Felton Hybrid Energy Project

Initial Advice Statement

15 February 2008

Table of Contents 
Introduction .............................................................................................................................................. 3  1.1  Project Overview .................................................................................................................................. 3  1.2  The Proponent ....................................................................................................................................... 3  1.3  Outline of Proposal ............................................................................................................................... 4  1.4  Purpose and Scope of Initial Advice Statement .................................................................................... 5  2  Description of the Project ....................................................................................................................... 7  2.1  Project Location .................................................................................................................................... 7  2.2  Background to the Project ..................................................................................................................... 7  2.3  Project Justification and Alternatives.................................................................................................... 9  2.4  Project Components ............................................................................................................................ 10  2.5  Felton North Coal Mine ...................................................................................................................... 10  2.6  Coal Preparation.................................................................................................................................. 14  2.7  Processing of Coal using the Hybrid Energy System.......................................................................... 15  2.8  Resources required .............................................................................................................................. 17  2.9  Timeframe for Project ......................................................................................................................... 18  3  Project Benefits and Costs .................................................................................................................. 19  3.1  Project Benefits ................................................................................................................................... 19  3.2  Estimated Project Costs ...................................................................................................................... 19  4  Existing Environment ............................................................................................................................ 20  4.1  Climate ................................................................................................................................................ 20  4.2  Topography ......................................................................................................................................... 20  4.3  Soils and Land Use Suitability ............................................................................................................ 20  4.4  Remnant vegetation............................................................................................................................. 21  4.5  Surface water ...................................................................................................................................... 22  4.6  Ground water ...................................................................................................................................... 22  4.7  Air Quality .......................................................................................................................................... 22  4.8  Noise and Vibration ............................................................................................................................ 22  4.9  Existing ecosystems ............................................................................................................................ 22  5  Measures to Control Potential Environmental Impacts ................................................................... 25  5.1  Air ....................................................................................................................................................... 25  5.2  CO2 Emissions .................................................................................................................................... 25  5.3  Ground Water...................................................................................................................................... 26  5.4  Surface water ...................................................................................................................................... 26  5.5  Water Conservation............................................................................................................................. 27  5.6  Water Quality ...................................................................................................................................... 27  5.7  Hydrology ........................................................................................................................................... 28  5.8  Land Management............................................................................................................................... 28  5.9  Transport ............................................................................................................................................. 30  5.10  Flora and Fauna................................................................................................................................... 31  5.11  Native Title and Cultural Heritage ...................................................................................................... 31  5.12  Visual Amenity ................................................................................................................................... 31  5.13  Environmental Management ............................................................................................................... 32  5.14  Hazards and Risks ............................................................................................................................... 32  6  Stakeholder Consultation ..................................................................................................................... 33  1 

Ambre Energy Limited
ACN 114 812 074 Level 6 Grant Thornton House 102 Adelaide Street Brisbane QLD 4000 Australia Tel: Fax: +61 (0)7 3009 9180 +61 (0)7 3009 9181

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Initial Advice Statement – Felton Hybrid Energy Project

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1
1.1

Introduction
Project Overview

Ambre Energy Limited is proposing to build and operate a world-class petrochemical plant producing synthetic crude oil and dimethyl ether 1 from coal, and co-generating electricity using an Integrated Gas Combined Cycle (IGCC) system. The project will be designed to be ready for CO2 capture and storage. The project is known as the Felton Hybrid Energy Project and is located near Felton, 30km south west of Toowoomba; see Figure 1.1.

Felton Hybrid Energy Project

Figure 1.1 - Felton Hybrid Energy Project location The Proponent

1.2

The Project will be undertaken by a wholly owned subsidiary of Ambre Energy Limited, an unlisted Australian public company based in Brisbane. Ambre Energy Limited was formed in June 2005 for the purpose of developing and commercializing new technologies for the more effective use of coal as a source of energy, and to

1

Dimethyl ether or DME is a simple non-toxic ether (chemical formula CH3OCH3) that is attracting world wide attention as a potential clean diesel replacement and as a potential fuel for fuel cells.

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develop complementary coal mining projects. As of December 2007, it had over 160 shareholders and had expended over $17 million developing its technologies and projects. The company has been developing its technologies since its inception, including the evaluation of a number of potential sites and testing its proprietary Hybrid Energy System on coal, both in large scale laboratory trials and at its pilot plant facility in Utah, USA. Following this evaluation phase, the Felton Hybrid Energy Project was selected as the first project to be developed due to low mining costs, the relatively high reactivity of the coal and the close proximity to infrastructure. Ambre Energy is committed to creating a project which is sustainable and which meets or exceeds the expectations of local community and government stakeholders in the areas of environmental, safety and risk management.

1.3

Outline of Proposal

The Project will be developed in 3 stages: Stage 1 Stage 1 of the Project will involve the development of two major components. First, a 12 million tonnes per year (Mtpy) open cut coal mine and coal preparation plant will be developed with a capacity to produce 6 Mtpy of washed coal. Second, a petrochemical plant will process the washed coal using Ambre Energy’s Hybrid Energy System (HES) to produce synthetic crude oil. This Stage 1 of the petrochemical plant will itself be developed in two successive stages. Stage 1A will involve the construction of a cluster of retorts capable of pyrolysing 2 3 Mtpy of washed coal to produce 3.6 million barrels per year (10,000 bbl/day) of synthetic crude oil. Synthetic gas (syngas) will also be produced by the retorts and by subsequent gasification of the spent coal (char) discharged from the retorts. There is sufficient syngas produced to co-generate all electricity required for internal consumption (about 30MW) using gas engines. The object is to commission Stage 1A by the first quarter of 2010. Stage 1B will double the processing capacity of the HES plant to 6 Mtpy of washed coal, thereby producing a total of 7.2 million barrels per year (20,000 bbl/day) of synthetic crude oil. A DME pilot production plant will also be added. The syngas from the retorts and the char gasifiers will first be fed through the DME pilot plant to produce 100,000 tonnes of DME per year (300 tonnes per day). Tail gas from the pilot plant will then be used to generate electricity and steam for further internal energy requirements. Stage 1B is scheduled to be commissioned by the third quarter of 2011. During Stage 1, Ambre Energy will also investigate, and if viable implement, a land improvement and commercial forestation program covering the area of its mining leases to offset carbon emissions from its project and provide valuable soft and hard wood construction timber that might otherwise be harvested and imported from ecologically vulnerable areas of natural forest in other parts of the world. Stage 2 Following the successful commissioning of Stage 1 of the project, a Stage 2 expansion will involve the construction of:
2

Pyrolysis of coal is the heating of the coal in the absence of oxygen, in this case at relatively low temperatures (less than 600ºC). This process is also described as “retorting” because it is usually carried out in heating vessels of various types, commonly known as retorts.

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a larger char gasification plant capable of gasifying 4 Mtpy of char to provide sufficient syngas to feed a 2 Mtpy DME Plant; and a 400 MW IGCC power plant utilising tail gas from the DME Plant. Stage 3 Stage 3 of the project will involve: doubling the capacity of the open cut coal mine to 24 Mtpy; construction of a second 12 Mtpy coal preparation plant; doubling the production capacity of the petrochemical plant to 14.4 million bbl/yr of synthetic crude oil, 4 Mtpy of DME and 800 MW of exported power; and if commercially viable carbon capture and storage (CCS) facilities have been developed, stripping the CO2 from the syngas produced by the plant and disposing of it in those facilities. (If CCS facilities are developed at an earlier stage, CO2 stripping and disposal can commence at that earlier stage.)

1.4

Purpose and Scope of Initial Advice Statement

The purpose of this Initial Advice Statement (IAS) is to provide sufficient information about the nature and scope of the Project so as to: • Assist the Queensland Coordinator-General in making a decision on whether to declare the Project to be a significant project for which an Environmental Impact Statement (EIS) is required; Provide information to and facilitate consultation with governments, key stakeholders, landowners and the community; Allow the determination of the appropriate Environmental Impact Assessment Process and Development Approval requirements; and Assist in the preparation of the draft Terms of Reference for the Project’s EIS.

• • •

This IAS addresses the technologies to be used, the potential of the coal resource, and the mining and processing practices that will be employed to economically enhance the values of the resource in an environmentally acceptable manner. Issues that may be considered in determining that the Project warrants being declared a significant project are: Complexity of local, State and Federal Government Requirements The Project will be examined under a variety of local, State and Federal laws and the permitting process will be complex. The conversion of coal to gas and hydrocarbons may generate considerable interest from the Federal as well as the State Government due to its strategic importance and potential environmental impacts.

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In addition there will need to be a cooperative decision making process between local and State and Federal Government Departments. Potential Environmental Effects The potential adverse impacts of the Project are: • • • • • • • • • Possible disruption of groundwater aquifers in Hodgson Creek alluvials, the Walloon sandstone and the Tertiary basalts; Dust generated from mining processes; Odour generated from the processing of the coal; Greenhouse gas emissions; Social disruption to adjacent farming enterprises; Noise generated from mining and processing; Increased level of road traffic; Visual impact on a rural landscape; and Downgrading of agricultural land.

Environmental and Planning Approvals The Project will need to comply with local, State and Federal legislation. The likely approvals needed for the Project include those required under the following legislation: • • Federal: Environment Protection and Biodiversity Conservation Act 1999 State: State Development and Public Works Organisation Act 1971 Mineral Resources Act 1989 Environmental Protection Act 1994 Petroleum and Gas (Production and Safety) Act 2004 Coal Mining Safety and Health Act 1999 Integrated Planning Act 1997 Water Act 2000 (for construction of a “Referable Dam”) Transport Infrastructure Act 1994 Vegetation Management Act 1999 Dangerous Goods Safety Management Act 2001 Potential Effect on Relevant Infrastructure The Project will impact on local and State Government infrastructure such as roads, water supply and hydrocarbon transport via pipeline. The potential impacts can be significant and Ambre Energy is of the opinion that it is important to have the Queensland Coordinator-General’s department as the lead government agency to coordinate the permitting of the Project. The EIS for the Project will address these and other possible impacts. Already community consultation has commenced which has given Ambre Energy an indication of the issues that are of concern to the local community.

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2
2.1

Description of the Project
Project Location

The Project is located at Felton which lies in the Clarence-Moreton Basin in south-east Queensland to the west of the Great Dividing Range. The basin extends from northern New South Wales trending northwest to Dalby in Queensland and from Toowoomba in the east to Millmerran in the west. The Felton North deposit is approximately 30 km south west of Toowoomba and 10 km south east of Pittsworth, see Figure 2.1.

Figure 2.1 - Felton Hybrid Energy Project location plan
2.2

Background to the Project

The main focus of the Project is the large scale production of a combination of liquids and power from the proponent’s coal deposits at Felton North. The development of these coal deposits commenced in October 2006 when a wholly owned subsidiary of Ambre Energy, Eastern Mining Corporation Pty Ltd (EMC), applied for and was granted an exploration permit for coal (EPC 1076) over an area of 250 km² in the Felton region. At the same time, EMC entered into a farm-in agreement with an adjoining EPC holder, Metallica Minerals Limited, to earn a 75% interest in 180 km² of their exploration permits (EPC 935 and EPC 936). EMC has since acquired 100% ownership of these permits, and has further acquired EPC 1137 and EPC 1138. During 2007, EMC conducted extensive core drilling programs on the site and identified a potential deposit of high ash coal (on average 50% ash content) in excess of 900 million tonnes of high volatile bituminous coal, an ideal source material for coal to liquids projects.

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Technologies The technologies to be used to exploit these deposits include a number of innovative processes such as Ambre Energy’s proprietary Hybrid Energy System (HES) and a new production process for dimethyl ether (DME), as well as recognised processes such as those for power generation. At the heart of the HES is a continuous flow retort capable of pyrolysing coal in large quantities to produce hydrocarbon liquids aimed at the chemical and transport fuel market. The retorting technology for low temperature pyrolysis of coal was acquired by Ambre Energy via a joint venture with U.S. based Oil-Tech, Inc. This technology allows relatively low cost removal of liquids from the coal feed and also produces a solid char. The char is still of sufficient quality to produce power and further transport fuels via gasification. Ambre Energy has demonstrated the retorting of coal using a pilot test facility in Utah, USA and has carried out metallurgical test work and processing test work on the coal from the Felton North deposit. This test work, combined with exploration work and process option studies, has allowed Ambre Energy to develop a mine plan and processing facility concept that will maximise the economic returns from the Felton North resource. The development includes a plant to manufacture DME. DME has attracted much attention around the world because of the versatility and environmental benefits of this next-generation liquid fuel. There are a number of large scale DME production plants currently under construction and planned in the Middle East and China. Of particular interest is DME’s suitability as a fuel for compression ignition diesel engines, currently the most efficient engine technology available. Unlike diesel, gasoline or even ethanol, DME produces almost no particulates upon combustion; in other words, no smoke or soot. It contains no sulfur and produces very low NOx emissions. Prototype buses and heavy vehicles using DME have been built in China and Japan, and by Volvo in Europe. Ambre Energy has claimed a stake in the development of this new clean fuel by funding a project at the University of Utah to develop a reactor and catalysts for the production of DME from coal (as well as biomass). The aim is to produce DME more simply and at a lower cost than will be produced at the plants currently being built in the Middle East and China. In addition to research into DME production, Ambre Energy has done test work on evaluating the liquids from the low temperature retort to produce a synthetic crude oil and a pitch product. The level of processing of the liquids will be tailored to maximise the economic return of the Project and will include a synthetic crude oil fraction and may contain a pitch fraction and extraction of chemical values from the liquids. Exploration Two drilling programs have successfully been completed over the Felton North deposit area. The first drilling program was conducted in January 2007 with the second program following in July 2007. The January drilling program consisted of 4 cored boreholes at Millmerran (40km south-west of Felton North) and 7 cored boreholes within the Felton North deposit area, totalling 795 metres of HQ core. Figure 2.2 illustrates the typical drilling technology used during exploration at Felton North. The second drilling program was focussed solely on further defining the Felton North deposit area, and involved the completion of 6 chip boreholes and 9 cored boreholes, to produce 360m of core.

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Analysis of the two drilling programs indicates a low strip ratio resource with moderate ash, good volatiles and high hydrogen content. Modified Fischer Assay of the coal indicates high potential liquid yields from the Felton North coal deposit compared to other coals in Australia. The geology of the deposit appears to be structurally simple with coal seams dipping gently to the west. Since the beginning of November 2007, Ambre Energy has undertaken a third major drilling program to obtain detailed coal washabilty data, coal oxidation line data and other information required for detailed mine design.

Figure 2.2 - Exploration Drilling at Felton North looking west to Millmerran Project Justification and Alternatives

2.3

There are a number of important strategic implications of the Project, such as: • • Development of a significant alternative source of crude oil and gas, with the potential to reduce importation of oil and thereby improve Australia’s balance of trade; Development of a relatively low cost coal-to-liquids and coal-to-gas process that can enhance the economic value of Queensland’s coal deposits, particularly resources which are currently sub-economic or treated as waste, such as coal washing rejects; Maximising economic value from the Felton North coal deposit for the State of Queensland; Development of Australia’s first DME production facility and the opportunity for Australia to play a leading role in the adoption of DME as a next-generation fuel;

• •

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Encouraging the establishment in the Darling Downs region of downstream petrochemical industries such as the manufacture of olefins and other products that require crude oil as a feedstock; Diversification of the employment opportunities and skill base of people living in regional Queensland; and The potential to exploit the same technology and development concept in other areas within Australia.

• •

Ambre Energy is continuing to assess alternative projects in the USA in the event that the Felton Hybrid Energy Project is not able to proceed. In particular there are opportunities to use the HES to upgrade low quality Gulf Coast lignites as fuel for power stations.
2.4

Project Components

The Project will cover an area of approximately 25 km² of land and will be comprised of a number of components, as follows: • • • • • • • • • Felton North Coal Mine with a production capacity of 24 Mtpy; Water pipeline to transport 10 ML/day of waste water up to 80 km from coal seam methane production operations (located west of the Project site) to the Project site; Coal preparation plants capable of washing 24 Mtpy of raw coal to produce 12 Mtpy of washed coal; Clusters of retorts, each capable of retorting 1,000 tonnes per day of washed coal, with a total retorting capacity of 12 Mtpy; Power generating combustion engines utilising retort gas as fuel to produce electricity for internal needs (60 MW); Synthetic crude oil upgrading units capable of upgrading 40,000 barrels per day of synthetic crude oil; Char (spent coal) gasification units capable of gasifying 8 Mtpy of char; DME production plant capable of producing 4 Mtpy of DME; IGCC power plants capable of producing a total of 800 MW of electricity.

2.5

Felton North Coal Mine

The Resource A measured, indicated and inferred resource of 900 million tonnes of coal has been identified at the Felton North deposit. It falls within EPC 935 and comprises Walloon Coal Measures, Marburg Formation sandstones and ridge capping Tertiary basalt flows. The Walloon Coal Measures consist of grey siltstones, commonly carbonaceous, and fine to medium grained soft grey lithic sandstones.

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Several carbonaceous zones are scattered within these sediments ranging in thickness from tens of metres to less than a metre. The carbonaceous zones are made up of mudstones (varying in carbonaceous content), carbonaceous shales, both clean and carbonaceous claystones and various coal grades. The sediments within these carbonaceous zones merge and coalesce laterally over relatively short distances. The underlying Marburg Formation consists principally of cross-bedded medium to coarse quartz sandstones inter-bedded with grey shale and claystones. The Tertiary basalts were deposited as a series of flows and exist as capping along remnant ridge lines. Figure 2.3 shows the drill hole locations of the 2007 exploration programs.

Figure 2.3 - Borehole location Plan There are 9 seams within the Felton North deposit area, the G, H, T, K, MU, MM, ML, B and BB seams; see Figure 2.4.
G seam Varying overburden 1.9m 8.5m H seam 0.7m 4.0m T seam 5.0m

14.5m K seam 0.7m 4.0m MU seam MM seam ML seam 4.7m 2.9m 4.3m 5.5m B seam 2.0m

Figure 2.4 - Stratigraphy of the Felton North Deposit.
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All 9 seams vary in thickness and quality throughout the deposit. Figure 2.5 illustrates a typical intersection of M seam.

Figure 2.5 - Typical coal intersection at Felton North. Core recovered using HQ Diamond wire line technology.

Mine layout and Infrastructure The Felton North Coal Mine will be a 24 million tonnes per year (Mtpy) open cut mining operation to be developed in two phases. During Stage 1 of the Project, a mine with a production capacity of 12 Mtpy of run of mine coal will be constructed. Stage 3 of the Project will double the capacity of the mine to 24 Mtpy. The mine layout and infrastructure are shown on Figure 2.6. With further design and mine planning the layout may change but the plan basically depicts a realistic impression of the various operational centres required to extract and process the resource. The mining operation will be based on the western side of Hodgson Creek where the coal will be extracted for crushing, washing and transport to the processing plant on the eastern side of Hodgson Creek. The waste product from the washing, predominantly bentonite clays, will be piped to clay treatment ponds on the western side of Hodgson Creek for settlement and the recovery of water. Recycling of water will be a high priority for the Project. Runoff from the stockpile area and processing plant site will be collected in sediment sumps for recycling to the clay treatment sumps. The initial clay treatment pond will be constructed on the western side of Hodgson Creek behind a flood levee, which will protect the mining operation from floods and ensure that runoff from the mining operations does not enter Hodgson Creek. A similar levee will be constructed on the eastern side of Hodgson Creek to protect the processing plant infrastructure and also to ensure runoff from

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the plant site does not enter Hodgson Creek. For planning purposes and until confirmation is obtained from hydrological studies of Hodgson Creek, the levees will be set back at least 100m from Hodgson Creek. The flood levee on the western side will form the base for the initial overburden dump and the outer slope will be stabilised with rock mulch and vegetation to provide an erosion resistant cover. This slope will remain as a permanent feature of the post mining landform while the eastern levee will be removed during decommissioning of the plant site. Both levees will channel runoff to sediment sumps for recycling water into the production dams, and smaller sediment sumps will be located at the base of the outer slopes of the levees to collect runoff during construction of the levees. The mining operation will commence to the west of the initial clay treatment ponds and progress to the west.

Figure 2.6 - Open Cut Mine and Infrastructure layout plan Coal Handling Coal will be removed by shovel and truck with some selective removal of clay bands greater than 300mm in thickness. The coal and small clay bands will be taken to a central coal preparation plant for crushing and washing prior to transfer to the processing plant. The larger clay bands will be transported to the overburden dump located within the open cut mine perimeter. Tailings The clay bands liberated from the coal during the washing process will be pumped to the clay treatment ponds for settling to separate the clays from the water. This will involve stilling the water in shallow ponds and passing the water through a series of ponds to facilitate the settling process. Clay Settlement Ponds When the clay ponds are nearing capacity, further ponds will be developed in the advancing mine pits. This will involve constructing bunds in the pits to regulate storage and removal of water from the tailings. The westward advancing overburden dump will progressively cover the ponds that have
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been filled with tailings. The consolidation of the tailings at the toe of the dump will force water from the ponds into the next series of clay ponds.
2.6

Coal Preparation

The run of mine coal is about 50% ash and needs to be washed to less than 30% ash. This is to be done via 2 coal preparation plants. The first preparation plant will be constructed as part of Stage 1 and will have a capacity to wash 12 Mtpy of run of mine coal to produce 6 Mtpy of washed coal. Stage 3 will include construction of a second plant of equal capacity. Waste from the plants will comprise rejects solids and waste water tailings (predominately water containing fine solids). The tailings will pumped to the clay treatment ponds, where the solids will settle and the water will be recycled to the coal preparation plants. The reject solids will be stored in a waste pile and trucked to the mine waste area. The plants will be similar to many other coal preparation plants in Queensland, using predominantly dense media separation. The coal preparation plant scheme is shown below in Figure 2.7.

Figure 2.7 – Coal Preparation Plant Scheme
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2.7

Processing of Coal using the Hybrid Energy System

The petrochemical plant to process the washed coal will be sited approximately 0.5km to the east of the main mining area. The plant will be placed in a location that has previously been drilled and determined to contain no coal. The plant will be built in 3 stages. The proposed processing configuration maximises the use of the resource, producing power and a range of liquids that can replace imported crude oil and refined products. The coal processing scheme is shown below in Figure 2.8 and is described on the following pages.

Figure 2.8 – Coal Processing Scheme
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Drying and Retorting The washed coal will be dried using a fluidised bed dryer. This unit will use the gas produced by the downstream retorting and gasification processes as the energy source for the dryer. The dried coal will then be fed into a cluster of retorts, each capable of processing 1,000 tonnes of coal per day. The retorts will be Ambre Energy’s patented design comprising a totally enclosed system operating under negative pressure. The retorts are indirectly heated using electric heating elements in a flowing bed of coal, and produces a vapour stream and a solid product. Liquids processing The vapour from the retort is condensed to produce liquids. The liquids will be further processed to remove solids and water to produce a synthetic crude oil suitable for the crude oil market. Further chemical values can be extracted from the liquids if economic conditions support this. The synthetic crude oil will be sent via pipeline to Brisbane. Stage 1A will include a cluster of retorts with a total processing capacity of 3 Mtpy of coal to produce 3.6 million barrels per year of synthetic crude oil. A second cluster of retorts will be built as part of Stage 1B to increase production to 7.2 million barrels per year. Stage 3 will further increase production to 14.4 million barrels per year. Gas conditioning and co-generation of power The gas from the retort will be treated to remove hydrogen sulphide prior to being used as a fuel to generate electricity for internal use via a gas engine based power station. The retort gas will also be used as the heat source for drying the incoming coal and to raise steam for process requirements. The hydrogen sulphide will be absorbed into caustic soda to make sodium hydrogen sulphide, a product used by base metal mines in Queensland and New South Wales as a flotation reagent. Consideration will also be given to the future stripping of carbon dioxide from the gas at this point to take advantage of any viable CCS facilities that emerge. Gasification including DME production and IGCC power generation The solids from the retort are of sufficient quality to be gasified in a fluid bed or entrained flow gasifier system to produce a stream of syngas for DME production and co-generation of power in an IGCC power station. It is envisaged that Stage 1B of the Project will include a gasifier and a oncethrough 300 tonnes per day DME pilot plant. A number of plants have been built using coal to produce DME in other parts of the world. Ambre Energy is developing an optimised DME reactor through co-operative research with the University of Utah, which, if successful, will enhance the existing process technology currently available for DME production. The tail gas from DME pilot plant will be combined with the retort gas to provide energy for power and steam requirements within the process plant. Any excess energy will be exported as electricity to the National Grid. After successful commissioning of the DME pilot plant, it is envisaged that during Stage 2 a large scale gasifier will be constructed to provide syngas for a 2 Mtpy DME plant and a 400 MW IGCC power station. Approximately 75 MW will be used internally and the balance will be exported. IGCC technology is well proven in similar power stations worldwide. Stage 3 will increase production to 4 Mtpy of DME and 800 MW of electricity. Oxygen Plant An air separation unit will be installed to provide the oxygen required for the gasification process. This unit will utilise proven technology from a recognised vendor of oxygen plants.

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Waste and Emissions Treatment The tailings from the coal preparation plant will be pumped to the clay treatment ponds. The waste water from the other processing sections will be treated to a standard to allow addition of this water to the tailings. Water from the clay treatment ponds will be recycled to the coal preparation plants. Air emissions will only be generated at 3 points in the process: • • • Exhaust from the combustion of gas to dry the washed coal before it is fed into the retorts. The coal is dried at low temperature – about 250ºC. Exhaust from the combustion of syngas in the gas engines generating power for internal use. Exhaust from the IGCC power plants.

2.8

Resources required

Water supply Project needs for mining and processing are approximately 5,000 ML/yr. It is proposed to build a water storage dam with a capacity of 10,000 ML. The water quality required for mining can be waste water from coal seam methane production, runoff from waste overburden dumps and plant area or recycled town waste water; whereas the processing plant will require water of reasonable quality for steam generation, which can be provided by an onsite water treatment plant. Ambre Energy is currently negotiating an agreement with a large coal seam methane producer to secure supply of 10ML per day (approximately 3,500 ML per year) of waste water from their coal bed methane projects located less than 80 km from Felton project. Other potential sources include: • • • • • waste water produced by other coal seam methane producers; run off water from waste overburden dumps and the processing plant; recycled waste water from towns in the region; water entitlements purchased from landholders; and other government-controlled sources.

Work force Stage 1 of Project development will require the following workforce: • • • construction - 900 persons for 15 months; mining and coal handling - 120 persons ongoing; processing plant - 60 persons ongoing; and
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management and technical services - 20 persons ongoing.

Accommodation for construction workers will be provided via a temporary camp. Ongoing workers have a number of attractive permanent accommodation options in surrounding towns. Where possible, personnel already living in the region will be invited to apply to fulfil positions available at the Project. Transport Transport requirements are: • • • a corridor for conveyor transport of coal across Hodgson Creek and return of solid waste to the overburden dumps in the mining area; road access to transport infrastructure components to site – the existing road corridor is suitable; as the Pittsworth to Felton road traverses the mining area, at some time in the future life of the Project, this road would require relocation to a mined and rehabilitated section of the Project area; road access to bring workers to site on a continuous roster, requiring transport at night; high voltage power transformers, power switch yards and high voltage power lines connecting the site with the national grid and; pipelines for transporting water to site and synthetic crude oil and DME to markets (initially during commissioning stage, synthetic crude oil and DME might be transported by rail and road transport).

• • •

2.9

Timeframe for Project

Ambre Energy is aiming to obtain all necessary mining leases and approvals for the Project in time to allow commencement of construction of the Project during the first quarter of 2009. The object is to commission Stage 1A by the first quarter of 2010. The proposed commissioning timeframe for subsequent stage is as follows: Stage 1B Stage 2 Stage 3 Third quarter 2011 First quarter 2013 Third quarter 2014

This timeframe is subject to a number of contingencies, including the timing of governmental approvals, and access to sufficient capital at the relevant stages.

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3
3.1

Project Benefits and Costs
Project Benefits

The Felton Hybrid Energy Project will provide benefits to the local region as well as broader state and national benefits. The key benefits include: • • Development of a significant alternative source of crude oil and gas, with the potential to reduce importation of oil and thereby improve Australia’s balance of trade; Development of a relatively low cost coal-to-liquids and coal-to-gas process that can enhance the economic value of Queensland’s coal deposits, particularly currently subeconomic resources or waste coal such as coal washing rejects; Maximising economic value from the Felton North coal deposit for the State of Queensland; Development of Australia’s first DME production facility and the opportunity for Australia to play a leading role in the adoption of DME as a next-generation fuel; Encouraging the establishment in the Darling Downs region of downstream petrochemical industries such as the manufacture of olefins and other products that require crude oil as a feedstock; Diversification of the employment opportunities and skill base of people living in regional Queensland; and The potential to exploit the same technology and development concept in other areas within Australia.

• • •

• •

Employment Opportunities Stage 1 of the Project will require the following workforce: • • • • construction - 900 persons for 15 months; mining and coal handling - 120 persons ongoing; processing plant - 60 persons ongoing; and management and technical services - 20 persons ongoing.

3.2 Estimated Project Costs

Preliminary estimates of capital costs for Stage 1A of the Project are in the order of $783 million. Ambre Energy plans to own and operate the mine, coal preparation plants and most of the components of the petrochemical plant. Third parties will be invited to provide and operate the oxygen plant and power station.

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4
4.1

Existing Environment
Climate

The temperature and rainfall statistics for Pittsworth 15km north of Felton East, taken from the Bureau of Meteorology web site, are listed in the following table:

Statistic

J

F

M

A

M 20.5 8.4 40.7 3.8 69

J 17.3 6.1 41.2 4.2 74

J 16.5 5.0 40.7 4.2 70

A 18.6 5.9 30.1 3.7 65

S 22.1 8.7 36.6 4.1 61

O 25.6 11.9 63.8 5.7 57

N 28.4 14.4 75.5 6.1 54

D 29.8 16.1 96.3 6.8 59

An 24.2 11.5 694.6 59.9 65

Temperature 58 years of records 1909-1975 Mean max (0C) 29.9 29.1 27.8 24.7 Mean min (0C) 17.0 16.9 15.4 12.0 Rainfall 120 years of records 1886-2007 Mean (mm) 93.1 76.5 62.4 38.3 Days ≥ 1mm 6.4 5.8 5.5 3.6 Relative humidity 27 years 1938-1975 Mean 9am (%) 65 70 69 66

Table 4.1 – Temperature and Rainfall Statistics for Pittsworth
4.2

Topography

The Project area includes the alluvial plains of Hodgson Creek rising to the low slopes of Walloon sandstones and finally to the steep slopes of the remnant basalt ridges and plateaus. The Central Darling Downs Land Management Manual produced by the Department of Natural Resources and Water has identified the following Land Resources Areas (LRA) in the Project site: • • • Older Alluvial Plains: Broad level plains of basaltic alluvium with open grasslands; Basaltic Uplands: Undulating rises and rolling low hills rising to steep hills with coolibah open woodlands; and Poplar Box Walloons: Undulating rises and low hills on Walloon sandstone with poplar box open woodlands.

This manual is restricted to the western side of Hodgson Creek and a soil survey will be conducted to extend this assessment to the east of Hodgson Creek and to qualify and quantify the soil types of the total project area to assist in mine and rehabilitation planning.

4.3

Soils and Land Use Suitability

While the soils in the Project area may not have been specifically surveyed, the Land Management Manual lists the common and associated soils for the various LRAs mapped in the area. The common soils associated with the LRAs identified in the project area and their land use suitability are listed in the Table 4.2.

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Table 4.2 – Indicative Soils of the Project Area

Land Resource Area

Common Soils and Land Use Suitability

Older alluvial plains with Waco soil is deep to very deep (100-180cm) fine, self black, self mulching cracking mulching, dark cracking clay on basaltic alluvium. This soil clays. is ideally suited to continual grain cropping with good nutrition and rotation for weed and disease control. Basaltic uplands with black to dark brown clay or clay loams on decomposing basalt. Soil depth varies with position on the slopes. All the soils are susceptible to severe rill and gully erosion. Craigmore and Irving soils occur on mid and lower slopes of basalt hills and rises. Typically the soils are deep to very deep (100-180cm) self mulching brown to brownish black cracking clays with red brown subsoil on either basalt or basalt colluvium. These soils are ideally suited to continual grain cropping with good nutrition and rotation for weed and disease control. Charlton soil occurs on the mid to upper slope on basalt rises and low hills. The soil is moderately deep (50-100cm), coarse self mulching, black cracking clay on basalt. The soil is suited to continual grain cropping with good nutrition and rotation for weed and disease control. Beauaraba soil occurs on upper slopes on low basalt hills and crests of ridges. The soil is very shallow (10-30cm), very dark, cracking clay overlying basalt. The soils is best suited to grazing of pastures with limited suitability for forage and field crops. Kenmuir soil occurs on steep hillsides and scarps on basalt. The soil is very shallow (5-25cm) gravelly or stony, brown loam or clay loam on basalt. The soil is best suited to native timber production and nature conservation. Poplar Box Walloons with black self mulching cracking clays on Walloon sandstone. The soils are susceptible to severe sheet, rill and gully erosion. Elphinstone soil occurs on slopes (2-6%) of gently undulating to undulating plains and rises. The soil is a deep (100-150cm), fine self mulching, black cracking clay on fine grained sandstone. The soil is suitable for continual grain and forage cropping.

4.4

Remnant vegetation

The majority of the land suited to cultivation has been cleared of vegetation. Remnant vegetation exists on the upper slope and crest of the basalt hills and plateaus and areas of Walloon sandstone soils. The latest Regional Ecosystem map for the area (see Figure 4.3) lists a small area of dominant endangered ecosystem of 11.3.21 (Queensland bluegrass – see area shaded pink within the Mining

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Lease Application area) and there has been a recording north west of the proposed mining area of a rare plant, Digitaria porrecta, finger panic grass. With the prevailing drought conditions it is difficult to ascertain if these grasses still persist and vegetation surveys will be conducted to determine if these grasses are present.

4.5

Surface water

Hodgson Creek starts approximately 15 km south of Toowoomba and travels 30km before flowing southwest through the Project area where it is flanked by deep alluvial plains. Hodgson Creek then flows southwest for a further 15km to join the North Branch of the Condamine River. The catchment at Balgownie (approx 2km downstream from Felton) is approximately 560 km2 with an annual discharge range of 333-154523Ml over an 18 year period. The hydrology of Hodgson Creek has not been studied and no assessment has been made on the buffer zones that must be maintained either side of Hodgson Creek to ensure that properties upstream of the Project are not impacted adversely during flood events.

4.6

Ground water

The ground water sources in the Project area are the alluvial plains of Hodgson Creek, the Walloon sandstones, the Hutton (Marburg) sandstones and the basalts. All the groundwater resources in the area have been allocated for use by landholders. The exploration activities have located groundwater in the overburden above the coal measures which is not associated with the alluvial of Hodgson Creek. The quality of this water is suitable for stock but not for irrigation.

4.7

Air Quality

The region surrounding the Project site is rural with intensive cropping, cattle grazing, lot feeding of cattle and intensive poultry farming. Emissions from these activities will be dust from cultivation and harvesting activities and odour from cattle lot feeding and poultry farming. The closest EPA monitoring site is Toowoomba North which may not be applicable to this area, as the land-use on the outskirts of Toowoomba may differ from the Felton area. Monitoring sites will be established at appropriate locations around the Project area.

4.8

Noise and Vibration

The agricultural practices in the Project area generate noise typical of a rural community and are generally accepted by the community. There are currently no industries in the area that generate the noise and vibration associated with mining activities.

4.9

Existing ecosystems

Flora Figure 4.3 is a map showing existing ecosystems in the area of the proposed mining leases (the total area of which is outlined on the map). As indicated in section 4.4, remnant vegetation exists on basalt ridges. The remnant vegetation areas shaded green are not of concern, but the remnant vegetation area shaded pink is classified as endangered. The remainder of the landscape has been intensively farmed.

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Fauna Typical of much of the Darling Downs, native fauna habitats have been greatly impacted by agricultural development in the Felton East area. Many natural habitats occur as remnants within this agricultural landscape, and some species of native fauna are able to exploit agricultural land to varying degrees. Some species are however, locally restricted to, or highly dependent on the remnants of the natural landscape. Queensland Parks and Wildlife Service (EPA) records indicate the presence of the following threatened (rare, vulnerable or endangered) species within 25 km of Felton East, listed under the Nature Conservation Act 1992 (Queensland) and/or Environment Protection and Biodiversity Conservation Act 1999 (Australia): Grey Goshawk Major Mitchell's Cockatoo Glossy Black Cockatoo Painted Honeyeater Swift Parrot Lewin's Rail Powerful Owl Black-breasted Button-quail Bulloak Jewel (butterfly) Spotted-tailed Quoll Brush-tailed Rock-wallaby Koala (southeast Queensland) Long-legged Worm-skink. These species above are generally associated with native vegetation, and so the remnant natural habitats around Felton East are of possible significance to them. In contrast, however, a population of the Grassland Earless Dragon (Tympanocryptis pinguicolla) was discovered in recent years on the Darling Downs to the east of Pittsworth. This species had been considered extinct in Queensland until its rediscovery, and is now listed as Endangered (Nature Conservation Act 1992). All specimens are known from highly modified agricultural land, typically “small holdings devoted to strip-farming of mixed crops, such as cotton, sorghum, maize and sunflower interspersed with fallow land. Large areas of native and introduced grasses existing as headlands, and along drainage lines are a feature of the farmlands where the dragon exists” (EPA, 2008: www.epa.qld.gov.au). It is possible this species might also occur in the Felton East area.

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Figure 4.3 – 2003 Regional Ecosystem Map with Proposed Mining Lease Application Area

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5
5.1

Measures to Control Potential Environmental Impacts
Air

Impacts on air quality will be generated by the following activities: • • • • • • Dust from the mining operations and coal handling processes; Flue gas from the coal drying operation; Flue gas from the gas engines generating power for internal use; Flue gas from the IGCC power plant; Fugitive emissions including odours; and Greenhouse gas release from the coal reserves during mining and processing.

Mitigation Dust generation will be managed by water sprays supplemented by commercially available dust suppressant agents and by forest plantations established as soon as practically possible within buffer zone around processing plant and mine. Flue gas from the drying process may contain particulate coal. This stream will be treated using a baghouse to ensure emissions are within allowable limits. Flue gas from the dryer, the gas engines and the power plant will contain standard combustion products, including NOx. Air emission modelling work, burner design and any post combustion capture systems required, will be detailed during the design of the Project to ensure air emissions are within acceptable limits. Odour has been identified by the project team as a source of community concern. The processes of coal drying at relatively low temperatures and combustion of the gas from gasification to make power are not expected to generate odours. Given the community concern however, Ambre Energy will carry out test work to determine if odours will be present in any of the continuously operating streams. With the exception of the dryer, gas engines and power plant flue gases, all other gas and liquid streams containing the product hydrocarbons are fully enclosed. However, fugitive emissions are often the source of odour complaints from coal and hydrocarbon processing and these will be controlled by the development of Standard Operating Procedures to ensure, among other things, that the air is evacuated and treated before maintenance is conducted.

5.2

CO2 Emissions

Based on test work completed to date and current design parameters, the Project will generate the following CO2 emissions for each of the 3 main products: • • • Synthetic Crude Oil – 120kg of CO2 emission per bbl or 800kg CO2 emission per tonne of crude oil produced; DME – 1,000 kg of CO2 emissions per tonne of DME; Power from IGCC power plant – 500kg of CO2 emissions per MWhr of generated power.

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Mitigation The above figures can be significantly reduced by removing CO2 from retort gas and from tail gas before combusting it in the power plant. The process plant configuration can be tailored for production of high purity CO2 gas, which can be used by food manufacturers and by the oil industry for Enhanced Oil Recovery. In addition to potential CO2 recovery and storage, Ambre Energy is planning to implement the following action to offset CO2 emissions: • • • Planting of soft and hard wood plantations within the buffer zone around processing plant and mine, and on the waste dumps reclaimed after open cut coal mining; Planting of carbon sink forest plantations in Australia and in other countries; Application of Ambre Energy’s technology and process configurations, including concentration and capture of CO2, to other coal producing regions such as Indonesia, China and India. Ground Water

5.3

Initially mining will intersect ground water resources in the Walloon coal measure and may intersect groundwater in the alluvials of Hodgson Creek. Eventually aquifers in the basalts may be intersected. Mitigation Groundwater studies will be conducted prior to mining operations commencing to quantify aquifers and to ascertain the impacts of mining on these aquifers. The water from these resources is fully allocated to the farming community, and discussions will be held with the Department of Natural Resources and Water as to the process required to access these resources. Water extracted by the mining process will be used for such purposes as coal washing and dust suppression.

5.4

Surface water

The disturbance from the mining operations will generate large amounts of sediment which has the potential to flow into Hodgson Creek. Mitigation As surface water will be a valuable commodity, the emphasis will be on the harvesting of runoff for re-use rather than simply to still the runoff for sufficient time to allow the sediment to settle. The first structures to be constructed will be the levees on both sides of Hodgson Creek to retain all runoff from the construction and mine development sites. The levees will be located to leave a buffer zone of at least 200m between the levees to accommodate flood flows in Hodgson Creek. The sizing of the buffer zones is to be validated by a hydrological study of the flow characteristics of Hodgson Creek. On the western side this levee will form the initial outer slope of the overburden dump which will progress to the west as the mine advances. The runoff from the levee construction will be directed into sediment sumps. All runoff upslope from either levee will be directed into large sumps, constructed to allow access for portable recycling pumps.

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Individual work areas with high sediment yield potential such as the coal preparation plants and coal stockpiles will be equipped with sediment sumps to remove coarse sediment before flowing to the larger levee sumps. Graded banks and waterways will be constructed to direct runoff from unmined areas around the mining and processing operations. This water will be retained in separate dams and sumps for recycling.

5.5

Water Conservation

Water is required for the mining and coal washing processes as well as the processing of the coal to produce gas and hydrocarbons. Water is a scarce resource on the Darling Downs and the Project will impact on the water resources. Mitigation Ambre Energy will design the mining and processing to maximise the re-cycling of water as well as water harvesting from the site. A further conservation measure will be to minimise evaporation losses by designing the water supply dams to have the least surface area per storage volume. A water storage dam with a capacity of 10,000 ML and a depth of about 12 metres will be built. Water from smaller sediments dams will be pumped to this dam, or the smaller dams will be equipped with water fill points to supply water to water trucks for dust suppression. Dust suppressants will also be used to improve the efficiency of the dust suppression water. The use of evaporation blankets on the main storage dams will also be investigated.

5.6

Water Quality

Mining activities will generate large quantities of sediment as will the diverting runoff water around the operational areas. This sediment has the potential to impact on the quality of water and aquatic habitat in Hodgson Creek and other small steams flowing from the Project area. Mitigation Runoff from the mining activities will be managed through a series of sediment dams and the stringent requirement to maximise the recycling of water, a resource in short supply. Re-direction of runoff around the mining activities from Project controlled land also has the potential to generate large sediment loads from erosion of waterways and cultivated paddocks. Waterways and diversion banks will be designed and constructed using conservative design criteria to minimise water velocities, and waterways will be stabilised with grass cover or the placement of rock mulch to minimise erosion. Management of land controlled by the Project and not required for mining activities will be designed to minimise runoff and thus erosion. The land acquired by the company will be amalgamated into manageable production units. Farming practices will maximise crop stubble retention or pasture cover and minimum tillage will be practised. Alternatively, forest plantation options will be evaluated.

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5.7

Hydrology

The incursion of the Project onto the flood plains of Hodgson Creek will cause changes to the flow characteristics during high flow conditions. This may cause raised water levels upstream from the levees, affecting upstream farming practices on the alluvials and infrastructure such as pump installation. Mitigation A hydrological study will be commissioned to identify the changes in flood levels for various flood events. This study will identify farming areas that may be affected and will provide a basis for discussions with upstream landholders. The study will validate the arbitrary 200m Hodgson Creek corridor or recommend changes to reduce upstream effects.

5.8

Land Management

Overburden Characterisation As yet the overburden has not been characterised but initial observation of the Walloon sandstone and the basalts indicates that these materials weather to form good agricultural soils. The mining techniques will use truck placement of the overburden so that selective handling of overburden will be used to bury any material that may generate acid or undesirable levels of heavy metals that may be mobilised by leachate from the dumps. The overburden strata will be analysed to identify strata that requires selective handling and placement in the dumps. Select overburden will be used to rock mulch the outer slopes of the levee. This material will be either basalt or Walloon sandstone or a combination. Initial wetting and drying tests on the Walloon sandstone indicate that this sandstone is resistant to breakdown by wetting and drying, an indication of high silica cementing compounds. The sandstone is not as resistant to breaking as is the basalt but will form an ideal rock to blend with basalt as it will provide both erosion resistance whilst weathering into a soil. The soil component is essential to ensure that runoff remains on the surface of the rock mulch rather than eroding the subsurface below the rock. Topsoil Management Before development commences on the site, a soil survey will be conducted to identify the suitability classification of the various soil types as to their potential to produce the range of crops that have been grown in the past. One of the criteria used to determine the suitability class of a soil profile is the potential to store plant available water (easily extracted by plant roots) in the profile. The aim of the rehabilitation program is to return a landform on the mining areas with a similar proportion of suitability classes as existed pre mining. Thus returning the soil profile is an important first step. During the mining operations more intense soil surveys will be conducted to plan topsoil stripping and storage operations. Topsoil and the subsoils to a depth indicated by the suitability classification will be stripped separately and replaced in the reverse order on the reshaped overburden dumps. Where possible the soil profiles will be directly replaced on reshaped spoil. On the processing plant site generally only the topsoil layer will be removed for storage and eventual return as the pavement for the product storage area will be placed directly on the subsoil. Where geotechnical stability is an issue the subsoils may be removed for eventual return before the topsoil is respread during the rehabilitation of the plant infrastructure site.

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Topsoil will be removed by scrapers and stockpiled separately from the subsoil, which will be removed either by scrapers or by shovel and truck. When the overburden dump is sufficiently progressed to the west the subsoil and topsoil will be directly respread. Where topsoil and subsoil has to be stored the sides of the topsoil dumps will be shaped to a 4:1 gradient and the dump surface cultivated and planted with cereal/grass/legume mix to minimise erosion and to retain biological activity in the soil. Overburden Removal and Landform Construction Overburden will be removed by a conventional shovel and truck operation with the initial overburden being transported to an external dump that will form the levee approximately 100m west of Hodgson Creek. The height of the levee/dump will be determined by a life of mine overburden balance which will determine the surplus of overburden that has to be placed in external dumps. Initial indications are for a levee at RL 446m advancing to the west forming a plateau with the surface draining to the west at approximately 0.5%. As the dump progresses over the initial clay treatment pond, new ponds will be progressively developed in the mined-out pits. At RL445 the dump will rise at a maximum 10% gradient to meet the smaller of two remnant basalt hills at RL495. The top of this hill will not be mined. At approximately 15m vertical intervals a 20m horizontal berm will be constructed between each 10% slope. The resultant landform will have a maximum slopes length of 150-200m to minimise the erosion potential during the initial re-vegetation phase to stabilise the slopes. The runoff from the dump will be discharged to natural ground via unmined stable natural waterways or a constructed waterway lined with rock mulch. During the mining operation all runoff will be directed into sediment sumps, including the clay treatment ponds. Revegetation As the soil profile is respread, care will be taken to reduce compaction from the spreading equipment by ripping, and to blend the subsoil with the reshaped spoil surface. Topsoil will then be respread and further ripping will remove compaction and blend the topsoil with the subsoil during the seeding process. The initial surface treatment will be to control initial erosion by ripping and planting high rates of cereal cover crops as well as grasses and deep rooted legumes. Fertilizer will also be applied. Depending on the season it may be necessary to hay mulch the surface, immediately after seeding, to both minimise erosion as well as provide shade to reduce water loss from the surface, which will extend the germination period. The aim is to produce a vegetative cover of at least 70% projected leaf cover, to effectively control erosion as well as to build up the organic carbon in the soil that would have been lost during storage. This vegetative cover will remain for several years after which time cropping trials will be implemented. These trials will ascertain the suitability of the various rehabilitated landforms to maintain acceptable erosion losses during fallow period with reduced standing stubble cover after the crops have been harvested. Trees will be introduced in some areas only after the slopes have been stabilised with a vegetative cover. This will involve using seedlings and may require initial irrigation depending on the rainfall patterns. Experimentation will also be done with direct seeding on areas where rip lines pond rainfall runoff generated from adjacent tracks and flat areas. These tracks that generate runoff are generally constructed on the berms. The acquisition of farming properties can lead to sub standard management of this land with attendant decline in productivity and weed management and an increase in erosion. This will be a concern for local landholders who have farmed in this local area, sometimes for generations.
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Secondly the development of the Project has the potential to produce rehabilitated landforms with much lower land suitability criteria than the present criteria. Mitigation Land management will involve: • • • • • the farming or commercial forestation of the land acquired by the Project until required by the mining operations; the rehabilitation of the mined land to appropriate land suitability classes; the farming or commercial forestation of the rehabilitated land; the decommissioning of the final mine voids, infrastructure and processing facilities and the return of pre mine land suitability to this land; and the disposal of the land after decommissioning of the Project.

These issues will be addressed and strategies developed well before construction to ensure that land acquired by the Project is managed with conservation farming or forestry practices, and the return of appropriate land suitability classes will be an integral part of the rehabilitation and decommissioning program. The rehabilitation program outlined in section 5.8, in particular the topsoil and subsoil management, will ensure that the rehabilitated landform provide a similar proportion of land suitability classes as now exist.

5.9

Transport

The transport requirements of the Project will involve the following: • • • daily commuting of workers, both construction and permanents with 24 hour operation for permanent workers; delivery of construction materials which may include large components requiring escorts; and the movement of large quantities of hydrocarbon liquids and possibly gas from the petrochemical plant for export or use in a coastal refinery.

Mitigation The project team will investigate all these issues to ensure that these traffic movements do not cause unnecessary damage to local or regional roads, and that other options are investigated including rail or pipeline transport of product. Risk assessment will be conducted on the various options, including the commuting of permanent workers. The final selection of the transport options will be driven by firstly, risk assessments and secondly, economics.

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5.10

Flora and Fauna

The remnant native vegetation, predominantly Eucalyptus coolabah and Eucalyptus orgadophila, will be removed except for the areas of hill tops that will not be mined because of the depth to coal being too great. A smaller area of Queensland blue grass will also be removed by mining. At this stage the habitat value of these communities for the native fauna of the area is not known. Mitigation The rehabilitation programme will develop landforms with the same or better suitability classes so that the re-introduction of these tree species will be incorporated into the programme. Further, where hill tops have already been cleared for pasture, a program to re-introduce native tree species will be investigated and implemented. Techniques will involve both direct seeding and the use of tube stock. A fauna survey will identify the importance of the vegetated areas as fauna habitats, and the reestablishment of these native tree areas will be linked by tree corridors to similar vegetation communities adjacent to the project area to facilitate the movement of fauna into the rehabilitated areas.

5.11

Native Title and Cultural Heritage

The land in the Project is freehold and as such Native Title has been extinguished. The bed of Hodgson Creek would appear to be open to claim as the freehold blocks do not abut in the centre of the creek, but a Native Title Search conducted on the 20 August 2007 has identified that there is no Native Title on this land. Hodgson Creek was included in the area claimed by the Western Wakka Wakka People on 27 January 1999. This claim has been finalised so that Hodgson Creek is not under claim. A cultural heritage survey has not been conducted on the Project area. Mitigation Hodgson Creek will be protected by a buffer zone of approximately 200m. A cultural heritage survey will be conducted over the Project area leading to the development of a Cultural Heritage Management Plan, depending on the results of the survey. Visual Amenity

5.12

Due to the topography, the Project site is highly visible from the adjacent public roads and presents a vista of cultivated paddocks extending up to vegetated hill tops. Due to the small rural population there is a limited amount of domestic lighting resulting in a clear night sky. This landscape will be progressively removed while the activities associated with mining and the work areas will be illuminated continuously. Mitigation The progressive loss of the vista will be partially offset by the construction and rehabilitation of the main levee on the western side of Hodgson Creek which will be approximately 30m in height and will partially hide the mining operations. Very little else can be done to hide the mining activities from the Pittsworth–Felton road, although planting of trees may have some effect. The processing

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areas will be landscaped and lights will be subject targeted and time limited to minimise annoyance to offsite dwellings. Environmental Management

5.13

The strategies and techniques to mitigate environmental impacts will be incorporated in an Environmental Management System (EMS) to the ISO 14001 standard which will operate from the start of construction. Separate EMSs will operate for the mining and coal preparation operation on the Mining Leases, west of Hodgson Creek and the petrochemical processing facility on the industrial site, east of Hodgson Creek.

5.14

Hazards and Risks

In addition to the potential hazards already identified as being associated with an open cut mining operation, such as personnel safety, environmental damage, vibration, noise, dust, etc., there are also potential hazards associated with the production, storage and transportation of hydrocarbon fuels. Mitigation There are well established procedures for dealing with hydrocarbon fuels and these will be identified in detail in the EIS.

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6

Stakeholder Consultation

Ambre Energy has started a consultative process with relevant interested parties. A key aspect of this process is discussions with landowners and community members directly affected by the Project to identify any areas of concern. This process will continue and includes identification of all stakeholders, discussion with Local, State and Federal Government representatives, communication plans and consultation and negotiation on measures required to address compliance and community concerns.

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