23 July 2007
Key Points:
Mining companies looking to develop the vast iron ore reserves of the Mid-West region of Western Australia face increased environmental hurdles in light of recent Environmental Protection Agency decisions and a policy vacuum.
The isolated ridges, outcrops and weathered monoliths of Banded Iron Formations ("BIFs") scattered across the Mid-West of Western Australia from Kalgoorlie to the Murchison River are rich in iron ore and present lucrative opportunities for miners. They are also home, however, to a large number of rare and previously undiscovered plants and unique ecological communities, many of which only exist in small populations on one or two of the isolated formations. It's a classic case of economy versus environment.
In the past year the Environmental Protection Authority ("EPA") has released two Bulletins promoting protection of the BIF ranges of the Mid-West from mining operations. The Bulletins, and the absence of a clear policy framework for mining in BIFs, have resulted in a great deal of uncertainty surrounding the development of a region which is estimated to contain $60 billion worth of iron ore.
Mt Gibson Bulletin
In November 2006 the Environmental Protection Authority recommended that a proposal by Mount Gibson Mining Ltd to process and mine iron ore from a ridge of BIFs within the Mt Gibson Ranges, about 300 kilometres north east of Perth, should only be permitted if further mining in the BIF ranges surrounding the lease was prohibited.
The EPA found that the ranges are home to a previously undiscovered species of plant, Lepidosperma sp. Mt Gibson, which is only known to exist on two formations. The EPA concluded that the proposed mine would impact around 47 percent of the known population of Lepidosperma sp Mt Gibson and 15 percent of the total known population of another rare Spinifex like plant Darwinia masonii.
In order to ensure the long-term conservation of these species, the EPA advised that the remaining BIF ridges of the Mt Gibson area that contain subpopulations of these species or provide possible habitats for these species should be protected as a Class A Nature Reserve prior to ground disturbing activities commencing.
Mt Manning Bulletin
In May this year the EPA recommended that the Mount Manning Region, approximately 400 kilometres north east of Perth, be recognised as a Biodiversity Hotspot and protected from mining by expanding the existing A Class Nature Reserve so that it covers an area of approximately 400,000 ha.
The EPA found that the area surrounding Mount Manning has high biodiversity conservation value due to its number of rare species and plant communities. The EPA also indicated that proposals to offset the loss of habitat through the preservation and management of adjacent formations is unlikely to be effective in conserving biodiversity because many formations contain species and communities which are unique to that formation.
Implications of these Bulletins
The Mid-West region is estimated to be capable of exporting over 50 million tonnes of iron ore a year, with the capacity to rank alongside the Pilbara and the Goldfields in its contribution to the Western Australian economy. The EPA recommendations have fuelled concern in the mining industry that many of the other iron rich BIFs of the Mid-West may also be recognised as environmentally significant and unsuitable for mining.
It is now up to prospective miners of BIFs to show that these formations can be mined in an environmentally acceptable manner. The prevalence of small localised populations of rare and undescribed plant species makes this a great challenge. Outgoing Chief of the EPA Wally Cox outlined the unique difficulty in managing mining in the region:
"any time a junior iron ore company goes into those banded iron formations they find new species, new vegetation communities."
He lamented that "there is an absence of a policy framework to say we must conserve some of the banded iron formations and we will allow others to be developed for mining purposes."
A review is currently being conducted by the Department of Environment and Conservation and the Department of Industry and Resources to examine the environmental, social and economic effects of mining the banded iron formations of the Mid-West. The review is expected to form the basis of a policy for the development of mining in the region. The findings of the review are expected to be presented to the Government by the end of July and will be pivotal in defining the future of iron ore mining in the Mid-West.
For further information, please contact Brad Wylynko.
