Delegates, here is the June 2019 MERC Newsletter.This newsletter has a lot of important information in it for you to read, please circulate this to your fellow Councillors and senior staff, so they can appreciate and understand the excellent work the Association and you are doing on behalf of your Council and community, with regard to mining and energy related matters.
Update on the Voluntary Planning Agreement Steering Committee
Another meeting of the Steering Committee is to be held 23 August 2019 to consider the position paper by MERC (to review Umwelt’s Worker Domicile Model and to identify any impacts which are not included in that model which MERC considers should be the subject of financial contributions through VPAs, plus the methodologies for their calculation).
The Committee agreed to work together to develop a VPA framework agreement (including scope and calculation methodologies) for consideration at the next Committee meeting to be held on 23rd August 2019 in Sydney. Both parties agreed that the future of the Committee should be considered if no substantive progress was made at the next meeting.
On 10th May 2019 MERC members agreed that they would support such a mixed contributions model approach consisting of any of the following:
- A model utilizing a % of Capital Expenditure and/or a cents per Cents per Production cost;
- A combination of % Capital Expenditure and/or Cents per Production cost of 70% and a Worker Domicile Model of 30%;
- A worker Domicile Model based upon a sliding scale which recognises the economic befit for the host Council;
- Each Council has the opportunity to negotiate their own VPA models irrespective of the aforementioned models.
MERC has submitted a paper on the VPA framework agreement including the scope and methodologies for these mixed contributions models and options if use your own models, as agreed to by the MERC VPA working party. Despite this, it was further agreed that if these methodologies are not agreed to or substantive progress can’t be made during the negotiations, then the Chair of the VPA Steering Committee is to be advised that negotiations will cease and MERC will withdraw from the Committee. Feedback from NSWMC is that they don’t think MERC’s paper is a barrier at this stage and there is no indication as yet they will or MERC will withdraw. Early days!
Meanwhile, Glenn Wilcox (Life Member, Warren Shire Council) has provided his “Mining Calculator” to the VPA working party to trial as another option and comments will be provided to delegates about this model in due course. Gunnedah, Lachlan & Singleton are trialing it.
Resources for Regions (R4R) versus a Royalties for Regions – Media Release, etc.
MERC will continue to canvas the new NSW Government for changes to the current Resources for Regions program to resemble a Royalties for Regions one. There is widespread support for changing the existing program to a Royalties for Region program with a set percentage being allocated to mining and energy affected Councils for infrastructure, social and economic impact addressing.
The Executive Officer recently had preliminary discussions with Hon Kevin Anderson, Minister for Better Regulation and MP for Tamworth on the need for the Resources for Regions model to be revamped. He said he had received representations from Gunnedah Shire Council, in his electorate and was keen to pursue changing this. A further meeting with he and the Executive Officer will be held soon on this issue, update him on the VPA and PhD projects .
Invitations have been sent to the Minister for Regional Development (Barilaro), Minister for Planning (Stokes) and Minister for Western Region (Marshall) to attend future meetings in 2019 to talk about the need for changes to the Resources for Regions model and to meet with delegates.The NSW Opposition has only recently sorted their portoflios out and the relevant Shadows will be pursued in due course.
NSWMC are keen to be involved with discussions with Ministers on changing the Resources for Regions model and will be undertaking their own lobbying and are happy to work with MERC on this as well.
Regional Advisory Forum (RAF)
Given the changes to the Planning and Environment portfolios in Cabinet recently (Hon Rob Stokes, Minister for Planning & Public Places) is back in charge of this very important portfolio, consequently, it is not known if RAF will be retained nor is it likely that a further meeting will be held within the next few months. If it is scrapped, this will mean that a lot of important relevant information that delegate Cr Hasler (Gunnedah Shire Council) regularly relayed to MERC, will not occur.
Next Meetings of Association for 2019
The next Executive Committee meeting will be on 8th August 2019 at 2pm and the Ordinary General Meeting next day on 9th August 2019 at 9am, both meetings will be held in the Club York second floor meeting rooms, 99 York St, Sydney, same as for the February meetings.
Mid Coast Council have now confirmed they will host the November meetings in Gloucester on 7/8th November 2019 and preliminary discussions with Donna Hudson from the Council regarding details, has been held. Accommodation options will be forwarded in due course.
The meeting cycle for 2020 will be determined at the Annual General Meeting. Dates will be confirmed by the Executive in consultation with the host Councils, but by sticking with the pattern of second Thursday/Friday in the aforementioned months is what MERC is working on for your diaries.
The Association at its May meeting in 2018, adopted a Marketing Policy to ensure membership increases by targeting more renewable energy development affected LGA’s in NSW and to formalise and stregthen the membership campaign. If any delegates have any colleagues in Local Government that may be interested in being part of our voice, please contact the Executive Officer.
Unfortunately, delegates would be aware that Wentworth Shire Council has not attended very many meetings and has recently appointed a new General Manager and following a review of their various memberships and the establishment of the Far South West Joint Organisation Council has recently withdrawn from the Association citing the circumstances of mining in their LGA had changed.
The Executive Officer is still pursuing Coonamble Shire Council and had further discussions with the Mayor this week, now that they have engaged a new General Manager, have withdrawn from Orana Joint Organisation of Councils, it was agreed a submission be now forwarded to the Council General Manager to take to Council. This will include an invitation to attend the next MERC meeting in Sydney in August 2019.
Speakers for next meetings of MERC
The Executive Officer has confirmed the following speakers for the meeting in Sydney 9th August 2019:
- Felicity Greenway, DPE (PIE), Acting Executive Director of the Integrity & Ethics Unit to address delegates on the 19 recommendations of the Kaldas Review Report, which the DPE (PIE) have adopted all of them and progress with them;
- Tony Corbett, Port of Newcastle, Trade & Business Development Manager, for an update on mineral movements out of the Port of Newcastle recent changes;
- David Kittoes, Executive Director, Resource Assessments and Business System, DPIE on his role and on any changes proposed with planning assessments;
- Dr Alex King or Kristina Erzikov & Jessica Rossell, DPIE, Resources Planning and Geosciences for an update on their review of monitoring mining processes in NSW.
MERC is awaiting confirmation from the following speakers for future meetings when congratulating them on their re election and ministerial appointments:
- Hon Adam Marshall, Minister for Agriculture and Western NSW, National Party;
- Hon Rob Stokes, Minister for Planning & Public Spaces, Liberal Party;
- Hon Matt Kean, Minister for Energy & Environment, Liberal Party;
- Hon John Barilaro, Deputy Premier, Minister for Regional NSW, Investment & Trade
Other relevant Opposition party members and government senior officers will also be pursued for meetings as required when known formally as they were only announced 3rd July 2019.
Life Membership Updates – Mitchell, Connor and Cr Brady OAM
Life membership badges, plaques and certificates will be presented to Cr Lilliane Brady OAM and Col Mitchell at the August Ordinary meeting in Sydney with Chris Connor opting for Gloucester in November 2019. Both Col & Lilliane have confirmed their attendances.
Coal Seam Gas Policy
The amended Coal Seam Gas Policy was adopted with some minor changes. However, a Notice of Motion will be submitted to the August meeting by Cr Mark Hall, Lachlan Shire Council, proposing that further changes be included in relation to the double casing of bores. He will submit a paper on the arguments for it for delegates consideration.
Thereafter a copy of the amended policy will be forwarded to delegates for their information and/or consideration. Still awaiting the NOM details from Cr Hall.
Research Fellowship Update
Delegates decided to go with the University of Technology Sydney (UTS), (Dr Alexey Voinov and Dr Juan Castilla-Rho) with Peter Dupen as the PhD student to undertake the PhD Research project on participatory modelling of social licensing pathways in view of it being “shovel ready”. This still leaves MERC with the option of undertaking a similar project with the University of Wollongong (UoW) SMART unit on a different topic in due course.
In further recent discussions with the PhD student, arrangements are being made to formalise the grant application and the development of a Memorandum of Understanding (MOU) with the UTS which will outline details on insurances, performance measures, exit strategies, roles, finances, etc. However discussions on the projects are yet to occur.
The MERC working party will be involved in this and on how the project will work to benefit MERC members in due course. Peter Dupen and Juan Castilla – Rho will address delegates at the August meeting on progress with the project, grant options and possible projects.
The NSW Minerals Council CEO has been approached about being part of this PhD project as a sponsor and the CEO requested a submission which has been forwarded to him. Since then, the Executive Officer, PhD student Peter and Professor Juan Castilla – Rho have been invited to present the case to the NSWMC CEO who at this stage seem interested in sponsorship. T
he Director Policy, NSWMC has informed the Executive Officer that NSWMC are keen to work with MERC irrespective of the VPA negotiations on this project and the Resources for Regions changes. Fingers crossed that they come on board.
NSW Minerals Council Health, Safety, Environment and Community Awards
The Executive Officer was invited to be on the judging panel of the subject awards for the Environment and Community categories with three other people with relevant backgrounds. An extensive judging process was undertaken on 26th June 2019 and the awards will be announced and presented on 5th August 2019. The Executive Officer will be in attendance as guest.
Related Matters of Interest – Mining and Energy Issues
“Santos Gas plan has hurdles to clear: Stokes” Peter Hannam, Environment editor says the minister in charge of assessing the $3 billion caol seam gas project pro;osed by Santos for the NSW north west says the process is ingoing, downplaying speculation that the approval is imminent. Rob Stokes the Planning & Public Spaces Minister told the Herald the Berejiklian governmnet had made no decision on its assessment of the controversila Narrabri Gas Project, contrary to media reports it was “on track to be approved” by the years end.
“In NSW we make no apology for having robust and thorough processes for major projects which have significant implications for the state, its people and its resources” Mt Stokes said.
The plan to drill 850 CSG wells many of them within the Pilliga state forest, is being considered by the Department of Planning, Industry and Environment.
Deputy Premier and Resources Minister John Barilaro said “there was no deadline for detrmining the application”, adding the Independent Planning Commission would need to sign off on it. For further details refer to www.smh.com.au.
“Mine hits paydirt after 16 year wait” Edward Boyd, Daily Telegraph, 22nd June 2019 writes
A proposed coal mine on the NSW Central Coast has been approved by the NSW government after a 16 year application process.
The Wallarah 2 coal project at Wyong has been granted a mining lease and will be able to extract up to 5m tonnes of export quality thermal coal each year. The proposed underground mine will support more than 1000 direct and indirect jobs during construction, 300 direct jobs in the mining operation for the 28 years of the mine, and another 500 indirect jobs in the building, transport and other associated sectors.
The joint venture mine is managed by Wyong Coal Prt Ltd which is 82.25% owned by Korean mining company Kores. The mine is predicted to generate more than $600 million in economic turnover in the Central Coast economy over it’s lifespan.
NSW Minerals Council CEO, Stephen Galilee welcomed the decision: “This is a very positive sign that the recently elected NSW government is serious about backing regional jobs and investment. “
“ Coal plans aims for aboriginal advance” 1st July 2019, Industrial Careers writes:
A bid has been launched to build a $2 billion Indigenous-led coal-fired power station in Collinsville in North Queensland. Brisbane-based Indigenous company Shine Energy says its planned project could create about 2,000 jobs during its construction phase and 600 once operations begin, with a focus on Indigenous employment.
Local are expected to welcome the notion, with Collinsville’s population having declined by 50 per cent over ten years, leaving the town struggling to survive. Shine Energy Australia said if gets approval, the Collinsville project would be Australia’s first high efficient low emission ultra-super critical coal-fired power. The company is also looking at building a solar PV farm to use for auxiliary power.
Queensland’s Labor Government has a 50 per cent renewable energy by 2030 commitment, and Australian Conservation Foundation spokesperson Gavan McFadzean says the Collinsville project is unnecessary. “We shouldn’t be pitching our economic prosperity and jobs to the industries of the past, they should be to the future,” Mr McFazdean said.
“This project just does not pass the test when it comes to clean energy. Collinsville has some of the best solar radiation capacity anywhere on the planet so that’s where we think the future of Queensland’s energy needs are and that’s where the Queensland Government thinks it’s future is.”
Shine Energy CEO Ashley Dodd said investors are being courted. “We’ve had discussions with Credit Swisse anywhere between the $2 billion mark there is a lot of interest out there in the equity and debt market,” Mr Dodd said. “There is plenty of interest outside Australia but it would be great to have the national banks of Australia actually step up and commit to their reconciliation action plan.” Refer www.industrialcareers.com.au
“Floating nuclear plant sets sail” Industrial Careers, 1st July also reports;
A floating Russian nuclear power plant will soon take to the seas. The power plant called the Akademik Lomonosov has been in construction for almost two decades, but will next month be towed via the Northern Sea Route to its final destination in the Far East.
The 144-metre long platform painted in the colours of the Russian flag will float next to a small Arctic port town of Pevek, nearly 6,500km from Moscow. It will be used to supply electricity to settlements and industries in the area, which are mostly involved in extracting hydrocarbons and precious stones.
The Admiral Lomonosov will be the northernmost operating nuclear plant in the world. Just two million Russians reside near the Arctic coast in villages and towns similar to Pevek, but their work generates as much as 20 per cent of country’s GDP.
Proponents say floating nuclear power plants can supply massive amounts of energy to remote areas without long-term commitments, but the concept of a nuclear reactor stationed in the Arctic Sea has drawn criticism from environmentalists.
Greenpeace has dubbed the Lomonosov platform “Chernobyl on Ice”. Rosatom, Russia’s state-owned nuclear energy company, has pushed back against this nickname, saying the criticism is ill founded.
“It’s totally not justified to compare these two projects. These are baseless claims, just the way the reactors themselves operate work is different,” said Vladimir Iriminku, Lomonosov’s chief engineer for environmental protection.
“Of course, what happened in Chernobyl cannot happen again…. And as it’s going to be stationed in the Arctic waters, it will be cooling down constantly, and there is no lack of cold water.”
The scale is indeed very different, with the Chernobyl plant having produced up to 4,000 megawatts, while the Lomonosov can manage a maximum of just 70 megawatts.
Nuclear authorities have drawn more specific parallels with the 2011 Fukushima accident in Japan. Project engineers say they paid attention to lessons learned at Fukushima.
“This rig can’t be torn out of moorings, even with a 9-point tsunami, and we’ve even considered that if it does go inland, there is a backup system that can keep the reactor cooling for 24 hours without an electricity supply,” said Dmitry Alekseenko, deputy director of the Lomonosov plant.
Experts at Bellona – a nuclear monitoring NGO – say 24 hours might not be enough to prevent a disaster. The floating reactor comes with a price tag of around AU$450 million, and its designers are looking to enter production of more units.
Rosatom has reportedly spoken to clients from Asia, Africa and South America to purchase next iterations of Akademik Lomonosov. For further details refer www.industrialcareers.com.au
“Warwick Giblin now Adjunct Professor at the University of New England” This information is distributed to delegates to show that MERC only associates with and uses the best consultants available with an interest in MERC activities and this linkage may benefit MERC with potential PhD students in the future as per our Strategic Plan.
Note the following from Warwick: “Humbled and honoured to advise that I have been appointed Adjunct Professor at the University of New England (UNE). This is an honorary position attached to the School of Law. My consulting activities with Oz Environmental Pty Ltd remain unchanged.
UNE has a strong rural focus and am looking forward to sharing my operational experience with staff, students and other stakeholders of the School of Law, the School of Business and more broadly across the Faculty of Science, Agriculture, Business and Law, as appropriate.
At the end of the day my objective is to do whatever I can to improve the environmental, social and economic outcomes for rural society”.
“Mining to push NSW towards surplus with no royalty increase” New South Wales mining royalties are at record levels and forecast to keep the state budget in surplus over the forward estimates to 2022-23. (Courtesy Ron Zwicker, Wollongong City Council, from an article in the Australian Mining Review recently this article and the one following):
“New South Wales mining royalties are at record levels and forecast to keep the state budget in surplus over the forward estimates to 2022-23, despite the sector having no major impact on the 2019-20 state budget. Mining royalties in NSW are estimated to deliver almost $8 billion, or an annual average of $1.97 billion, to the state over the next four years. In the same period, NSW budget surpluses are expected to average $1.7 billion.
Mining communities across NSW will also reportedly welcome the Treasurer’s move in keeping his pre-election commitment to not increase royalty rates. “Strong royalty revenue is being delivered without increasing royalty rates, unlike other states where royalty increases have been proposed,” NSW Minerals Council chief executive Stephen Galilee said. “Keeping this pre-election commitment will help to protect mining jobs across regional NSW and make NSW a more attractive destination for global mining investment.”
NSW Treasurer Dominic Perrottet in his ‘heartfelt tribute’ recognised a miner in the public gallery at the Parliament, saying, “He knows, as we do, just how much we depend on our miners for their contribution to our economy, and just how much they depend on us to do the right thing by them with policies that help, rather than hurt.”
Galilee pointed out “that there are around 25 mining projects in the NSW planning system, which could use an approval to generate more royalty revenue. Approving these projects would deliver significant benefits for mining communities, for the NSW budget and for the NSW economy more generally,” he concluded.
“Coal to virtually disappear from 2050 electric power system” Coal is forecast to almost completely disappear from Australia’s electricity system by 2050 if governments do not attempt to keep plants online with subsidies, according to the Bloomberg NEF (BNEF) New Energy Outlook 2019.
Coal is forecast to almost completely disappear from Australia’s electricity system by 2050 if governments do not attempt to keep plants online with subsidies, according to the latest economic analysis in the Bloomberg NEF (BNEF) New Energy Outlook 2019.
Coal-fired capacity is predicted to fall from 25 gigawatts in 2018 (generating 63 per cent of the country’s electricity), to 18 gigawatts in 2030, and just six gigawatts in 2040. Power stations will instead be powered by lower-cost renewables, paired with flexible technologies like batteries, pumped-hydro and gas.
These technologies will ensure the power sector does its part in keeping global temperatures from rising more than two degrees Celsius, at least until 2030. Renewables are already the cheapest source of new generation in Australia, and their costs will continue to fall, according to BNEF.
“Australia’s existing fleet of ageing coal plants, which have been the backbone of the electricity sector for years, will be the last coal generators in the country,” BNEF head of Australia Leonard Quong said.
“Cheap renewables, firmed with a variety of storage technologies, have set Australia on a path to achieve low-carbon electricity by 2050. The future grid will be underpinned by cheap wind and solar, with batteries and pumped hydro to smooth variability, while gas and long-duration storage will provide additional backup to the market.”
“Our analysis suggests that governments need to do two separate things – one is to ensure their markets are friendly to the expansion of low-cost wind, solar and batteries; and the other is to back research and early deployment of these other technologies so that they can be harnessed at scale from the 2030s onwards,” BNEF’s New Energy Outlook director Seb Henbest added.
Consumers also play a key role in this transformation, according to Quong. Households and businesses buying solar, batteries and increasingly electric vehicles represents “an economic tidal wave” that will reshape the market.
They have installed around 10 gigawatts of solar on their rooftops today, with the figure set to surge to 38 gigawatt by 2030 as the costs of solar continue to fall and new business models make solar even more accessible to consumers, according to the report.
By 2050, rooftop solar capacity will increase to 61 giga watt, enough to supply nearly one quarter of the country’s electricity demand. At the same time, Australia will invest $US107 billion ($155.6 billion) into renewable energy generation, with coal receiving almost no new capital.
New Energy Outlook 2019 is the result of eight months of analysis and modelling by a 65-strong team at BNEF, based on the announced project pipelines in each country, plus forecast economics of electricity generation and power system dynamics.
It assumes that current subsidies expire and energy policies around the world remain on their current bearing.
“Norway’s sovereign wealth fund is divesting from coal and oil”. From Industrial Careers, 17TH June 2019: The country’s Government Pension Fund Global must offload billions in stock after Norway’s parliament approved tighter investment rules.
The fund was already prevented from investing in companies that derive more than 30 per cent of revenue from coal, and now cannot invest in companies that mine more than 20 million tonnes of coal annually or generate more than 10 gigawatts of power from coal.
The fund holds stakes in commodities giant Glencore, as well as investments in Australian companies BHP, South32 and AGL Energy.
Norway’s sovereign wealth fund will also offload some stakes in oil and gas explorers and producers, but retain shares of integrated energy companies like Royal Dutch Shell and ExxonMobil.
The fund was set up specifically to push petroleum revenues from the nation’s North Sea oil fields into welfare and other social spending.
It has grown to the point that oil and gas companies now represent just 5.9 per cent of its equity investments, with stakes in more than 9,000 companies worldwide.
The Government of Norway is also the majority shareholder in Equinor – the company looking to drill for oil in the Great Australian Bight.