Record $2.9m penalty for mine's unlicensed water take to fund rehab of heritage-listed swamp

Australia Broadcast Center

01-05-2025

An agreement between the New South Wales water regulator and a mining company that drained millions of litres of surface water from Sydney's drinking catchment without a permit will fund the rehabilitation of a heritage-listed swamp.
The Natural Resources Access Regulator (NRAR)
The watchdog found the mine drained up to 5 megalitres of water a day, the equivalent of two Olympic swimming pools, between 2018 and 2023 without a licence.
At the time the EU was agreed, it dwarfed the previous largest agreement obtained by the watchdog, which was approximately $360,000.
NRAR confirmed that as part of the deal, Illawarra Coal Holdings would fund a three-year program to restore 340 hectares of Wingecarribee Swamp in the NSW Southern Highlands.
Wingecarribee Swamp is a unique montane peatland rich in flora and home to the endangered giant dragonfly.
Wingecarribee Swamp is a remnant of a late glacial swamp overlying prehistoric sandstone.
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NRAR director of investigations and enforcement Lisa Stockley said the swamp was an important area in the Sydney drinking water catchment.
"While they did have groundwater licences, they didn't actually have surface water licences," she said.
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[Wingecarribee Swamp] was chosen because water was taken from the Sydney water drinking catchment and it plays a very important part in the water quality.
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Lisa Stockley says funding the rehabilitation project at Wingecarribee Swamp is a great outcome.
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Improved surface water monitoring
Established in 2002, Dendrobium Mine is an underground mining operation at Kembla Heights that primarily produces metallurgical coal.
It is a supplier to Australia's biggest steelmaker, Bluescope Steel, at nearby Port Kembla.
Illawarra Coal Holdings Pty Ltd was owned by South32 at the time of the breach, before it was sold to mining consortium GM3 in August 2024.
Dendrobium Mine at Kembla Heights, south of Sydney, is now owned by company GM3.
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Ms Stockley said GM3, as the mine's current owner, had responsibility for managing "the expenditure of the funds".
"[Illawarra Coal Holdings Pty Ltd] was required to pay a sum of money to NRAR in regard to the investigation costs and monitoring costs of this EU," she said.
"They are looking at a whole range of compliance agreements and are looking at better ways of monitoring surface water take."
Historical damage to stay
According to NRAR, Wingecarribee Swamp has a long history of environmental disturbance, including peat mining in the 1960s, the creation of a reservoir in 1974 that flooded 50 per cent of the original swamp, and a huge structural collapse of the peat beds in 1998.
Ms Stockley said the rehabilitation project, involving the Illawarra Local Aboriginal Land Council and landholder Water NSW, would not be able to fix some of these significant historical issues.
The endangered giant dragonfly is found in Wingecarribee Swamp.
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"We acknowledge it's not a restoration project. It can't be restored, but the area can certainly be improved,"
she said.
The restitution works are expected to facilitate training and employment opportunities and will include vegetation surveys and weed removal, as well as the identification of threatened species like the critically endangered Wingecarribee gentian and endangered leek orchid.
Ms Stockley said the project was a great example of "restorative justice", delivering direct benefits to the community and the environment.
"It's a good outcome," she said.
Calls for environmental rehab fund
Ms Stockley said EU's were "really effective enforcement tool" that could help avoid lengthy court processes.
"But if the undertakings aren't abided by, NRAR would take the matter back to court," she said.
Georgina Woods is head of research and investigations at the Lock The Gate Alliance.
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Georgina Woods, from national grassroots organisation Lock The Gate Alliance, echoed this sentiment but said there should be more ways to hold mines accountable and for rehabilitation works to occur.
"NSW doesn't have in place a fund to ensure there is money in the future for long-term rehabilitation from coal mining," she said.
"This outcome … draws attention to the need to put in a place a fund so that we can keep on funding project like this."
The rehabilitation is expected to be complete by mid-2027.
GM3 and South32 declined to comment.