Newcrest Mining (ASX:NCM) has been ordered to immediately cut the amount of dust pollution being produced by its huge Cadia gold-copper mine in the NSW Central West – even if it means cutting production.
That’s after the NSW Environmental Protection Authority (EPA) found the mine was failing clean air standards.
In a statement issued late Wednesday, the EPA threatened to suspend Cadia’s operating permit after it found the mine’s main vent was emitting “unacceptable” levels of dust pollution into the community.
This is a big deal for the company and its US suitor, Newmont and its US$17.8 billion all paper offer for Newcrest.
Cadia is Newcrest’s most important mine and is forecast to produce around between 560,000 and 620,000 ounces of gold in the year to June 30 (second in gold behind the Lihir mine in PNG with a forecast output of up to 820,000 ounces in 2022-23).
Cadia though is Newcrest’s most important source of copper with production in the year to June forecast to be in a range of 95,000 to 115,000 tonnes – total group output for the June 30 year is estimated to be 135,000 to 155,000 tonnes for the group as a whole (most of the remainder coming from Telfer in WA and Red Chris in Canada).
Newcrest did not issue a statement on Wednesday in reply to the EPA’s announcement and investors are hoping for something today, especially about any costs involved in fixing the problem.
In its March quarterly report Newcrest had this to say about Cadia’s performance “Cadia achieved its best safety performance on record with no recordable injuries during the quarter, reflecting the benefits of a detailed safety review undertaken in the prior period.
“The site is focused on further embedding its safety culture to ensure everyone remains committed to identifying and addressing potential hazards and risks.”
“Mill throughput rates are expected to continue ramping up towards 35Mtpa during the June 2023 quarter with no further scheduled maintenance planned. Newcrest continues to work proactively with the New South Wales Department of Planning & Environment to satisfy all conditions for the permitted processing capacity increase to 35Mtpa in a calendar year.”
A footnote revealed an obligation to produce an independent report on air quality: “The modification approved in December 2021 to increase the permitted processing capacity from 32Mtpa to 35Mtpa is subject to conditions including Newcrest commissioning an independent audit report to the satisfaction of the New South Wales Department of Planning & Environment Secretary in relation to Newcrest’s approach to managing and minimising the off-site air quality impacts of the project.”
That independent audit has obviously not satisfied the EPA which said in Wednesday’s statement that “Test results provided in response to the EPA’s previous Prevention Notice, and issued to Newcrest subsidiary, Cadia Holdings Pty Ltd, show the mine’s main vent is releasing an unacceptable level of dust.”
EPA Chief Executive Officer, Tony Chappel said in the statement that Newcrest’s Cadia mine continues to fall well short of its legal obligations to meet clean air standards.
“We require the mine to take all necessary steps to ensure dust emissions are significantly reduced and this may include a reduction in production,” Mr Chappel said.
“If Newcrest cannot show its subsidiary is taking immediate action to comply, the EPA will take appropriate action which could include suspension of the licence, seeking court orders or, issuing further directions.
“We know this is strong action, but we will not shy away from doing what we must to prioritise human health and the environment.”
Several new conditions have also been included in the licence variation to address community and environmental concerns about impacts on air quality.
The mine will now be required to undertake vent emission monitoring regularly and provide a monthly report on dust discharge from one of its main vents, the EPA said in the statement.
“Additional reports will also be required on lead dust fingerprinting research, analysis of dust impacts and sources, an independent health risk analysis, and an updated Air Quality Impact Assessment.
“The variation also requires the mine to undertake works to manage dust generation underground, in addition to variations provided in April 2023 to manage the risk of dust from the tailings dam.
“Cadia have developed and implemented an ongoing dust suppression plan for the tailings dam and are required to monitor its effectiveness and provide monthly reports on works undertaken,” the EPA said.
