Issue
Is the pumping of water from a mine pit to a holding pond and subsequently to surrounding waterways, 'mining operations' as defined in section 11 of the Energy Grants (Credits) Scheme Act 2003 (EGCSA)?
Decision
Yes. The pumping of water from a mine pit to a holding pond and subsequently to surrounding waterways is 'mining operations' as defined in section 11 of the EGCSA.
Facts
An entity operates an open cut mine.
The entity uses diesel fuel to pump water from the mine pit into a holding pond so that ore can be extracted from the mine pit. The pond is situated within the boundaries of the mine.
After treatment, the water is pumped from the holding pond into the surrounding natural waterways where it is taken away from the mine site.
Reasons for Decision
In this instance, the client is pumping the water in a two stage process. Each stage will be examined in turn:
Pumping from the mine pit to the holding pond
The term 'mining operations' is defined in section 11 of the EGCSA. The definition includes two broad categories, a number of specific activities, and a number of specific exclusions.
The two broad categories appear in subsection 11(1) of the EGCSA and cover: (a) exploration or prospecting for minerals, or the removal of overburden and other activities undertaken in the preparation of a site to enable mining for minerals to commence; or (b) operations for the recovery of minerals, being: (i) mining for those minerals including the recovery of salts by evaporation; or (ii) the beneficiation of those minerals, or of ores bearing those minerals.
As the water occurs naturally in the mine pit, the mining company must remove it before it can mine for the minerals. The pumping of the water from the mine pit to the holding pond would qualify as 'other activities undertaken in the preparation of a site to enable mining for minerals to commence'. Therefore the pumping of the water would qualify as 'mining operations' under paragraph 11(1)(a) of the EGCSA.
Even if the water collected in the pit as a result of 'mining operations', and required continual pumping to remove it, the pumping of the water would constitute part of the 'mining for those minerals' and would therefore qualify as 'mining operations' under paragraph 11(1)(b) of the EGCSA.
Pumping from the holding pond into the waterway
One of the specific activities included within the definition of 'mining operations' is a 'mining waste activity', which is defined in section 16 of the EGCSA. The term 'mining waste activity' is defined as meaning two activities; • the removal of waste products of a mining operation referred to in paragraphs 11(1)(a) or 11(1)(b) of the EGCSA from the place where the mining operation is carried on, or • the disposal of waste products of a mining operation referred to in paragraphs 11(1)(a) or 11(1)(b) of the EGCSA at the place where the mining operation is carried on.
We have already determined that the removal of the water from the pit constituted 'mining operations' for the purposes of paragraphs 11(1)(a) and/or 11(1)(b) of the EGCSA. As the water is unwanted by the mining company, it can be accepted that the water is a waste product from 'mining operations' referred to in paragraphs 11(1)(a) or 11(1)(b) of the EGCSA.
As the waste product of a 'mining operation' contained in paragraphs 11(1)(a) and/or 11(1)(b) of the EGCSA is being removed from the place where the 'mining operation' is carried on, the requirements of the first category of 'mining waste activity' is satisfied.
Summary
The pumping of water from the mine pit to the holding ponds and, subsequently to surrounding waterways which are located away from the 'mining operation' is 'mining operations' as defined in section 11 of the EGCSA.