Court decision

Challenge to ERC Calculator — Land Court confirms strict application is not required 

By Damian Roe and Elizabeth Harvey / 08 February 2021
3 min.
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Worthwhile read for: Mining industry professionals

Key points

  • Century Mining Limited v Department of Environment and Science [2021] QLC 3 was published on 2 February 2021.
  • The decision is a Land Court appeal relating to the estimated rehabilitation cost (ERC) for the Century Mine.
  • The Land Court set aside the ERC decision made by the Department of Environment and Science (DES) and substituted it with a proposed ERC amount agreed by the parties, based on expert evidence. In doing so, the Land Court determined that the purpose of the ERC Guideline is to provide guidance, and the ERC calculator is not strictly binding when arriving at an ERC amount. Instead, DES must consider the requirements in section 300(1) of the Environmental Protection Act 1994 (EP Act).

ERC for the Century Mine

Century Mining Limited (Century) owns and cooperates the Century Mine in North-West Queensland, which is an open-cut zinc and lead mine which ceased mining in 2015. Since 2018, Century has been re-processing the tailings to recover zinc. 

Century applied for an ERC decision for the Century Mine. 

DES determined the amount of ERC required for the activities was $230,465,718, confirmed on internal review. 

Century appealed the decision to the Land Court, contending that the ERC should be $173,271,205.71.

ERC Guideline and issues in dispute

The two main issues in this proceeding were:

  1. the design of the covers for the waste rock dump and tailings storage facility; and
  2. the calculation of the ERC amount. 

The first issue was resolved through the Court Managed Expert Evidence (CMEE) process, where the expert witnesses in their Joint Expert Report agreed that the design proposed by Century, if it met certain design requirements, would meet the company’s environmental obligations. 

The agreed estimated costs of implementing the design requirements in the Joint Expert Report did not comply strictly with the ERC Guideline and the approved calculation methodology under the ERC Guideline. However, the Land Court identified that the purpose of the ERC Guideline, made under section 550 of the EP Act is to “provide guidance”. 

Consequently, the Land Court identified that DES is not required, in making an ERC decision, to “slavishly apply the amount arrived at using the approved calculation methodology”.1 The Land Court relied also on section 2.5.1 of the ERC Guideline, which identifies relevant reports, such as the Joint Expert Report, as matters that must be considered in making an ERC decision. 

The decision makes clear that the ERC Guideline, as a statutory instrument, must yield to the EP Act. The key requirement in section 300(1) is that DES must decide the ERC amount based on the estimated cost of: 

  • rehabilitating the land on which the resource activity is carried out; and 
  • preventing or minimising environmental harm, or rehabilitating or restoring the environment, in relation to the resource activity.2

Therefore, the Land Court was prepared to accept the expert evidence and decide that the required ERC amount is $183,916,150.06. 

The case makes it clear that in making ERC decisions, DES does not need to strictly apply the ERC calculator and may consider other evidence, in order to meet the requirements of section 300(1) of the EP Act.

For further information and discussion, please contact our Resources and Energy team.


1 Century Mining Limited v Department of Environment and Science [2021] QLC 3, at paragraph [17]

2 EPA, section 300(1)
 

Authors
Damian Roe
Partner
Damian is a Partner of our leading Resources, Energy and Projects practice.
Elizabeth Harvey
Senior Associate
Elizabeth is a Senior Associate in our Resources and Energy practice.

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