Australian Student Environment Network.]

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