The government has approved a giant coal project, the extension of Australia’s biggest coal mine, BHP’s Mt Arthur mine in the Hunter Valley. BHP is spinning it as pumped hydro. Michael West reports.
Besides putting energy consumers on the hook for funding Eraring, extending Australia’s biggest biggest coal-fired power station, the government has approved BHP extending the biggest coal mine in Australia, Mt Arthur, and BHP has spun it as a green deal.
“BHP has partnered with renewable energy and infrastructure company ACCIONA Energía to explore the development of a pumped hydro energy storage project at Mt Arthur Coal.
“As part of the planned pathway for closure, BHP has gained approval from the NSW Government to extend mining activities at Mt Arthur Coal for an additional four years, from July 2026 to June 2030.”
However, technical experts have said the larger pumped hydro scheme is not feasible, telling MWM the Hunter Valley ‘coal to lakes’ idea faced immense regulatory challenges; for a start, the environmental and First Nations’ approvals which would be required to flood the area, potentially putting indigenous heritage under water.
BHP had been canvassing local communities with the idea that the pumped hydro project would be part of a larger ‘coal to lakes’ project in line with the transformation of the former coal mine region in East Germany. More on this later.
Mt Arthur Coal, the largest thermal coal mine in Australia, has been granted the four year extension by the state and federal governments. Adjacently, the recently held NSW Inquiry into Productive & Beneficial Land Use in Mining has concluded with its key recommendations which show the mining behemoth has bulldozed its way through the ‘red tape’ to continue to earn huge revenues for at least another 4 years.
Detailed within the approval are understood to be ‘tight expectations’ outlined by the Environment Protection Authority (EPA) which has been working with BHP, other agencies and the local community, in the lead up to the approval announced yesterday.
According to a BHP source, the approval “isn’t really a surprise considering the necessity for a sustainable transition and the time needed to balance up the energy grid, as Labor’s renewables charge continues throughout regional Australia.
“While many mine workers will be pleased with the news, blowback will be expected from various lobby and stakeholder groups who have been contesting the extension for a number of years.
“This does not look to be the agencies involved in the approval as even common lingo is now being adopted for key decision makers, such as Tony Chappel (CEO Environment Protection Authority). Terrific to see BHP and state government collaborating and working as one.
A done deal already?
Interestingly, Mt Arthur signed a 5 year agreement with Thiess prior to the modification, the NSW Inquiry into Production & Beneficial Post Mining Land Use concluded recently with key enabling recommendations to progress BHP’s ambition, and NSW Minister Courtney Houssos visited the Mt Arthur site in May 2023 and released a press release that aligned perfectly with the recent recommendations coming out of the Labor led inquiry.
Also the scuttlebutt, said the BHP source, around the announcement is that feasibility study of a Pumped Hydro future land form is being progressed. “If we cast your minds back to the James Joseph whistleblower release (Dec 2024), technical experts were quoted that pumped hydro was found to be ‘not feasible’. So, what’s changed?
While the heat continues to ratchet up around the government protecting whistleblowers, Joseph was recently informed that despite BHP failing to report his medical injury (PTSD due to whistleblower retaliation), BHP would be let off the hook with a ‘formal caution’.
Mr Joseph’s injury investigation went for 13 months and according to sources he is now being denied any investigation materials under the Freedom of Information laws, saying that if it were to be released, others might be reluctant to participate in safety investigations in the future.
According to the same sources, it is understood that Mr Joseph was informed by the NSW Resources Regulator (who also report up to Minister Houssos and the former EPA Secretary Georgina Beattie), that despite it being likely of a prosecution, it would cost the state too much money to ‘hold them to account’ all for “an insignificant fine”.
Joseph continues to allege BHP continues its retaliation against him, including the company holding on to his personal entitlements. The company has also refused to comment over revelations in these pages of a wage theft scandal which affected thousands of coal workers, including some of the 26,000 former and current employees of Mt Arthur.
Coal to lakes?
Further to the feasibility of pumped hydro at Mr Arthur, ecologist and water scientist Peter Hughes told MWM earlier this year the Lakes proposal was a “pipe-dream”, at least the recreational part.
“With the Lakes proposal and the use of the mine voids, I’ve reviewed at least 4 proposals and every few years the NSW Minerals Council does a report. There is no new data. I’ve seen proposals that all of the mine voids can be used. It’s not viable for any recreational use and never will be.
“The groundwater in the Hunter is highly saline and very high in heavy metals. It’s highly toxic for animals. I’ve written letters to them explaining this to them. In Germany it is different. The groundwater must be much cleaner, and there’s high rainfall.
The BHP whistleblower and the secretive plan to turn Hunter Valley coal into lakes
Not only do experts believe the community consultation by BHP in relation to pumped hydro and the ‘coal lakes’ proposal has been poor but they say a pumped hydro project is unlikely to work on a technical basis.
Peter Hughes, who worked 25 years with the NSW EPA and done Environmental Impact assessments on every coal mine in the Hunter Valley and written most of the Environment Protection Licences.
“There is potential for pumped hydro. There was a CSIRO report into the potential for pumped hydro which found it plausible. All you need is a hill more than 100m high. We’ve put the kibosh on the recreational proposal at least four times. Pumped hydro is potentially viable but they have a major problem with it – the water quality. The water is highly corrosive which would clog up the machinery. So technically I think it is unlikely.
“I would say they are trying it on again. They have probably submitted again to the EPA but it’s a dog with fleas.”
To ever get it approved, says Hughes, they would have to get DA consent under EP&A Act, an Environment Protection Licence from the EPA, Water Access Licenses under Water Management Act, and possibly Aboriginal relic destruction licences from NPWS.
To make the water quality viable, what they would have to do is put it through a purification plant before they pump it back up the hill to the turbine. We are talking about a reverse osmosis desalination plant which is extremely expensive and power hungry. It could eat up the majority of the power which the pumped hydro plant is producing.
A Snowy job
The sheer scale of the proposed transition deal makes it a sensitive issue. If you use Snowy Hydro as an example, that’s already at $12B from original price estimates of $2B.
Former HR executive at Mt Arthur James Joseph knew in April 2023 that confidential pumped hydro talks were underway. “I was accountable for shaping the NSW workforce strategy as HR manager and I was kept in the dark. Now I know why they never wanted to have this conversation or share the information with myself and other managers, because what they were doing was questionable – amounting potentially to competition breaches.”
Then there is the political sensitivity. China is at the vanguard of pumped hydro technology yet the political implications of doing such a large deal with the Chinese, let alone any foreign group, are significant. China already has its foot on a lot of assets in the Hunter Valley including mining and wineries.
Michael West established Michael West Media in 2016 to focus on journalism of high public interest, particularly the rising power of corporations over democracy. West was formerly a journalist and editor with Fairfax newspapers, a columnist for News Corp and even, once, a stockbroker.