Future plans to increase coal mining in the Sydney and Illawarra water catchment area will face a more stringent approvals process, according to the NSW Government.
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On Saturday, Planning Minister Rob Stokes announced that the government had accepted all 50 recommendations of an independent expert panel report into mining in the catchment, which was released late last year.
Among the findings were that longwall mining was having worse impacts than predicted, with water losses from mining in the catchment of up to 8ML a day.
Now, Mr Stokes said there would be "better protections, stronger assessment and more environmental offsets" to ensure the drinking water supply is safeguarded.
"We want to ensure we have every measure in place to protect Sydney's water supply for generations to come," Mr Stokes said.
"We've accepted all of the recommendations from the panel and have established an interagency taskforce to implement a detailed action plan throughout this year.
He said said the move would provide certainly for water supply as well as protections for jobs, especially in the Illawarra.
These actions will improve our existing comprehensive assessment and monitoring of underground coal mining while providing certainty for both Sydney's water supply and thousands of jobs across NSW - particularly 5,000 workers in the Illawarra.
- Rob Stokes
"These actions will improve our existing comprehensive assessment and monitoring of underground coal mining while providing certainty for both Sydney's water supply and thousands of jobs across NSW - particularly 5,000 workers in the Illawarra," he said.
The government said its new action plan would ensure there was a net gain for the metropolitan water supply by requiring more offsetting from mining companies.
The state will also set up a new independent expert panel to advise on future mining applications in the catchment, strengthen surface and groundwater monitoring, improve access to and transparency of environmental data and adopt a more stringent approach to the assessment and conditioning of future mining proposals to minimise subsidence impacts.
The government will also review potential future water losses from mining "in line with the best available science", and introduce a licensing regime to properly account for any water losses.
In October, after the independent report was released, Mr Stokes announced that any bids to expand the Dendrobium and Russell Vale coal mines would be on hold until after the government determined its response to the panel.
However, in March, NSW Planning Department quietly approved the proposal from Peabody Energy-owned Metropolitan Mine to develop three new longwalls.
Two of the longwalls would go under the Woronora Reservoir, which drains into the Woronora Dam and supplies water to the Sutherland Shire and areas of the northern Illawarra.