MERC Newsletter – November 2021

Introduction

Delegates, here is the November MERC Newsletter, please circulate the Newsletter to your fellow Councillors and senior staff this week, 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.

 

Thank You to Departing Delegates & Merry Christmas

Good luck to those continuing Councillors that are standing, we hope to see you as delegates next year. For those that are not standing, thank you very much for your contribution and commitment to MERC over the years. May you all have a healthy, safe and prosperous future.Merry Christmas to you all.

 

COVID-19 Virus Impact on MERC

The NSW Government continues to work very closely with Councils to support communities across the state in response to COVID19 and the changing situations. Hopefully, in 2022 MERC will be able to resume its’ activities in the normal manner as the double vaccination rate is reached (90-95% whatever benchmark they keep shifting to).

 

Next Meetings for the Association in 2021/2022

The Ordinary meeting on 15th October 2021 was the last meeting for the year and went well as a zoom meeting with good speakers. The AGM and Ordinary meeting will be held in Orange at Orange Ex Services Club on 11th March 2022 with a networking dinner and hopefully (if it can be arranged) a tour the day before. The Executive Committee will have a meeting (by teleconference) on Wednesday 9th March 2022 at 9am & minutes distributed before the meeting on 11th March 2022.

 

RDA Orana Proposal

Delegates on 15th October 2021 considered a membership proposal from Orana RDA to be part of the Orana Opportunity Network (ON2) and participation in the UNSW Research Project on the Economic Impacts of Mine Automation in the NSW Orana Region.

After forwarding the proposal and documentation from the presentation to delegates, the decision has been made to join ON2 for 12 months as a Bronze member, then to reassess the benefits during the period whether to consider continuing as a member. The CEO of Orana RDA will sit down with the Executive Officer of MERC to finalise an agreement on what MERC seeks from the membership, to enable a fair assessment of the benefits to occur.

 

CRC for Transformations in Mining Economies (CRC TiME)

MERC is a partner with CRC TiME on a no cost but consultative basis. They have webinars and workshops on their progress with the CRC establishment and their collaboration efforts.  As relevant activities present, delegates will be kept informed on them for participation. The latest forum is outlined in the next paragraph:

CRC TiME held a virtual Forum on Creating Connections 29th November 2021 to 1st December 2021. As a member, MERC has a complimentary full registration which can be transferred to a colleague of MERC or attend as a paid attendee. The Executive Officer will cherry pick the sessions and view the presentations and distribute details to delegates, where relevant.

 

Exposure Bill for the Mining & Petroleum Legislation Amendment Bill 2021

A letter has been received from the Deputy Secretary, Georgina Beattie from the Mining, Exploration & Geoscience Division, Regional NSW regarding the Exposure Bill for the Mining & Petroleum Legislation Amendment Bill 2021, outlined as follows:

“The NSW Minerals Strategy committed to review mining regulations, policies and processes to improve transparency, efficiency and community confidence. The review has led to a number of proposed reforms, including a set of legislative amendments to enable more efficient decision-making, streamline and modernise processes, improve clarity, and compliance. The amendments also support the NSW Government’s commitment to establish the new Royalties for Rejuvenation Fund.

A draft of the Mining and Petroleum Legislation Amendment Bill 2021 has now been released on the Mining, Exploration & Geoscience website, along with the Explanatory Guide. Feedback on the draft Bill by 21 January 2022 with submissions to be emailed to meg.policy@regional.nsw.gov.au

All feedback will be published on the Mining, Exploration and Geoscience website early in 2022. The Bill will be introduced into Parliament in early 2022.

 

Royalties for Rejuvenation Fund Update

The Deputy Premier announced the creation of the Royalties for Rejuvenation Fund in April 2021. The 2021-22 NSW Budget committed to setting aside $25 million each year to the Fund to support the economic diversification of coal mining communities over the coming decades. Coal mining communities will have a key role to play in advising the Government on how to best invest the Fund.

The Fund will support economic diversification in the four coal mining regions. As noted in the Deputy Premier’s media release in May 2021, Expert Panels will be established with representatives from the communities in coal mining regions to input into delivery of the Fund.

The Department of Regional NSW is preparing a suite of amendments to the Mining Act 1992. As part of this package, the NSW Government is proposing to establish under legislation the Royalties for Rejuvenation Fund and its statutory expert panels. This will ensure that coal mining communities guide investments supported by the Fund.

Ahead of the Bill being introduced into Parliament, interim expert panels may be appointed for regions where short-term priorities necessitate timely advice”.

 

LGNSW Special Conference 28th February – 2 March 2022

The LGNSW Special Conference for the debating of motions, trade displays, workshops and conference speakers will be held on 28th February – 2nd March 2022 where MERC will attend with a trade display and the Executive Officer present. The allocation of display stands is underway and MERC is hoping to be placed in a prominent position where it can meet with LGNSW delegates to discuss the benefits as a member of MERC. Investigation and acquisition of appropriate merchandise, display maps and handouts is also underway.

 

Renewable Energy Zones

Recent reference group meetings for the Central West Orana REZ (CWOREZ) were held on 2nd September 2021 and the New England REZ proposed for 4th November 2021 was postponed to a date to be determined after the draft declaration period has closed. Minutes will be forwarded as received.

The Minister for Energy and Environment declared the CWOREZ on 5th November 2021.
The declaration is the first step in formalising the REZ under the Electricity Infrastructure Investment Act 2020. It sets out the intended network capacity (size), geographical area (location) and infrastructure that will make up the REZ. This enables and sets the scope of key legislative functions under the Act, including access schemes and REZ network solutions. 

The declaration follows an assessment of feedback recently received during the draft declaration exhibition period (17 September to 15 October 2021). No changes have been made between the draft and (final) declaration order.  You can read more about the declaration on this webpage. They will provide further updates as EnergyCo NSW moves into the next phase of engagement on detailed design and development of the Central-West Orana REZ. 

For more information about NSW REZs please visit www.energy.nsw.gov.au/renewable-energy-zones or email rez@planning.nsw.gov.au.

 

Rating of Mining Land Relative to Business Rates Update on OLG Guidelines

The Minister for Local Government, Hon Shelley Hancock, had written to MERC on 25th March 2021, confirming that the NSW Government have accepted IPART’s recommendation that mining rates should be set relative to busness rates, primarily to reflect differences in the cost  of providing council infrastructure and services to these properties.

The Minister also indicated that the NSW Government are not contemplating legislating to limit how mining land should be rated relative to business rates by local government, instead Guidelines will be prepared for the local government sector.

In reply, MERC wrote to the Minister offering the expertise of members of MERC to be part of the working party to write the Guidelines. Since then the Local Government Amendment Act 2021 has been passed and some of the changes adopted from the IPART recommendations have been implemented effective from 24th May 2021, with more to come.

In the meantime, the Minister has advised that a Local Government Rating Reference Group has now been established to provide technical input on rating issues and advice how best to meet Council’s operational needs during implementation of the mining rates relative to business rates.

Following an EOI process, an initial meeting was held on 3rd November 2021, with the Reference Group, where rating professionals from Wollonging City, Wollondilly, Blayney, Singleton, Cessnock and Mid Western Regional  Council’s are members of the group. Four of these Council’s are members of MERC so our issues of concern should be raised.

The Minister thanked MERC for bringing this matter to NSW Government’s attention. If there are any queries the OLG Policy Team can be contacted on 02 44284100 or by email to olg@olg.nsw.gov.au

 

Discussion Paper on  Reliable Energy Supply and Coal Mining Options

At the 15th October 2021 Ordinary meeting, delegates discussed the inadequacies of the existing energy supply networks using examples in Cobar, Lachlan and Warren Shire Councils where the need exists to upgrade existing energy supply assets to provide reliable energy supply to regional industries and communities.

A working party was established consisting of Crs Dom Figliomeni (Wollonong City Council), Mark Hall (Lachlan Shire Council) and Chris Roylance (Forbes Shire Council) and Executive Officer to develop a discussion paper for distribution to delegates. Some excellent details have been gleaned to date and will be distributed to delegates in due course as information and possible action by respective members and MERC, in due course.  This paper is almost complete and will be forwarded when to hand..

 

Related Matters of Interest – Mining and Energy Issues

“BHP Offloads Coal Stakes” Industrial Careers,9th November 2021 article “BHP has sold its stake in a metallurgical coal joint venture in Queensland. Stanmore Resources has agreed to buy BHP’s 80 per cent stake in BHP Mitsui Coal (BMC) for more than $1.6 billion.

BMC owns and operates the Poitrel and South Walker Creek mines in central Queensland’s Bowen Basin. “As the world decarbonises, BHP is sharpening its focus on producing higher quality metallurgical coal sought after by global steelmakers to help increase efficiency and lower emissions,” BHP’s Minerals Australia president Edgar Basto said in a statement. “Under this agreement, BMC will transition to Stanmore Resources, an ASX-listed company that has established relationships with traditional owners and strong engagement with their workforce and local communities.”

BHP will run BMC until the sale is complete in mid-2022, and has agreed to provide “transitional services” to Stanmore.

Meanwhile, BHP is also looking to sell its open-cut thermal coal mine at Mt Arthur in the NSW Hunter Valley. “BHP remains open to all options and continues consultation with relevant stakeholders,” Mr Basto said. 

CEFC Backs Hydro-Trucks” The Australian, 9th November 2021 article: “Government is investing in the world’s heaviest fuel cell electric trucks. The investment was made by the Clean Energy Finance Corporation (CEFC) on behalf of the Australian Government.

In its first investment through the Advancing Hydrogen Fund, the CEFC has committed up to $12.5 million to help Ark Energy Corporation produce green hydrogen to power what are expected to be the world’s heaviest fuel cell electric trucks.

The commitment will finance five purpose-built, zero emissions trucks and the construction of hydrogen production and refuelling infrastructure to fuel them, helping deliver a more sustainable zinc supply chain.

The hydrogen fuel cell electric trucks will deliver zinc ore from Townsville Port in Queensland to the Sun Metals Refinery, where they will refuel with green hydrogen produced on site, before taking zinc ingots back to the port in a 30 km clean energy round trip.

Ark Energy’s SunHQ hydrogen hub will include a 1MW PEM electrolyser, compressors, storage and refuelling infrastructure that will produce up to 158 tonnes of green hydrogen per annum. It will be powered by renewable energy from the Sun Metals 124 MWac solar farm at the zinc refinery.

The 140 tonne rated Hyzon Motors hydrogen fuel cell trucks are expected to be the first of their kind in Australia, replacing their diesel equivalents in the Townsville Logistics fleet. The initial five zero emissions trucks are expected to abate about 1,300 tonnes CO2 per year.

The project is also supported by $3.02 million funding from ARENA, which has announced conditional approval, to be paid upon the commissioning of the refuelling facility and delivery of the five fuel cell electric trucks.

Morrison Government & the Mad World of Fossils” Renew Economy, article – 28th November 2021: “The Australian government has added to the existing madness of the gas sector with its latest gas infrastructure ‘plan’, released in late November 2021. This joins a long list of other government ‘plans’ designed to prop up the interests of powerful industry and fossil fuel lobby groups and donors to politicians at the expense of taxpayers, the economy and the environment. There are basically four separate markets for gas:

  • Residential and commercial consumers, for whom most of the cost of gas is not the wholesale price – transmission, distribution and retailing, reflected in both unit prices and high fixed charges, are the big factors. And, for most of them, gas is a small component of business or household operating costs
  • Electricity generation, where gas provides peaking power and, when it is the marginal generator, it can (and does) charge high prices
  • Large industrials, for whom wholesale gas prices and volatility are big issues
  • Liquefied Gas (LNG) exports

Unless you understand all of these markets, and the subtleties within them, you are at risk if you continue to consume gas or invest in gas production or supply infrastructure. The economics for most residential and commercial consumers are clear: getting off gas saves you money and cuts your emissions, as shown by studies funded by Energy Consumers Australia and others.

However, these sectors face a seasonal problem: our appallingly inefficient buildings and appliances mean we use a lot more gas (and electricity) in winter. Rooftop solar produces less electricity in winter, when we need it most for heating. 

On the demand side, we can free up winter renewable electricity supply capacity by switching from inefficient electric heating and hot water technologies, lighting and appliances to efficient electric options and upgrading building thermal performance. Heat pump technologies and induction cooking can replace gas.

For electricity generation, home heating (and cooling) is a major driver of peak demand – when gas generation is most likely to run. So energy efficiency, demand management and energy storage, including rapid response batteries, can kill much of the demand for gas generation.

Existing gas generators may be able to make some money at times – after they write down their capital value. New gas generators have no hope of being profitable. Then again, with the right financial structures and government subsidies their losses can be written off for tax deductions and subsidised by taxpayers. 

Large industrial gas consumers are in an awkward situation. Historically, they have relied on cheap gas (at $3-5 per gigajoule) to be profitable in Australia.

Many of their plants are old and inefficient, and struggle to compete with large scale global competitors. Increasing gas price volatility increases business risk for additional manufacturing investment, and high gas prices (driven by international markets), add to their woes.

Many have closed down and more will follow if they keep using gas. There is increasing interest in efficient electrification with renewables; for example the alumina industry is exploring Mechanical Vapour Recompression, a form of heat pump. 

LNG export markets are very complex, and courageous investors may expand Australian fossil gas production, though risks are rapidly increasing. Recent international gas prices have been very high, and Australian LNG producers have been able to ride this wave – at the expense of local consumers. 

A combination of factors has driven international LNG prices to crazy levels. Putin has turned down the gas supply to Europe and the UK. China has been buying up spot market LNG for several reasons, including clearing the skies for the Winter Olympics, managing serious air pollution problems and positioning itself for a low carbon future.

An unusually hot northern hemisphere summer has driven gas-fired electricity demand higher to supply more cooling of buildings, depleting storage. Investors have shifted away from gas. Civil society has sent strong messages to investors to divest from fossil gas. And governments in most countries have failed to drive sufficiently aggressive energy efficiency and renewable energy policies and programs.

Existing Australian LNG producers can capture windfall profits – after big losses in recent years. Potential investors in new developments have to make tricky judgements about how fast global economies will shift to zero emission solutions (on demand side as well as supply) instead of seeing fossil gas as a transition option.

Anyone who understands the urgent messages being sent by climate science would avoid such investments, even though recent market signals look attractive. Both the carbon emissions and the (much under-recognised) impacts of methane leakage from production undermine the attraction of gas.  

As we see in every transition, short term signals will be confusing. But the long-term fundamentals are clear to those who step back from the short-term noise”. 

New Hub for Critical Digs” Industrial Careers, article, 29th November 2021: “Australia’s first “critical minerals hub” has been slated for the New South Wales Central West. The NSW Government has launched its Critical Minerals and High-Tech Metals Strategy, which it describes as “a new frontier for the NSW mining sector”, which will make the most of untapped rare earth mineral deposits in the Central West.

Under the strategy, the state has committed to establish Australia’s first Critical Minerals Hub, promote exploration for critical minerals resources, develop supply chains and attract investment for critical minerals resources, downstream processing and recycling. Deputy Premier Paul Toole said “the future global economy and the pathway to lower emissions will be founded on minerals that NSW is rich in, such as cobalt, rare earth elements and copper”.

He said the elements are “vital in enabling our vibrant growth industries like advanced manufacturing, batteries, defence and aerospace, technology-enabled primary industries and renewables”. “This strategy has been in the making for a number of years,” he said.

“These minerals are going to be the future with solar panels, renewables, aerospace and defence. They need these rare earth metals and minerals and we’ve got them right here. That’s why we want to be a global supplier and lead the world. By having this strategy we are now creating the opportunity for investment in NSW — companies will now want to explore, extract and be involved in advanced manufacturing. However, the strategy is more of a broad outline for now, with no funding or timelines attached”.

Clean Energy the Answer to Australia’s Climate Question, Clean Energy Article, 18th Nov 2021. Kane Thornton, CEO:

After much internal angst, the Federal Coalition finally committed Australia to a target of net-zero emissions by 2050 and flirted with the possibility of increasing the country’s 2030 emissions targets. However, the fact that the Coalition was only able to convince the doubters in its ranks to support net-zero by 2050, the absolute bare minimum in a global context, shows that the Liberal Party and Nationals remain divided on the question that has stumped and frustrated Australian politics for the past 15 years.“A target of 100 per cent renewable energy by 2030 would demonstrate the Coalition is serious about delivering action on climate change ahead of the federal election. The past few months have seen a dramatic shift in the climate change debate in Australia.

The shift in the way that climate change is considered in Australia has been remarkable, in terms of both the sudden pivot towards greater action and the speed at which it has occurred. While much of the public debate was driven by the COP26 summit in Glasgow, the scale of the change has surprised many.

In the past few months, organisations that were previously hostile to increased action on global warming have suddenly changed their tune, unashamedly embracing the need for greater action and evangelising the economic and employment opportunities of renewable energy.

The most shameless of these sudden climate converts is News Corp, an organisation that has done more to demonise renewable energy and delay action on global warming in Australia than any other. The other notable climate U-turn came from the Business Council of Australia, whose recent call for Australia to reduce its 2030 emissions by between 46 and 50% is in stark contrast to its claims made in 2018 that such a target would be “economy-wrecking”.

While it is incredibly tempting to sneer at the hypocrisy of these organisations and dismiss them as climate change charlatans, a far more pragmatic course is to welcome their new-found support and work with them to increase the momentum behind action on climate change and Australia’s renewable energy transition. The Clean Energy Council has adopted this approach through its Renewable Energy is Here Now campaign, increasing its prominence in the News Corp stable and working with the newly enlightened organisation to promote the enormous benefits of renewable energy – both for the economy and the planet.

The size of the shift in the climate change debate seemingly caught the federal government off guard. The fact that Prime Minister Scott Morrison initially wasn’t planning to attend COP26 shows that he underestimated the groundswell of public support for Australia to play a meaningful role in the global climate change response. This left him scrambling to come up with a credible target, putting him in a difficult position with recalcitrant members of his own government on an issue that has toppled more than its fair share of Australian political leaders.

While the Prime Minister’s ability to come to an agreement with his party to commit Australia to a target of net-zero emissions by 2050 is a landmark in the otherwise checkered and underwhelming history of Australian climate politics, it does little to improve Australia’s reputation as an international climate laggard.

A net-zero target by 2050 is yesterday’s news in international climate circles, with the major focus at COP26 on significantly increasing 2030 targets. This was a bridge too far for the government, which was unable to get such a target past the Nationals and the Liberal hard right, leaving Australia in the same position as a climate pariah that it was in before COP26.

At the time of writing, Federal Labor is reflecting on and hasn’t yet committed to a 2030 emissions reduction target. The starting point must be the current projections based on the strong abatement that has already been delivered, largely through renewable energy and state government leadership. However, given the pace of change, the potential of renewable energy and the public demand for climate action, there will be strong expectations that Federal Labor will go a lot further than the 37% reduction already projected for 2030.

Thankfully, throughout the recent debate there has been a much greater appreciation of the important role that renewable energy can play. Recent modelling by the Clean Energy Council shows that Australia could reduce its emissions by 44.5 per cent if it were to source all its electricity from renewables by 2030.

Meeting this ambitious goal would require a series of key policies, which the Clean Energy Council has outlined in its Roadmap for a Renewable Energy Future. The roadmap clearly lays out the steps needed for Australia to meet all its domestic electricity demand with clean energy by 2030 across nine key elements:

  1. Electrify Australia: power the Australian economy and industry with wind, solar, hydro, bioenergy and battery storage.
  2. Empower customers and communities to make the switch to clean energy.
  3. Build a strong, smart, 21st-century electricity network.
  4. Maximise the creation of quality clean energy jobs and a local supply chain.
  5. Provide greater support and certainty for coal communities and industry as the phase-out of coal generation accelerates.
  6. Modernise Australia’s energy market and its governance for the clean energy transformation.
  7. Turbo-charge clean energy innovation.
  8. Decarbonise Australian industries using clean energy.
  9. Put Australia on a path to becoming a global clean energy superpower that exports renewable energy to Asia and beyond.

Achieving the goal of powering Australia with renewable energy by 2030 would not only put us well on the way to our target of net-zero emissions by 2050, it would also catapult us to the forefront of the global renewable energy transition and shake off our reputation as a climate laggard. It would also set Australia up to become a clean energy superpower that exports its abundant clean energy resources around the world to help facilitate the global drive towards net-zero.

The Roadmap for a Renewable Energy Future provides a credible way for our politicians to significantly reduce Australia’s emissions, restore our international reputation and position us to take advantage of the growing global demand for low-carbon energy.

Whether either major party has the courage or foresight to adopt such an ambitious and visionary platform with a federal election looming is another question”.

 

 

Disclaimer The comments and details in the articles in this newsletter do not reflect the views, policies or position of the Association or its member Councils and are sourced and reproduced from public media outlets by the Executive Officer to provide information for members that they may not already be exposed to in their Local Government areas

Contacts

Clr Peter Shinton (Chair) peter.shinton@warrumbungle.nsw.gov.au 0268492000 or Greg Lamont (Executive Officer) 0407937636, info@miningrelatedcouncils.asn.au.

Comments are closed.