Committee members tasked with overseeing the Kangaroo Flat gold mine have called on the state government not to approve the transfer of mining licences, saying it would allow the previous owner to “walk away scot-free” from its further obligations to the community and the environment. 

Unity Mine Environmental Review Committee community representative for Eaglehawk, Ian Magee, said transferring the licences from Unity Mining to GBM Gold would allow Unity to shirk its responsibilities to address groundwater rising through abandoned mines beneath Bendigo.

He also poured cold water on plans to mine sand tailings on the site – which he said would raise dust, containing the potentially-fatal silica dust and arsenic.

“GBM are a very small company who are way out of their depth,” Mr Magee said. 

“But even if they could get this project going we wouldn’t want to have a bar of it, as a community, because of the health risks that are created if you go and disturb that sand again and create dust.

“If this were to be approved we would be shocked – we would expect the mining minister to use due diligence and we can’t see that it would pass any due diligence test.”

The retired engineer said the minister should enforce full rehabilitation of the legacy of modern mining in Bendigo. 

“The residents of Kangaroo Flat who suffer the dust from the tailing dams and the residents out at Woodvale who suffer from the effects of the evaporation ponds are insisting that there be no further mining activity.” 

One of those residents, the ERC’s other Eaglehawk community representative Vanessa Richardson, said the approval of GBM’s bid for the mining licences would be “a disaster”.

“They just don’t have the funding to manage such a toxic site, they’re a little ‘$1 company’, and we are fearful this problem will only be made worse if they’re let loose among piles of old mining sand right in amongst the Bendigo population,” Ms Richardson said. 

“That is a potential nightmare.”

Mr Magee said GBM chief executive officer John Harrison presented his company’s plans to resume mining at Kangaroo Flat to the ERC in March.

“It was certainly the view of community representatives that GBM presented no credible mining or other project for treatment of legacy historic tailings to our committee,” he said. 

In September last year GBM agreed to purchase Kangaroo Flat gold plant, equipment and facilities, including tenements, buildings and freehold land for $100,000. It also assumed the Unity’s nearly $6 million environmental bonds.

Mr Magee said it was the belief of community members of the committee that those bonds were significantly underestimated. 

He said that based on similar projects, full rehabilitation of the Woodvale and Kangaroo Flat sites could cost upwards of $20 million. 

“We would certainly estimate that this one has been underestimated by a factor of three,” he said. 

“That was born out by what the Royal Commission found after the fires at the coal mines at Morwell – those bonds have now been redone to about five times greater than they originally were,” he said.

Mr Magee said there was “a long history of mining companies walking away from their responsibilities” after the failure of a mine, pointing to the Townsville nickel refinery sold by BHP to Clive Palmer. 

“I’ve seen the media reports that when BHP found out the nickel price was going down, the plant needed too much maintenance and they wouldn't be able to sustain it and that further bond money was required, they sold it to Palmer,” he said.

“Clive ran it down for two or three years until it reached rock bottom – but he was quite clever and setup his business so he’s likely to escape the bond.”

The threat of rising groundwater

The ERC Eaglehawk community representative said both the Kangaroo Flat mine and Woodvale evaporation ponds should be fully restored to a natural state – including filling the 10-kilometre Swan Decline from the mine site. 

“The tailing dams at Kangaroo Flat need to be capped and the decline needs to be filled in,” he said. 

The Kangaroo Flat mine is on higher ground then the reef lines running below the Bendigo CBD – such as the Central Deborah line. But as the Swan Decline linked Kangaroo Flat with those lower workings, the pressure of gravity was pushing more groundwater into the lower ground, Mr Magee said.

“We’re talking very big holes which attract groundwater,” he said. 

“If you add those newly created chambers to the historic chambers, which were built during the 19th century, you are literally forcing the water to the surface in those lower lying areas.

“If you didn’t have groundwater pumping going on at the Central Deborah you would have groundwater bubbling to the surface in about half a dozen places in Bendigo: the cenotaph, the Central Deborah tourist mine, the tram depot...”

“Bendigo already had a groundwater problem from the legacy mines but Unity added another 30 to 40 per cent volume to that groundwater – they should be now paying their far share.

“In other words Unity is, at the moment, getting away scot-free.”