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Legislative Council - Fifty-Second Parliament, First Session (52-1)
2011-07-06 Daily Xml
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OLYMPIC DAM EXPANSION

The Hon. M. PARNELL (16:59): I move:

That this council calls on the state government to ensure that all waste management practices for the proposed Olympic Dam Expansion, including the management of surplus ore and tailings, meet or exceed world's best practice.

This council will shortly face one of its most important decisions as it considers the granting of a new indenture for the Olympic Dam mega expansion. We need to get this right to ensure that our state is not left with a toxic legacy.

This motion today is very simple, and many would say that it is a little bit lacking in ambition. Surely the people of South Australia can expect in this day and age that any new project in a wealthy first-world nation such as Australia—especially a project as large and important as this one—would be subject to the most stringent environmental conditions. I think it is eminently reasonable as an expectation, therefore, the people of South Australia should fully expect all their representatives in this parliament—including those from both Liberal and Labor—to support this motion.

Certainly BHP Billiton believes that it should be subject to the world's best practice standard because, in a forward to the supplementary EIS released in May, Dean Della Valle, the President of the Uranium Customer Sector Group of BHP Billiton wrote:

BHP Billiton, as the world's largest mining company, is well placed to develop a project of this importance and magnitude while ensuring best practice in health, safety, environmental management and community engagement.

In February this year, BHP Billiton chairman Jac Nasser wrote in a letter to the Australian Conservation Foundation:

The Olympic Dam project uses world's best practice and many areas of the project will establish world's leading practice and set a new benchmark for others to follow.

So does the federal ALP, stating in its national platform in August 2009:

Labor will ensure that Australian uranium mining, milling and rehabilitation is based on world's best practice standards.

Certainly the Premier of our own state thinks so as well, the Hon. Mr Rann announcing in May 2009, when the original EIS was released:

It [the expansion project] has got massive benefits for South Australia, but I will insist that world's best practice in terms of the environment is complied with.

I do not need to remind Liberal members of this chamber that a desire for the most stringent environmental conditions is a genuine concern for them as well. The member for MacKillop in another place said on ABC Radio in May this year:

...the Liberal Party's always been very supportive of BHP Billiton and this particular project. It is an incredibly important project for the state...but I've always said—and Isobel Redmond has always said—that BHP has to meet the most stringent environmental standards, and I think the government have said the same thing. I don't think any of us are going to sit back and allow BHP to be environmental vandals, and I don't think that BHP expect to behave in that way either.

With all this seemingly genuine acceptance from Labor, Liberal and the company itself, for world's best practice environmental management at Olympic Dam, I am surprised and disappointed that we have come so far in this process with basic elements of the waste management practice proposed for the Olympic Dam expansion project clearly not, by any definition, meeting world's best practice.

To give one very simple example, the company's plans for the management of tailings, waste and rehabilitation at Olympic Dam do not comply with existing commonwealth requirements and standards for the management of radioactive tailings waste at the Ranger uranium open pit mine in the Northern Territory. The reason the Ranger mine is an appropriate comparison is that it is the only other open pit uranium mine currently operating in Australia; therefore, its conditions are current best practice standards in Australia.

For the Ranger mine, the commonwealth requires that the environment must be protected from the hazards and risks of radioactive tailings waste for at least 10,000 years. Conditions and regulatory standards have been set for the existing Ranger uranium mine that all tailings must be disposed of into the pit 'in such a way to ensure that the tailings are physically isolated from the environment for at least 10,000 years' and to ensure 'any contaminants arising from the tailings will not result in any detrimental environmental impact for at least 10,000 years'.

So, we have one uranium project in the Northern Territory with these worlds best practice conditions and, yet, for another uranium mine here in South Australia, the company behind the project does not intend to go anywhere near meeting this standard.

I can give another example that is even closer to home. The Terramin Angus mine near Strathalbyn was required to double line the whole of its tailings pond. As I will explain to members shortly, the Olympic Dam tailings ponds are not even single lined. In fact, they are not even half lined; in fact just 4 per cent of the tailings ponds at Olympic Dam will be lined.

So, why does a wealthy company like BHP Billiton expect lower standards and less stringent requirements for the Olympic Dam mine expansion than current industry standards for a mine at Strathalbyn? How can anyone—the Premier, the opposition or BHP Billiton—themselves claim that the waste management at Olympic Dam goes anywhere near being world's best practice when it is not even South Australian best practice, let alone Australian best practice?

For the benefit of members who have not had a chance to read the 20,000 or so pages of the original environment impact statement or the supplementary EIS released by BHP Billiton, I will quickly outline what are the proposed waste management practices for the Olympic Dam mega expansion. Before I do that, I need to give members a quick refresher on why effective management of ore and tailings is so important. I will not concentrate on the radioactivity because, as members all know, the recent meltdown at Fukushima in Japan has already provided us with a terrible example of what dangers radioactive materials pose when they are not appropriately handled.

Instead I will focus on another aspect which makes these materials so dangerous, and that is acidity. On the whole, metals are not found in pure seams but as small mineral grains dispersed within a host rock. There are many types of these minerals, collectively known as sulphide minerals. A basic sulphide mineral has a metal attached to sulphur, like copper sulphide or iron sulphide. Sulphide minerals present an enormous problem for mining worldwide because of the way they weather. When these minerals are exposed to air and water, they dissolve to form acid. Typically, rainwater falls on to the host rock and, as it drains over, the sulphide grains oxidise into free particles and sulphuric acid. This acid is good at drawing out and holding other free metals in solution.

What happens next depends on how much is exposed. If the amount is small, dissolution is caused by a relatively slow chemical oxidisation. Because it happens slowly, acid neutralises quickly and metals drop out of solution as secondary minerals. These secondary minerals can be protective as they can be quite insoluble and form a cover against water. However, if the amount is large, such as the case at Olympic Dam, a general acidity build-up creates perfect conditions for extreme acid-loving bacteria that feed off the ore body, acting as a catalyst for the oxidation reaction, dramatically speeding it up and causing a snowball effect.

This biological oxidation is extremely difficult to treat, and it has a very large impact on the environment. Large scale oxidisation is an enormous problem for mining because the acid solution, known as acid drainage, is often very strong, with a pH typically lying between 1 and 3. The strong acidity draws out and carries metals far in excess of any kind of environmental guideline and holds them in a form which readily transfers it into living tissue. It generally contains heavy metals such as lead, arsenic, mercury or cadmium.

The exact composition of acid drainage reflects that of the ore body, and in some of the worst cases will include uranium. There are two particular areas of concern at Olympic Dam: the radioactive tailings and the management of the overburden and the surplus ore. First, the radioactive tailings: tailings are the most potent waste component of a mine. They are waste product of metal extraction: high grade, finely crushed ore particles found at the bottom of a tailings dam, mixed with fluid to create a toxic sludge.

The current 400 hectares of low-lying tailings at Olympic Dam will be increased to 4,000 hectares and will reach a height of 65 metres. That is an equivalent area to about 2,000 football fields. For each of the nine new dams proposed, the central decant pond and a little extra will be lined with 1.5 millimetre HDPE plastic. The plastic will only cover 16 hectares of each dam, a maximum lining of around 4 per cent of the proposed 44 square kilometre tailings facility. As a consequence, the EIS makes it clear that BHP Billiton expects the tailings dam to leak—and leak it most certainly will.

According to the Australian Conservation Foundation, up to 8.2 million litres of liquid radioactive waste each day through the first 10 years of operations will leak, and some 3.2 million litres per day through to the year 2050. This will cause a mound of seepage into the groundwater below the so-called storage facility that would affect groundwater levels for up to six kilometres. BHP Billiton estimates that around 1.5 billion litres of toxic tailings will seep out every single year. It will take between 800 and 10,000 years before acidity would be depleted from these tailings.

Upon completion of works, the tailings storage facility will have a radioactivity level in the order of 10,000 to 20,000 becquerels per litre, which will almost certainly make it the largest and most toxic radioactive tailings dam in the world. The leachate will be horrendous, containing radioactive materials and other toxic substances in a pool of sulphuric acid. The expectation that this toxic liquid will leak for thousands of years is simply not acceptable, and it is certainly not the current commonwealth statutory regulatory requirement for the Ranger mine.

The current tailings dam is already leaking and is quite likely to have contaminated the underlying aquifer. The scale of the proposed tailings storage dam, as part of the Olympic Dam expansion, will dramatically increase the size and rate of this contamination. To get anywhere near world's best practice management, BHP Billiton must be required to prove that they will prevent further contamination of local groundwater and that they will line a sufficiently high percentage of the tailings area to achieve a standard to effectively prevent leakage.

BHP Billiton should also have to reveal the cost of investment in these basic environmental protection measures—for example, to effectively line the tailings piles to prevent leakage and to protect local groundwater—that they are seeking to avoid in their plans in the supplementary EIS by only lining some 4 per cent of the tailings storage facility.

The company has deep pockets and should be willing to pay to match their commitment to not just world's best practice but, according to their chairman, world's leading practice. The people of South Australia have a right to see the investment relationship between increasing the area of lining and reduced leakage rates.

In the original EIS submission, BHP Billiton offered (but did not commit to) a number of different options to manage or cap the tailings storage facility when completed. It gave sound (but expensive) measures along with ineffectual (but cheap) alternatives. Ominously, the supplementary EIS suggests BHP Billiton will take a step backwards from even the cheapest and least effective option outlined in the original EIS and use a non-vegetated limestone cap. Once again, this is far below world's best practice.

The second major area of concern is the rock waste heap, or rock storage facility, and there are actually two parts to this. First, there is the overburden, the ore that will take about five years to dig up and stockpile and, secondly, the class A material, which is essentially low grade ore that is uneconomic to process at the moment but the company may think about processing it in the future. This class A material will be stored in the so-called low grade ore stockpile, or LGS. The environmental effect of the rock waste heap is not adequately described in either the EIS or the supplementary EIS. This is a clear flaw in those statements, as the waste heap is likely to be second only to the tailings dam in its potential to cause major ground level pollution.

Inexplicably, there appears to be no protection from erosion and no vegetation cover as part of site rehabilitation. The class A material is going to be stored on the south-west tip of the waste heap over the existing airport. It will not be covered for at least 40 years, in case it becomes economically viable to process. This huge quantity of class A material will generate acidic leachate containing heavy metals, which will quite likely include toxic uranium, copper and other metals. The proximity to the Roxby Downs township of class A material is deeply concerning and presents a genuine and unacceptable risk to local vegetation, flora and fauna and the nearby residents of Roxby Downs.

The unsubstantiated claim that it is not practical to rehabilitate in the desert is not backed by recent Australian and overseas projects. BHP Billiton must be required to fully rehabilitate all its waste rock dumps. Rehabilitation is a massive cost, and it should not be left to taxpayers. As a comparison, members should consider the considerable federal government financial liability as a result of inadequate rehabilitation at Rum Jungle mine in the Northern Territory for a project that was less than one-hundredth the size of Olympic Dam.

Without effective rehabilitation and appropriate management of the tailings and waste rock piles, BHP Billiton is effectively passing onto the government of South Australia the responsibility for the mining legacy at Olympic Dam—a legacy the commonwealth government recognises will last for at least 10,000 years.

In the only equivalent uranium open pit mine project in Australia, the Ranger uranium mine in the Northern Territory, the commonwealth has insisted that this responsibility remains with the company. BHP Billiton's risk reduction for its legacy, as described in the EIS and the supplementary EIS, is almost non-existent. For all intents and purposes, that land will never again support animal and plant life, and as such will be exposed to the full extent of weathering.

The best practice waste principle of either 'fully wet' or 'fully dry' management to minimise acid seepage is ignored by BHP Billiton as a cost-cutting measure. Surely we have learnt something from our own recent history. Let us look at a previous BHP project, the Brukunga mine near Mount Barker, which ceased operation in the 1970s. The Brukunga mine made the company about $10 million in today's money.

The state government sold the indemnity to BHP Billiton for $75,000, which is about $750,000 in today's money, yet the cost of remediating this site is of the order of $50 million for major earthworks (such as the tailings dam and waste heap) and around $600,000 annually in water collection and treatment, and this will be an annual cost for the taxpayers of South Australia for the next 200 years unless more comprehensive rehabilitation is carried out.

In terms of size, the Brukunga site has an eight megaton waste heap. Olympic Dam will have a 242 megaton waste heap, which is 30 times as large. The cost of rehabilitation is already five times the value of the ore that was extracted, with an ongoing liability for years and years and years. So, what would genuine world's best practice tailings and rock waste management actually look like?

The Australian Conservation Foundation believes that the Rann state government should require BHP Billiton to do the following three things: first, to prevent leakage of liquid radioactive waste in mine operations from the proposed tailings storage facility, including requiring BHP Billiton to fully line the area of this facility; secondly, to dispose of radioactive tailings into the pit to ensure isolation of the tailings from the environment and to ensure no detrimental environmental impacts for at least the same minimum 10,000 years as the regulatory standard that is required by the commonwealth for the radioactive tailings and open pit mine operations and rehabilitation of the Ranger mine in the Northern Territory; and, thirdly, to provide a costed rehabilitation plan for the proposed open pit at Olympic Dam, including the extent required for the disposal and isolation of tailings into the void of the proposed open pit with backfill or partial backfill with low-grade ore and waste rock, and to provide a commensurate rehabilitation bond from BHP Billiton.

I find it quite abhorrent that, in the 21st century, we are prepared to allow a private company to come into our state, make a huge toxic mess and then not properly clean up after itself, leaving the risk and the financial legacy for our children to manage. The Premier, the mining minister and the company are very happy to talk about world's best practice environmental management at Olympic Dam, but that is not what has been proposed so far by BHP Billiton for the Olympic Dam expansion—far from it; in fact, it is not even South Australian best practice. So I will be very interested to see if the government supports this motion.

If the Labor members opposite do vote in favour, they will be keeping faith with the public commitment made by Premier Rann in May 2009 when the original EIS was released. For the benefit of members I repeat his words: 'I will insist that world's best practice in terms of environment is complied with.'

A vote in favour of this motion is also an indication that the government believes that the management of the tailings and waste rock at Olympic Dam, as described by BHP Billiton in their EIS and supplementary EIS, is simply not adequate. It will mean that the Rann government believes BHP Billiton should be subject to the current minimum Australian regulatory standard: the requirement to effectively isolate their hazardous waste for the 10,000 years that the commonwealth believes those wastes pose a risk to the community.

The people of South Australia are getting a little bit sick of politicians who promise one thing and deliver another. This motion will test whether the Premier was genuine in his previous public commitments on the environmental impacts of this project. Finally, I will give notice to members now that as we are approaching the winter break, an expected end to this session, I will be bringing this motion to a vote on the next Wednesday of sitting, 27 July.

Debate adjourned on motion of Hon. J.M. Gazzola.

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