In recent years, the economic growth and success of Australia has been inextricably linked to a boom in the mining and resources sector. Minerals are Australia’s largest export. Apart from the rise of oil and gas mining and production, onshore mining in the form of iron ore, coal and other metals and minerals has grown exponentially. In particular, Australia now holds the title as the world’s largest exporter of iron ore and black coal.
Part two of this briefing (to view part one click here) explores issues in pit to port developments, which are of particular importance in the Australian context. A failure to plan for or around these issues could lead to large project delays and cost blowouts.
Particular issues in the Australian context
Projects in Australia are not hampered by a difficult political environment. That said, the process of obtaining all of the necessary government approvals and private agreements can be long and complicated.
Regulatory approval, land ownership and access
A proponent will have to negotiate leases or licences to those areas required for its construction works and related access. This will range from mining leases to obtaining access to a rail corridor, roadways, port land and the seabed, if a jetty or other structure has to be built. A proponent’s options will depend on its ability to utilise existing public or private infrastructure. Where it has to provide its own infrastructure, it will have to consider the geographical features and the terrain, whether the proposed rail corridor or roadways will cross Crown land, pastoral leases, private land, existing public or private roads or railways.
State or federal regulatory approval will be required for the designated road and rail corridors and for the designation of boundaries for a new port, or any port expansion. The local or shire council will typically be involved, as any new industrial development is likely to have an impact on local roads and the infrastructure of the nearest town.
In Western Australia, proponents have traditionally negotiated State Agreements to cover the grant of corridors over Crown land and for the long-term regulation of a project. In Queensland, the government has designated certain areas around ports or prospective ports as State Development Areas, within which proponents can construct roads, railways, pipelines and other infrastructure. Where the land in question is subject to a pastoral lease or is in private hands, a proponent will have to enter into a long term lease or licence to use or access such land.
If any construction activity is to be undertaken in an existing port, the relevant port authority or owner will have to provide its consent. This may take the form of a bespoke port facilities agreement, which is negotiated with the proponent.
If the project goes ahead, the construction contract will specify which party is responsible for obtaining the necessary approvals, licences, permits or consents.
Interface issues may arise where works are conducted around or in proximity to existing business operations. It will be incumbent on the proponent to ensure that its works do not unreasonably interfere with existing operations or give rise to a nuisance.
Aboriginal engagement and cultural heritage issues
In Australia, a proponent will typically have to manage Aboriginal engagement and cultural heritage issues as part of its land arrangements.
When sites and corridors have been earmarked for a project, the areas must be surveyed for cultural heritage significance. Ancient sacred sites, Aboriginal rock paintings or artefacts may be identified as worthy of protection. The proposed rail corridor, roadways or sites may have to change, or artefacts or rocks may need to be moved to safety.
Proponents must also negotiate Native Title agreements with the traditional owner groups. This can be a lengthy process in itself, involving various groups with competing claims.
A proponent may receive various approvals subject to an undertaking to provide a level of Aboriginal or local engagement, in the form of employment, training or business opportunities. This has to be factored into the project, as it is likely to affect construction and supply contracts.
Given the remoteness and scale of many developments, the procurement of equipment, supplies and labour is a major logistical undertaking.
Companies will have to arrange flights, accommodation, messing, catering and other services for construction personnel at the minesite, in construction camps and at the port. Many such personnel are fly-in fly-out (FIFO) workers, with their home base many thousands of kilometres away. On large projects, it is not unusual for a number of FIFO workers to travel from interstate or even overseas. In most cases, mining companies arrange charter flights between their mine sites and the nearest capital city or regional airports, which are serviced by domestic airlines.
Where miners or contractors propose to utilise expatriate labour, they have to apply to the Department of Immigration and Citizenship for working visas. Similarly, materials, plant or equipment to be imported from overseas will have to be passed by Customs and Quarantine. Workers’ accommodation will be required in the form of permanent camps near the mine site or existing towns, and temporary camps along the access roads or railways and the port to facilitate construction. Temporary camps can be demobilised and moved as work progresses, so that the camps are reasonably close to the workface for the sake of efficiency.
Health and safety
The occupational health and safety of workers is of paramount concern in Australia, especially at mining and construction sites. The workforce will typically perform work in shifts and sites will be strictly monitored to ensure safety, prevent injury to workers and minimise accidents or incidents. Depending on the site, it will be governed by either federal or state occupational health and safety or mining safety legislation. Breaches by a company or its management can lead to strict liability under the relevant legislation.
The dangers of operating in a remote environment are many. Hazards include extreme weather and temperatures, risk of bush fires or flooding. Venomous snakes account for many incidents on remote sites. Tropical diseases are increasingly of concern, although they do not pose the same level of risk as in projects in other parts of the world.
Weather and tidal conditions
The tropical north of Australia experiences a cyclone season each year. Construction projects have to be planned around the cyclone season, which can require shutdown of operations or demobilisation of personnel and equipment, depending on the category of storm.
Cyclones are officially designated by the Bureau of Meteorology. When a Yellow Alert is issued, construction workers typically go into lockdown until an All Clear is issued and clean-up can begin and work can recommence. However, it is not only the actual lockdown period which affects construction. Some cyclones bypass a site, but cause construction delays when torrential rain falls elsewhere causing widespread flooding at a downstream site. Such flooding can take days or weeks to subside. Construction contracts must cater for cyclones and the effect of cyclones in the construction program.
Where port construction is concerned, cyclones will disrupt dredging schedules, especially if dredging vessels have to sail far offshore or to another port to avoid storm surges.
Even in fair weather, tidal fluctuations will have an impact on port construction in northern Australia. For example, the tidal range in King Bay, Dampier can exceed 4.5m (15 ft) and Port Hedland can exceed 6m (20ft).
Environmental approvals and concerns
The regulatory framework for onshore and marine environmental approvals is complex. Offshore waters are governed by federal legislation and onshore projects may be subject to a combination of state and federal legislation for environmental protection and the conservation of biodiversity.
Of concern for port works is the disturbance of the marine environment. This includes the effect of dredge plumes on water clarity, the disposal of dredge spoil and the health of marine life including coral, seagrass and mangroves. Australian marine environments are fragile, and several projects involve works within marine parks or nature reserves.
In Queensland, port developments have the potential to affect the Great Barrier Reef, a UNESCO World Heritage Area, and strict controls are enforced.
Endangered Flora and Fauna
Each pit to port development will require an environmental impact assessment and baseline surveys of the local flora and fauna to be undertaken by duly qualified professionals.
Approvals may fail due to the presence of critically endangered fauna or flora. Alternatively, approvals may be qualified due to the presence of migrating whales, dolphins, nesting turtles, migrating birds, coral reefs, marine grasses and mangroves. Many a project has shown that species of small marsupials, bats, geckos, frogs, groundwater fauna and invertebrates, ants, spiders, and plants have gone unnoticed until discovered in the course of a baseline survey. Such discoveries can delay environmental approvals and bring a project to a halt, while the impact and conservation options are considered.
If a project is allowed to proceed, environmental approval may be granted subject to certain constraints. Dredging or construction may have to cease during the annual coral spawning or turtle breeding season or upon sighting of migrating whales near the dredging or construction zone. The company is also likely to have to monitor and report on environmental issues during the life of the project.
In summary, the considerations for any pit to port project will be numerous. The above is only intended as a brief introduction to the likely issues, which may confront any mining company considering such a project in Australia.