INDEPENDENT ENVIRONMENTAL AUDIT REPORT. Bulga Surface Operations

INDEPENDENT ENVIRONMENTAL AUDIT REPORT May 2013 Bulga Surface Operations

Report REPORT TITLE: Report CLIENT: Bulga Surface Operations Revision Number Report Date Report Author Reviewer Draft 23 January 2013 W Jones M Frankcombe 0 29 January 2013 W Jones M Frankcombe 1 29 May 2013 W Jones M Frankcombe Page i

Table of Contents Report 1 INTRODUCTION... 1 1.1 Background... 1 1.2 Audit Scope... 1 1.3 Audit Objectives... 2 2 AUDIT PROCESS... 3 2.1 Opening Meeting... 3 2.2 Site Inspection... 4 2.3 Document Review... 4 2.4 Review of Previous Audit Recommendations... 4 2.5 Review of EA Statement of Commitments... 4 2.6 Closing Meeting... 5 2.7 Audit Report... 5 2.8 Agency Consultation... 5 3 AUDIT FINDINGS... 6 3.1 Site Inspection and Document Review... 6 3.2 Review of Previous Audit Recommendations... 7 3.3 Review of EA Statement of Commitments... 13 3.4 of Noise... 14 3.5 of Air Quality... 14 3.6 of Mine Rehabilitation... 15 3.7 Agency Consultation... 15 3.8 Review of Management Plans... 16 3.9 Regulatory Action... 17 3.10 Annual Reviews... 18 3.11 Monitoring Results and Trends... 18 3.11.1 Noise... 18 3.11.2 Blasting... 19 3.11.3 Surface water... 19 3.12 Community Complaints... 19 4 NON COMPLIANCES AND IMPROVEMENT OPPORTUNITIES... 20 4.1 Noncompliances... 20 4.2 Improvement Opportunities... 24 5 CONCLUSION... 26 Page i

Report 1 INTRODUCTION Landloch Pty Ltd (Landloch) was engaged by Bulga Surface Operations Pty Ltd (BSO) to conduct an independent environmental audit of BSO operations in Singleton NSW. The audit was undertaken to determine compliance with operations conducted under Development Approval (DA) 41-03-99 and six subsequent modifications issued by the NSW Department of Planning and Infrastructure (DoP&I). The audit included an assessment of BSO s implementation of the following approvals/documents: Minister s Conditions of Approval (MCoA) issued with the DA; Environment Protection License (EPL 563) issued by the Environmental Protection Authority (EPA); Mining Lease (No. 1547) issued by the NSW Department of Resources and Energy (DRE); and Environmental Impact Statements and modification application documents prepared in association with the Development. A description of the independent environmental audit scope, methodology, audit findings and subsequent recommendations is presented below. 1.1 Background The Bulga Complex includes Bulga Coal Surface Operations, Bulga Underground Operations (BUO) and the Coal Handling and Preparation Plant. The Bulga Complex is located 15 kilometers southwest of Singleton near the village of Broke in New South Wales. The Bulga Complex produces approximately 16 million tonnes of semi soft coking coal and thermal coal a year, which is railed to the Port of Newcastle for export to China and Japan. The coal is used predominately for steel making and power generation. Coal mining at the Bulga Complex began in 1982 when BHP was granted approval to mine coal, known as the Saxonvale Mine. Underground mining commenced at South Bulga in 1994 and Beltana in 2003. Operating as separate business units, BSO and BUO are managed by Xstrata Coal NSW (XCN). 1.2 Audit Scope The independent environmental audit was conducted to meet Schedule 2 Condition 8.4 of DA 41-03-99 and was conducted over a period including 4, 5 and 6 December 2012. Project Approval was issued on 23 December 1999 and applies to Continued Mining of the Bulga Open Cut Pit Operations in Coal Lease Areas 372 and 224 and Out-of-Pit Emplacement of Overburden on the new South Whybrow site. Environmental Impact Statement (EIS) titled Bulga Open Cut Continued Mining Volumes 1and 2, dated February 1999 was prepared for this approval. The following modifications have been made to this consent subsequent to the original approval: Modification Application 41-03-99 MOD 1 and supporting information prepared by Umwelt Environmental Consultants and dated December 2000; Modification Application 41-03-99 MOD 2 and supporting information prepared by Umwelt Environmental Consultants and dated 21 November 2007; Page 1

Report Modification Application 41-03-99 MOD 3 and supporting information prepared by Umwelt Environmental Consultants and dated 25 August 2008; Modification Application 41-03-99 MOD 4 and Environmental Assessment prepared by Umwelt Environmental Consultants, dated August 2009, and the response to submissions dated October 2009; Modification Application 41-03-99 MOD 5 and Environmental Assessment prepared by Hansen Bailey Pty Limited, dated 15 February 2010; and Modification Application 41-03-99 MOD 6 and document titled Bulga Coal Complex (Bulga Open Cut Mine) XRail Refueling Facility, dated February 2011. The independent environmental audit assessed compliance against a consolidated set of consent conditions that included the original approval and subsequent modifications. The scope of the independent environmental audit included BSO operations, activities and infrastructure associated with ML1547. This independent environmental audit excludes BUO s South Blakefield Underground Mine operations, activities and infrastructure associated with ML1547. 1.3 Audit Objectives As noted above, this independent environmental audit was conducted to comply with the requirement with MCoA Schedule 2 Condition 8.4 contained in the Project Approval. Therefore the independent environmental audit: was conducted by a suitably qualified, experienced, and independent team of experts whose appointment had been endorsed by the Director General of the DoP&I; included consultation with the relevant agencies; assess, in respect of the requirements of this consent and any relevant mining lease or environment protection license, the environmental performance of the development and its effects on the surrounding environment; assess whether the development is complying with relevant standards and performance measures specified in these approvals (including under any strategy, plan or program required under these approvals) and with other statutory requirements; review the adequacy of strategies, plans or programs required under these approvals; and, if necessary; and recommended measures or actions to improve the environmental performance of the development, and/or any strategy/plan/program required under these approvals. The audit team for this independent environmental audit included experts in the field of noise, air quality, mine rehabilitation and erosion and sediment control. Page 2

Report 2 AUDIT PROCESS The independent environmental audit was conducted using an audit checklist developed specifically for the BSO operations in compliance with the consolidated project approval, Environment Protection License (EPL) 563, Mining Lease No. 1547 and the Environmental Impact Statement. The completed audit checklist is appended to this report as Appendix A. The independent environmental audit was conducted by Wayne Jones (Lead Auditor). Neil Pennington of Spectrum Acoustics Pty Ltd was engaged to undertake an independent environmental audit of noise issues associated with BSO operations. A copy of this independent environmental acoustic audit report is appended to this report as Appendix B. Jason Watson of SLR Pty Ltd was engaged to undertake an independent environmental audit of air quality issues associated with BSO operations. A copy of this independent environmental air quality audit report is appended to this report as Appendix C. Michael Frankcombe of Landloch Pty Ltd was engaged to undertake an independent environmental audit of mine rehabilitation issues associated with BSO operations. The outcomes of this independent mine rehabilitation audit are provided as Section 3.6 of this report. Paul Amidy, Scott Wolfenden and Stephen Shoesmith of BSO were in attendance throughout the audit process. The independent environmental audit process at BSO included: offsite planning for the site audit; collection of relevant background documentation; preparation of audit checklist; an opening meeting; a site inspection; collecting audit evidence through information gathering, observations and interviews; review of previous audit recommendations; review of EA Statement of Commitments; a close out meeting; evaluating audit documentation; and compiling this audit report. 2.1 Opening Meeting The opening meeting was held at the BSO site office at 0800 hours on 4 December 2012. The opening meeting was attended by Wayne Jones (Lead Auditor), Michael Frankcombe (Rehabilitation Specialist) and BSO personnel Paul Amidy (BSO E&C Manager), Stephen Shoesmith (BSO E&C Officer) and Scott Wolfenden (BSO E&C Officer). An explanation of the independent environmental audit process was delivered and it was emphasised that the audit used a compliance sampling methodology whereby adherence to a checklist of approval conditions were audited. One implication of using this approach to auditing is that neither all compliances, nor all Page 3

Report noncompliances, will be identified during the process. The audit methodology does, however, provide a statistically valid level of confidence for the assessment of BSO s operations. It was also stated that the audit report would be based on objective evidence. 2.2 Site Inspection A site inspection of BSO facilities was undertaken by Wayne Jones, Michael Frankcombe, Paul Amidy, Stephen Shoesmith and Scott Wolfenden, on 4 December 2012 and included observation of: opencut mining operations; rehabilitated overburden emplacement areas; Area Station fuel tank farm; Area Station workshop; old tailings dam; various water management structures; typical monitoring points; various haul roads and accesses; washery surge dam; washery; product stockpiles; workshop and stores; XRail facility; and site access road intersections. Jason Watson (Air Quality Specialist) and Paul Amidy inspected the site on 5 December 2012. Geoff Kelly (BSO Operations Manager), Nick Slater (BSO Mining Manager) and Dan Cupitt (BSO E&C Officer) were present at various times throughout the audit process. Neil Pennington (Acoustic Specialist) was familiar with facilities and receptors in the region of BSO s operations and undertook his assessment based on an offsite review of the data provided. 2.3 Document Review Paul Amidy, Stephen Shoesmith and Scott Wolfenden provided assistance with collection and provision of appropriate audit documentation for each approval condition. Supporting audit documentation was provided in electronic and hard copy format. 2.4 Review of Previous Audit Recommendations A review of completion status of recommendations from the 2009 independent environmental audit was undertaken. The results of the review of recommendations from the 2009 independent environmental audit are presented in Table 3.1 of this report. 2.5 Review of EA Statement of Commitments While not all environmental assessments relevant to BSO s Approval contain Statements of Commitments, to provide a snapshot of compliance, an assessment of compliance with the Statements of Commitments documented in Modification 5 documentation, the Noise Modification 2010, was undertaken. The results of the Page 4

Report assessment of compliance with Modification 5 Statements of Commitments are presented in Table 3.2 of this report. 2.6 Closing Meeting The closing meeting was conducted at 1700 hours on 6 December 2012 and included a presentation of preliminary audit findings to BSO and XCN personnel Paul Amidy, Stephen Shoesmith, Scott Wolfenden, Dave O Brien and Ralph Northey. 2.7 Audit Report The completed audit checklist, attached as Appendix A, was compiled using: notes taken from discussions with BSO personnel; review of appropriate Xstrata and BSO documentation; and observations and notes recorded during the site inspection. A summary of audit noncompliances and recommendations identified during this audit are included in Section 3 of this report. BSO is required to submit a copy of this independent environmental audit report to the Director General DoP&I, together with its response to any recommendations contained in the independent environmental audit report by the end of January 2013. Within three months of submitting the independent environmental audit report to the Director General DoP&I, BSO is required to review, and if necessary, revise the strategies/plans/programs required under their approval to the satisfaction of the Director General. 2.8 Agency Consultation Two agency representatives were consulted in relation to the compliance audit: Steve Clair (EPA); and Ben Harrison (DoP&I). The lead Auditor was unsuccessful in contacting Greg Summerhayes of Department of Resources and Energy and Fergus Hancock of NSW Office of Water. A summary of consultation with agency representatives is included as Section 3.7 of this report. Page 5

Report 3 AUDIT FINDINGS The findings of this independent environmental audit confirm that BSO s Environmental Management Strategy and Environmental Management Plans have generally been prepared to reflect the requirements of DoP&I s MCoA, EPA s EPL, and DRE s Mining Lease Conditions, in addition to the commitments outline in the Environmental Impact Assessment and subsequent Environmental Assessments. Specific examples of BSO s proactive approach to innovative environmental management included: Accelerated emplacement rehabilitation. The rehabilitation of over 260 hectares in 2012 will improve the ecological values of the Bulga site, significantly mitigate visual impacts along Broke Road and minimised sources of particulate matter, hence improving air quality in the region; Improved water level monitoring. Following the 2011 tailing incident, level transmitters have been installed on the tailings line purge valve dams. Should the dam level rise significantly an alarm will sound in the CHPP control room and corrective actions can be implemented; Commissioning of the Dispatch Room. Improved mine planning and execution, real time noise/air quality monitoring and dispatch room staff who understand environmental consequences of operation are combining to better manage mining operations, thereby minimising air quality and noise exceedences; Improved signage on water management structures. New colour coded signage has been installed at water management facilities at the BSO facility. The signage provides positive confirmation of the structures name and provides information on where the water management facility overflows or is pumped to; Senior Management Buy In. Demonstrated in Business Delivery Model, from 8:30am operations meetings to monthly meetings with the whole of BSO s staff. Environmental issues are provided as much significance as operational and safety issues by Senior BSO management; and Tailings emplacement via risers. An innovative approach to tailings emplacement via risers has allowed BSO to maximise the volume of tailings emplaced, while creating a landform that assists in separating return decant water as well as final rehabilitation landform. 3.1 Site Inspection and Document Review The site inspection and document review illustrated that BSO has generally shown a high level of compliance when implementing the environmental management requirements issued under the MCoA including: proactive and effective community/agency consultation; effective environmental management team; and implementation of an electronic internal compliance database. There were, however, administrative noncompliances identified which related to: forwarding documents to agencies in a timely manner; revising position descriptions and EMS to confirm personnel responsibilities for certain environmental tasks; including a small number of specific MCoA objectives and strategies missing from the EMS; various EMPs and the MOP require revision and approval by relevant agencies to ensure compliance; including agencies in documented consultation prior to submitting documents for review and approval; and Page 6

Report providing a schedule for the progressive retrofitting of lighting equipment at site. Noncompliances for the above aspects are provided in Table 4.1 of this report. Other improvement opportunities are discussed in Table 4.2 of this report. 3.2 Review of Previous Audit Recommendations A review of completion status of recommendations from the 2009 independent environmental audit was undertaken. The results of this review are provided in Table 3.1 below. Table 3.1 Review of 2009 Audit Recommendations Non Conformance (NC) 2009 Audit Recommendation (R) 2012 Audit Status NC1, NC11 and NC12 NC14 NC3 R1: It is recommended that a formal review of compliance with AS1940 be undertaken, the use of self bunded tanks be considered, and the installation, operation and maintenance of oil/water separators be substantially improved R2: DECCW should be notified of the Potential or Actual Material Environmental Harm in accordance with condition R2 of EPL 563 and all land and water contamination remediated. A review of all hydrocarbon management practices should be undertaken and changes implemented to bring the site in line with accepted industry practice R3: Environmental Management Plans be updated every 5 years as required by the Development Consent. It was noted that this was a non-compliance in the independent environmental audit conducted in 2006 AS 1940 Audit completed for Bulk Tanks and Area Station. AS 1940 Compliance Certificates secured for Bulk Tanks and Area Station. Various oil/water separator upgrades including Area Station Workshop, Area Station tank farm c/w operation and maintenance manuals Recommendation addressed Letter from BSO to OEH dated 2 Dec 2009 under S60 of CLM. Report from BSO to OEH dated 19 Feb 2010 under POEO s148. Phase 2 Report Feb 2010 provided to OEH. Significant works undertaken in accordance with approved Remedial Action Plan Recommendation addressed CMO Compliance software updated to include all approvals and management plans. This software provides advice on actions required provides notification emails to prompt EMP revision ACHMP has been revised and initial review undertaken by OEH Recommendation is being addressed NC2 R4: Authorisation for environmental officers to stop work in the event of an adverse environmental impact should be included in Position Description responsibilities and Site Management Plan documentation. This information should be communicated to staff at the site induction Position Description has been updated to reflect this authorisation. Business Delivery Model Charter reinforces this authority Information clearly demonstrated at 8:30am operations meetings. EMS should be updated to reflect this authorisation Page 7

Report Non Conformance (NC) 2009 Audit Recommendation (R) 2012 Audit Status Recommendation is being addressed NC8 NC9 R5: In accordance with Chapter 11 of the EPA Industrial Noise Policy (NSW EPA INP, 2000) deems a development to be in non-compliance only when the monitored noise level is more than 2 db above the statutory nose limit specified in the consent or license. All measured noise levels in 2007 and 2008 are considered within the Statutory noise limits. R6: In accordance with Chapter 11 of the EPA Industrial Noise Policy (NSW EPA INP, 2000) deems a development to be in non-compliance only when the monitored noise level is more than 2 db above the statutory noise limit specified in the consent or license R7: It is noted that Bulga Coal have been proactive in applying for a modification to the DA _41-03-99 to develop outcomes based noise management at the site. As part of the noise MCoA modification application, Bulga Coal have conducted a Presentation to the DoP and the CCC. Bulga Coal have also initiated the purchase of a new fleet of Plant and Equipment. Noise recommendations are provided to assist in the development of a revised NMP No actions required BSO have undertaken a number of actions as part of Modification 5 of BSO approval - Noise Modification 2010. These actions have included: Installing real time monitoring network Progressively upgrading or replacing equipment Implementing noise management and mitigation measures as required Revision of NMP Recommendation addressed NC10 R8: Noise monitoring to include measurement and presentation in the reporting of all LA1, 15min noise levels as per this condition Implemented - Review of Quarter 1 2012 monitoring report illustrates 1min Leq results Recommendation addressed NC4 R9: It is noted that exceedences have been investigated as documented in the AEMR and future works should adopt appropriate management measures to reduce the likelihood for further exceedance events A number of control strategies have been implemented at BSO including real time dust monitoring and the implementation of the dispatch control room. Exceedence events will continue to be investigates and, if established part of BSO operations, actions will be taken Recommendation is being addressed Page 8

Report Non Conformance (NC) 2009 Audit Recommendation (R) 2012 Audit Status NC4 R10: All analytical laboratory and dust monitoring reports should clearly identify exceedance events and report All analytical lab results now received electronically, allowing ease of review, now checked monthly as part internal Xstrata standards Recommendation addressed NC4 R11: 24 hour and annual PM10 criteria in DMP, 2002 and Bulga EIS are not consistent with those in Table 1 and 2 and it is recommended to ensure these are aligned Dust Management Plan has been revised and these criteria are included in Section 6.1 and 7.5 Recommendation addressed NC5 R12: Where dust criteria exceedences occur, mining activity practices should be reviewed, where appropriate modified and documented Real time air quality monitoring is being undertaken at a number of sites around the facility. Cameras are utilised to inspect areas of potential dust generation in a time effective manner. Dispatch Control room recently commissioned and operated by operations staff that has an understanding of environmental consequences. Equipment is shut down or relocated to minimise dust generation. Exceedence events will continue to be investigated and, if established part of BSO operations, actions will be taken Recommendation being addressed NC13 R13: Stabilise disturbed areas with a geobinder or vegetation as soon as possible to reduce the potential for dust generation and soil erosion Specific area nominated for rehabilitation in 2012 was approximately 5 hectares. Aerial seeding and rehabilitation has been undertaken on 260 hectares in 2012 Recommendation addressed NC6 R14: To reduce the likelihood of further exceedance events, blasting noise management measures provided as follow up actions in Report into the Blast at Bulga Coal, 4th April 2009 should be adopted in full in the Bulga Coal Blast and Vibration Management Plan, August 2009 and communicated to all staff and contractors (in writing) New cameras have been installed to inspect areas of blast events in a time effective manner. Implementation of EnvMet software package has assisted in reducing further exceedence events, inversion assessment is undertaken each morning. Blast was stopped on day of site inspection due to meteorological conditions. The BVMP has recently been revised Page 9

Report Non Conformance (NC) 2009 Audit Recommendation (R) 2012 Audit Status Recommendation being addressed NC7 R15: Blast overpressure and vibration monitoring methodologies to be detailed in the Blast and Vibration Management Plan, August 2009 BVMP recently revised, addressed in Section 3.52 Recommendation addressed NC15 R16: Reshape and stabilise eroding areas as soon as possible A comprehensive erosion and sediment control project has been implemented since the 2009 audit that targeted the stabilisation of exposed areas via various revegetation techniques such as aerial seeding, hydro-mulches and compost blankets. The lag time between spoil dump shaping and revegetation works observed during the 2009 audit has been substantially reduced with revegetation works being implemented much quicker Recommendation addressed - R17: Test all soils/spoils used in rehabilitation and ameliorate the soils/spoils according to the results of the soil testing Section 4.5 of Bulga Rehabilitation Guideline Rev 1 describes the methodology for the testing and amelioration of mine soils and spoils. ITP s have been prepared with appropriate hold points to ensure compliance with these requirements. Soil Report by ESSA Aug 2011 Recommendation addressed - R18: Undertake seeding of reshaped areas as soon as possible of shaping to minimise the risk of soil erosion Section 3.2.1 of Bulga Rehabilitation Guideline Rev 1. The lag time between spoil dump shaping and revegetation works observed during the 2009 audit has been substantially reduced with revegetation works being implemented much quicker Recommendation addressed - R19: Formally design and survey diversion banks and drains on site to ensure they are the correct capacity, grade and spacing Section 4.5 of Bulga Rehabilitation Guideline Rev 1. Updated Final Landform Drainage Design 2012 Rehabilitation GSSE May 2012. Page 10

Report Non Conformance (NC) 2009 Audit Recommendation (R) 2012 Audit Status ITP s have been prepared and completed Recommendation addressed - R20: Undertake as constructed surveys of diversion banks/drains and landforms to ensure compliance with rehabilitation commitments Section 4.5 of Bulga Rehabilitation Guideline Rev 1. Figures illustrating survey of contour banks for 2012 Rehabilitation Scope Surveying Conformance Report Recommendation addressed - R21: Ensure erosion protection is provided below the outlets of all diversion banks/drains Section 4.5 of Bulga Rehabilitation Guideline Rev 1. Conveyance channel, scour protection Version 5. Witnessed erosion protection at outlets during site inspection Recommendation addressed - R22: Implementation of a program to repair erosion on rehabilitated landforms 2012 Annual Rehabilitation Plan Section 3.9, Appendix 3 budget allocation for Care and Maintenance projects Recommendation addressed - R23: Bulga Coal should integrate all Environmental Management documentation into an Environmental Management System that includes all the requirements of the Conditions of approval, lease and EPL - R24: Bulga Coal should develop a compliance matrix similar to that in the Environmental Management Plans to illustrate where conditions and other requirements are addressed in the EMS - R25: Bulga Coal should consider linking objectives and performance targets to legal requirements Section 10 of EMS revised in mid-2012 Recommendation addressed CMO compliance software has been implemented Recommendation addressed The BSO Business Delivery Model and Horizon Plans link objectives and performance targets to legal requirements Recommendation addressed Page 11

Report Non Conformance (NC) 2009 Audit Recommendation (R) 2012 Audit Status - R26: the Mine Operations Plan (MOP) should be revised to cross reference and refer to other Environmental Management documents including the Environmental Management Strategy and Environmental Management Plans Existing approved 2012 MOP extended to Dec 2013. Preparation of new MOP by GSSE commenced in 2012 Recommendation being addressed - R27: BCM need to ensure that the results of Consultation with the Aboriginal community regarding any approvals that are sought under Part 6 of the National Parks and Wildlife Act 1974 are included in subsequent AEMRs - R28: Conservation measures for Area 2 and other specific conservation areas should be specifically identified in the Heritage Management Plan 2009 AEMR documents AHIP 3212 consultation Recommendation addressed Section 8 of the draft revised ACHMP contains relevant details of conservation areas Recommendation being addressed - R29: Develop a Construction Environmental Management Plan including a Risk Assessment prior to construction Robson Project Management Plan Section 3 contained relevant details associated with environmental management of the construction of the CHPP Dam Recommendation addressed - R30: Include CHPP Dam operations in Environmental Management documentation including an operational environmental risk assessment Risk assessment undertaken as part of submission to DSC Recommendation addressed - R31: Management requirements for blast design should be provided in further detail BVMP has been revised to accommodate these requirements Recommendation addressed - R32: A review or audit of implemented noise management measures should be undertaken on a quarterly basis or further to adverse comment or complaint to noise Noise management implemented measures daily via real time monitoring network, control room, dispatch and cameras Recommendation addressed - R33: Following the performance review of noise mitigation measures the Noise Management Plan NMP was revised after 2009 modification and Page 12

Report Non Conformance (NC) 2009 Audit Recommendation (R) 2012 Audit Status (NMP) should be revised to include additional measures to be implemented on site again in 2012 to include real time monitoring etc Recommendation addressed - R34: A Lighting Management Plan was approved in 2003, however, a new condition has been issued as per modification application 41-03-99 MOD 4 which does not have a timeframe for implementation provided by DoP. As this condition was only provided by DoP just prior to the audit (02/11/2009) it is recommended that BCM outline a timeframe to provide a Visual Amenity Action Plan (CoA 3.7) to implement this condition Lighting audit complete and retrofitting of lighting equipment being implemented progressively. Timeframe or Visual Amenity Action Plan yet to be provided to DoP&I Recommendation still to be addressed 3.3 Review of EA Statement of Commitments As detailed in the previous section, Recommendation 24 from the 2009 Audit was addressed and CMO compliance software has been implemented by BSO. A review of the CMO system and its content confirmed that, where available, Statement of Commitments were included from BSO s various environmental assessments. It should be noted that not all of the BSO documents supporting documentation included specific tables or lists of Statements of Commitments. While review of BSO s CMO compliance software database and its contents identified a number of commitments contained within the text of the EA and subsequent modification documents, it was not confirmed that all commitments were captured. It is recommended that BSO undertake a systematic review of the original Environmental Assessment and documents supporting subsequent modifications to confirm that all commitments are loaded into the CMO compliance software database prior to the next. A detailed review of compliance with the statement of commitments documented in Modification 5 EA documentation, the Noise Modification 2010, was undertaken as part of the. The results of this review are provided in Table 3.2 below. Table 3.2 Review of EA Statement of Commitments Ref Description Status 1 Install a representative real time noise monitoring network to proactively manage noise emissions from the BCC Real time noise monitoring network was observed during the site inspection and from the dispatch control room Commitment addressed 2 Progressively either upgrade or replace the mobile equipment fleet with noise attenuation generally in accordance with the schedule A number of the new mobile equipment fleet with noise attenuation were observed during the site inspection. Page 13

Report Ref Description Status Remainder of the redundant truck fleet was observed parked up on the Bayswater overburden emplacement dump Commitment addressed 3 Implement noise management and mitigation measures as required to ensure noise levels described in this EA at privately owned receivers remain within the predictions Only one resident has requested the implementation of noise mitigation measures to ensure noise levels remain within the predictions described in this EA at privately owned receivers. Mitigation measures were provided Commitment addressed 4 Revision of the existing BCC NMP to incorporate the revised INP based and project specific noise criterion, the revised noise predictions, real time noise monitoring network and any additional noise mitigation and management controls The NMP was revised to reflect Modification 5 in mid 2012. Section 4 of the revised NMP provides project specific noise criterion. Section 6.3 of the revised NMP describes the real time noise monitoring network, sound power testing of equipment detailed in Section 6.4 Commitment addressed 3.4 of Noise The Spectrum Acoustic independent audit report of acoustic performance at BSO concluded that: 1. Table 3.1 Yearly Summary of Noise Monitoring Data in the 2010 and 2011 AEMR s contains annual average and maximum values for the LA1, LA10, LAeq and LA90 percentiles. This data does not relate to any of the noise emission criteria, are for total measured noise and not for the Bulga Coal Complex contribution and therefore convey no meaningful information; 2. Noise related complaints dropped from 31 in 2009 to 22 in 2010 and 18 in 2011. This feedback from the community suggests a decrease in the general level of noise impacts; 3. Four events where the noise criteria were exceeded were reviewed as part of the Acoustic specialists report. None of the events were formal exceedences of the BSO noise criteria for reasons consistent with the INP and/or project consent; 4. The protocol to determine compliance with the site specific noise criteria, as required under MCoA 6.3.8 (b), is acceptable, however the NMP does not provide a response protocol and contingency plan for action when noise levels are nearing or exceeding the cumulative assessment criteria. Formal recommendation has been made for consideration regarding the monitoring/management of cumulative mine noise levels; and 5. Formal recommendation has been made for consideration regarding determination of temperature inversion strengths. 3.5 of Air Quality The SLR independent audit report of air quality issues at BSO concluded that: 1. Dust Management Plan does not meet all the specific requirements detailed in the MCoA; 2. There were a minor number of dust exceedences at two location (E1 and H1b); and Page 14

Report 3. There was a discrepancy between the adopted deposited dust criteria between AEMRs. 3.6 of Mine Rehabilitation The Landloch independent audit report of rehabilitation issues at BSO concluded that: 1. BSO was generally compliant with conditions relating to rehabilitation. The non-compliances generally relate to administrative matters relating to document submission and the future management of offset areas; 2. BSO has significantly improved all aspects of rehabilitation planning and implementation including landform design that considers spoil characteristics and limitations, since the 2009 audit; 3. BSO have changed their primary post mine land use from grazing to biodiversity which is more appropriate for constraints posed by the landform design and mine spoil materials; 4. BSO have undertaken shaping and direct seeding of the Whybrow spoils to improve visual amenity, reduce soil erosion and dust emissions; 5. BSO has undertaken a large scale direct seeding trial using EcoBlanket compost blankets in lieu of using poor quality topsoil. Limited rain had fallen prior to the audit and limited vegetation had established in these areas. The Rehabilitation Specialist has had extensive experience with the use of EcoBlankets on other projects and considers this to be best practice; 6. Permanent drainage from some of the recently rehabilitated spoil dumps was observed to be via diversion banks, trapezoidal channels and rock-lined drop structures. BSO have revised their designs, specifications, construction and inspection processes to improve the performance of these works and verify construction is in accord with the designs; 7. Structural erosion and drainage control works such as diversion banks and rock-lined drains constructed on dispersive spoils can increase the risk of tunnel and gully erosion in the long term. It is suggested that BSO trial removing diversion banks once vegetation cover is well established to encourage sheet flow drainage conditions instead of concentrated flow drainage conditions (given that the slope gradient, treatment of dispersion and soil surface cover are the critical factors for slope stability at BSO); 8. BSO should consider adopting a non-concentrating landform design for spoil dumps associated Bulga Optimisation Project; 9. BSO have implemented two levels of independent annual rehabilitation monitoring including the use of modified ecosystem function analysis to compare rehabilitated areas with analogue sites against the rehabilitation performance criteria described in the Landscape Management Plan; and 10. Overall BSO have demonstrated substantial improvement in all aspects of rehabilitation planning, management and implementation since the 2009 audit and in many aspects their methods are the highest standard that the Rehabilitation Specialist has observed in the Hunter Valley. 3.7 Agency Consultation In accordance with MCoA Schedule 2 Condition 8.4(a)(ii) consultation was undertaken with representatives of agencies relevant to the BSO facility as part of this independent environmental audit. Feedback on this consultation is provided below. Page 15

Report Steven Clair confirmed that EPA policy is to provide no specific comment and to refer all enquiries to the EPA Public Register. Review of EPL No: 563 on the NSW EPA Public Register webpage did not identify any specific penalty notices. Ben Harrison of DoP&I provided a written list of expectations to be included in the audit methodology applied at the BSO facility. The key issues identified included review of: MCoA, EPL and ML conditions; Management Plans; Statement of Commitments; Monitoring results and trends; Community complaints; Regulatory Action; Annual Reviews; and Improvement Opportunities. A further meeting with Ben Harrison in early 2013 saw additional details included in the final audit report. The lead Auditor was unsuccessful in contacting Fergus Hancock of NSW Office of Water and Greg Summerhayes from DRE. The key issues identified through agency consultation are addressed in this Audit Report. 3.8 Review of Management Plans During the preparation of the attached audit checklist BSO s environmental management plans were systematically reviewed during the site inspection and subsequent document review. These reviewed BSO environmental management plans included: Mining Operations Plan; Environmental Management Strategy; Archaeology and Cultural Management Plan; Bulga Coal Complex Flora and Fauna Management Plan; Site Water Management Plan; Dust Management Plan; Blast Management Plan; Rehabilitation and Offset Management Plan; Final Void Management Plan; Mine Closure Plan; Bulga CHPP Surge Dam Project Management Plan; Fine Rejects Management Plan; Waste Management Plan; and Bulga Coal Complex Noise Management Plan. Page 16

Report The environmental management plans reviewed contained sufficient detail to reflect the intent of specific MCoA conditions, were contemporary in nature and contained sufficient quality assurance controls to ensure the management plans were regularly reviewed and, where appropriate, revised. Michael Frankcombe (Rehabilitation Specialist), Neil Pennington (Acoustic Specialist) and Jason Watson (Air Quality Specialist) also reviewed the environmental management plans critical for the site. In addition to the compliance audit checklist assessment of management plans, Michael Frankcombe (Rehabilitation Specialist) undertook a detailed assessment of compliance for the Erosion and Sediment Control Plan. The results of this detailed Erosion and Sediment Control Plan review are provided in the following section below. An Erosion and Sediment Control Plan (ESCP) had been prepared for BSO. The ESCP was generic and provided limited technical direction for the planning and management of drainage, erosion and sediment control on site. Condition 4.1(a) of DA 41-03-99 requires the ESCP to be consistent with the requirements of Landcom s Managing Urban Stormwater: Soils and Construction manual. There are two relevant manuals. Managing Urban Storm Water Soils and Construction, Volume 1 is the overarching manual for erosion and sediment control management in NSW but it s focus is urban development and therefore much of document is not relevant for coal mining. Section 1 of Volume 1 refers to the various Volume 2 manuals that are supplements for Volume 1. The relevant Volume 2 for coal mining is Managing Urban Storm Water Soils and Construction, Volume2E Mines and Quarries. Chapter 3 of the Managing Urban Storm Water Soils and Construction, Volume 1 and Section 4.1 of Managing Urban Storm Water Soils and Construction, Volume2E Mines and Quarries requires the assessment of erosion and sediment constraints rainfall erosivity, flooding liability, topography, soils. The primary mechanism of soil erosion at Bulga is dispersion and while this is discussed briefly in Table 2, there is inadequate discussion of the management or mitigation of dispersive soils. It is recommended that ESCP be amended to address the requirements listed in Appendix C of Managing Urban Storm Water Soils and Construction, Volume 2E Mines and Quarries. 3.9 Regulatory Action Review of EPL No: 563 on the NSW EPA Public Register webpage did not identify any specific penalty notices for the BSO facility. It is understood that prosecution is pending for the 2011 tailings incident. The pending prosecution is for two offences, pollution of waters (S120) and failure to notify (S148), the first hearing is scheduled for February 2013. On the 30 May 2012 an over pressure exceedance was recorded at the Hedley Monitoring location. This over pressure exceedance breached BSO s MCoA 6.2(e) for DA 41-03-99. An incident report for over pressure exceedance, dated 14 June 2012, was prepared by BSO and submitted to DoP&I. BSO had purchased the Hedley property at the time of the exceedence, however the blast monitoring plan had not been revised to reflect this ownership. Page 17

Report DoP&I reviewed the data in the incident and decided no further action was to be taken. BSO were informed, in a letter dated 18 June 2012, that any future exceedance of the blast impact criteria would result in the consideration of further action in accordance with DoP&I s Compliance Policy. BSO have focused on the Blast Management issue and have not had an over pressure exceedance since the 30 May 2012 event. BSO s current diligence with Blast Management was demonstrated during the Independent Environmental Audit as a planned blast was postponed in response to elevated wind speed and inappropriate wind direction at the time of the planned blast. 3.10 Annual Reviews BSO prepares an Annual Environmental Management Reports, Hunter River Salinity Trading Scheme Reports and EPL Annual Returns. Review of these documents confirms they appear consistent, are contemporary in format and content. As identified in the checklist, while appendices to the AEMR s contain graphical representations of trends from groundwater parameters, the EAMR document itself would benefit from the inclusion of graphical trend diagrams illustrating changes to other parameters specifically air quality and noise. 3.11 Monitoring Results and Trends Review of 2009, 2010 and 2011 AEMR s has identified the following trends in relation to monitoring results. Where feasible, the results of comparing monitoring data with predictions contained within EA or subsequent modification documents are also detailed in this section. 3.11.1 Noise Noise related complaints dropped from 31 in 2009 to 22 in 2010 and 18 in 2011. This feedback from the community suggests a decrease in the general level of noise impacts. Noise complaints were generally spread geographically; no obvious high complainant area or region was identified during a review of complaints. As far as noise criterion events due to BSO being in excess of the noise criteria, there was one recorded during the winter of each year 2010 and 2011. The events were minor (not greater than 2 db above the criteria) and a management strategy was developed and implemented following the 2010 event. Due to the magnitude of the noise levels and the follow-up actions, these events were not formal exceedences of the noise criteria. On two occasions, the BSO monitoring recorded noise levels (predominantly from a neighbouring mine) in excess of the cumulative acquisition criterion. Review of 4th Quarter 2012 Environmental Noise Monitoring Report for Lewis property confirmed that monitoring results of 35, 37, 34 and 37 db L Aeq15min were less than the maximum of 43 db predicted in Table 5 and Figure 7 of the February 2010 Modification 5 - Noise Conditions Environmental Assessment. Page 18

Report 3.11.2 Blasting While the number of blasts have increased since 2009, the number of overpressure exceedences remain similar (2009 was one, 2010 was three and 2011 was two exceedences). However, percentage of total blasts exceeding the overpressure criterion in a 12-month period has not exceeded the allowable 5% in any year. The only blast vibration exceedence at BSO was in 2004. Review of monthly blast monitoring data on BSO webpage from July 2012 to Dec 2012 confirms that no exceedences of the blasting criteria have occurred in the second half of 2012. This reflects the recent Western Mining Limit Modification Environmental Assessment prediction that the blast design in accordance with the BSO Blast and Vibration Management Plan should prevent blast exceedences at BSO. 3.11.3 Surface water Since 2010 BSO has adopted new content format for the surface water sections of their AEMRs. Review of the 2010 and 2011 AEMRs has identified the following trends in relation to surface water: Annual overall EC has dropped slightly since 2010 (2010 was 2926 us/cm and 2011 was 2548 us/cm); and Annual overall Total Suspended Solids (TSS) have dropped significantly since 2010 (2010 was 52.8 mg/l and 2011 was 29.7 mg/l). 3.12 Community Complaints Review of 2009, 2010 and 2011 AEMR s has identified the following trends in relation to community complaints: Complaints have remained at similar levels for the past three years (2009 was 39, 2010 was 36 and 2011 was 44 complaints); Noise remains the significant issue of complaint for the past three years, though numbers of noise complaints have dropped from 2009 to 2011 (2009 was 31, 2010 was 22 and 2011 was 18 noise complaints); Other major complaint issues from 2009 to 2011 were dust, blasts, lighting and traffic; Of the 40 complainants from 2006 to 2011, eight were new stakeholders in 2011; Of the 40 complainants from 2006 to 2011, three stakeholders account for 43& or 67 of 157 complaints; Between 2010 and 2012 over 55% of complaints come from 7 people who had submitted at least five complaints. One complainant has submitted 17 complaints; and Complaints were generally spread geographically, no obvious high complainant area or region was identified. Page 19

Report 4 NON COMPLIANCES AND IMPROVEMENT OPPORTUNITIES The following section provides details of the nonconformances observed during the independent environmental audit and proposed recommendations to address these identified nonconformances. Nonconformances have been colour coded to reflect the level of potential environmental significance each nonconformance. High priority nonconformances issues with potential for significant environmental impacts are colour coded Red. Nonconformances issues with potential for low to moderate environmental impacts are colour coded Orange. Issues which are the result of administrative nonconformances are colour coded Blue. In summary, the 2012 independent environmental audit did not identify any high priority nonconformances issues with potential for significant environmental impacts, seven nonconformances issues with potential for low to moderate environmental impacts and 29 administrative nonconformances. 4.1 Noncompliances Noncompliances identified during the documentation review, interviews, and site inspection are documented in Table 4.1. Recommendations have been proposed to address each identified noncompliance. Table 4.1 Noncompliances and Proposed Recommendations Non Conformance (NC) CoA/EPL/Mining Lease Reference Non Compliance Issue Recommendation (R) NC001 MCoA Schedule 2 Condition 2.1(d) NC002 MCoA Schedule 2 Condition 3.1(a)(v) NC003 MCoA Schedule 2 Condition 3.2(b)(iv) NC004 MCoA Schedule 2 Condition 3.2(b)(vi) While the Vaux Pit MOP was accepted by the DRE, it was not established if the Vaux Pit MOP was forwarded to SSC and DoP DG While examples of environmental officers stopping operations in the event of an adverse environmental impact were observed, review of EMS did not identify written authority to stop operations Overall ecological and community objectives were not documented in the EMS Overall objectives and strategies to protect existing economic and agricultural productivity within the area affected by mining were not identified R001: BSO should forward a copy of the MOP to SSC and DRE. Include entry to forward MOP to SSC and DRE in CMO for next MOP revision R002: Authorisation for environmental officers to stop operations in the event of an adverse environmental impact should be documented in the EMS R003: Additional text should be provided in the EMS to reflect the overall ecological and community objectives for the project and refer to relevant EMPs R004: Additional text should be provided in the EMS to document the overall objectives and strategies to protect existing economic and Page 20

Report Non Conformance (NC) CoA/EPL/Mining Lease Reference Non Compliance Issue Recommendation (R) in the EMS agricultural productivity within the area affected by mining NC005 MCoA Schedule 2 Condition 3.2(c) NC006 MCoA Schedule 2 Condition 3.3(a) NC007 MCoA Schedule 2 Condition 3.4(a) NC008 MCoA Schedule 2 Condition 3.5(a) NC009 MCoA Schedule 2 Condition 3.5(c) NC010 MCoA Schedule 2 Condition 3.7(b) NC011 MCoA Schedule 2 Condition 4.1(c) NC012 MCoA Schedule 2 Condition 4.1(c) While the EMS was likely available on BSO s webpage within 14days, no documentation was available to confirm this at the time of the site inspection While BSO have revised the ACHMP and had it reviewed by OEH, the current draft is yet to be approved No documentation was available at the site inspection to confirm that consultation had occurred with SSC during the preparation of the FFMP While BSO have provided an appropriate offset property of requested scale, the mechanism for the future management of XCN s offset areas was not in place by the end of December 2010 The long term management of the BSO specific Condran property, and other XCN offset sites, is yet to be approved to the satisfaction of the DG and OEH Survey assessed the majority of existing lighting equipment as non-conforming to AS4282 and recommended replacement of lighting equipment with compliant alternatives While the water balance is reported in AEMR for each year, the SWMP does not contain specific reporting procedures The primary mechanism of soil erosion at Bulga is dispersion and while this is discussed briefly in Table 2, there is no discussion of the management or mitigation of dispersive soils. The ESCP is non-compliant with s.c.3 and s.c.4 of Appendix C of Managing Urban Storm Water Soils and Construction, Volume2E Mines and Quarries R005: BSO should advise agencies that EMS available on BSO webpage within 14 days of approval R006: BSO to focus on obtaining timely approval of the ACMP R007: BSO should include appropriate agency and SSC consultation prior to submission to DG of DoP&I R008: XCN should focus on the timely approval of the mechanism for future management of XCN s offset areas R008: XCN should focus on the timely approval of the mechanism for future management of XCN s offset areas R009: As lighting will be retrofitted progressively, prepare a schedule and submit to DoP&I detailing when compliant lighting equipment will be retrofitted, addressing the outcomes of the audit report R010: BSO should revise the SWMP to specify that Site Water Balance be include reporting in AEMR document R011: BSO should revise the ESCP to be consistent with the requirements of Landcom s Managing Urban Stormwater: Soils and Construction manual Page 21

Report Non Conformance (NC) CoA/EPL/Mining Lease Reference Non Compliance Issue Recommendation (R) NC013 MCoA Schedule 2 Condition 4.1(c) NC014 MCoA Schedule 2 Condition 4.1(c) NC015 MCoA Schedule 2 Condition 4.1(c) NC016 MCoA Schedule 2 Condition 4.1(c) NC017 MCoA Schedule 2 Condition 4.1(c) NC018 MCoA Schedule 2 Condition 4.1(c) NC019 MCoA Schedule 2 Condition 4.1(c) NC020 MCoA Schedule 2 Condition 4.1(c) NC021 MCoA Schedule 2 Condition 6.1.1(a) Section 4 and 5 of the ESCP describe measures to minimise soil erosion and the potential for transport of sediment downstream however they do not address dispersion which is the primary erosion and sedimentation mechanism at Bulga. Proposed flow velocities for diversion banks and drains of 1.5m/s exceed the maximum permissible velocity of dispersive soils which is 0.3m/s (IECA 2008) Section 5 of the ESCP broadly describes erosion control domains but does provide the capacity of erosion and sediment control structures Section 6 of the ESCP describes generic inspection and maintenance measures that will maintain the structures over time however there is no detail on the maintenance of sediment basins/dams to ensure the design storm is captured, treated and discharged within a 5 day period No impact assessment criteria for stream health was identified in the SWMP No stream health or channel stability monitoring program was identified in the SWMP No program to monitor any impacts on private water users and water levels in privately-owned farm dams was identified in the SWMP Reporting procedures for the results of the groundwater monitoring program could not be identified in the SWMP during the site inspection No stream health responses were identified in the SWMP There is a discrepancy between the adopted deposited dust criteria between AEMRs R012: BSO should revise the ESCP to address dispersion which is the primary erosion and sedimentation mechanism at BSO R013: BSO should revise the ESCP to provide the capacity of erosion and sediment control structures R014: BSO should revise the ESCP to include details on the maintenance of sediment basins/dams to ensure the design storm is captured, treated and discharged within a 5 day period R015: BSO should revise the SWMP to include stream health impact assessment criteria R016: BSO should revise the SWMP to include stream health and channel stability monitoring program R017: BSO should revise the SWMP to include a program to monitor any impacts on private water users and water levels in privately owned farm dams R018: BSO should revise the SWMP to include reporting the results of the groundwater monitoring program in AEMRs R019: BSO should revise the SWMP to include stream health responses R020: Future AEMRs should be consistent with the criteria detailed in the DMP Page 22

Report Non Conformance (NC) CoA/EPL/Mining Lease Reference Non Compliance Issue Recommendation (R) NC022 MCoA Schedule 2 Condition 6.1.1(a) NC023 MCoA Schedule 2 Condition 6.1.1(a) NC024 MCoA Schedule 2 Condition 6.1.1(a) NC025 MCoA Schedule 2 Condition 6.1.1(a) NC026 MCoA Schedule 2 Condition 6.1.1(a) NC027 MCoA Schedule 2 Condition 6.1.1(a) NC028 MCoA Schedule 2 Condition 6.2(e)(ii) NC029 MCoA Schedule 2 Condition 6.3.8(b) NC030 MCoA Schedule 2 Condition 8.2 NC031 MCoA Schedule 2 Condition 9.1(a)(vii) Section 7.2 of the DMP does not specify any procedures for the dust monitoring program for the purpose of undertaking independent dust investigations Section 7.2 of the DMP does not specify any procedure to notify property owners and occupiers likely to be affected by dust from the mine Longer term strategies directed towards mitigating dust levels that exceed the OEH target dust criteria could not be identified in the DMP There was no reference to baseline monitoring program identified in the DMP Review of AEMR documentation identified exceedences of air quality criteria at monitoring points H1b There is no documented evidence that a specific investigation has been undertaken to understand the exceedences at E1 Measured overpressure blast exceedance of the 120 db (Lin Peak) noise level on 4 April 2009 and 3 November 2009 as reported to NSW EPA The NMP does not provide a response protocol and contingency plan for action when noise levels are nearing or exceeding the cumulative assessment criteria No documentation related to the approval of the quality assurance/quality control plan was available during the site inspection The AEMR does not identify all trends in the monitoring results over the life of the development R021: Develop and document procedures for the dust monitoring program for the purpose of undertaking independent dust investigations R022: Develop and document procedures to notify property owners and occupiers likely to be affected by dust from the mine R023: Document longer term strategies directed towards mitigating dust levels that exceed the OEH target dust criteria R024: Continue the baseline monitoring program undertaken prior to development consent R025: Further investigations should be undertaken for H1b R026: Further investigation should be undertaken to determine the source and if internal or external activates in the area can be modified to reduce dust emissions at E1 R027: Continue to monitor and implement the BVMP R028: BSO and Mt Thorley Warkworth should consider developing a cumulative noise monitoring/management strategy to formalise the response protocol and contingency plans in relation to cumulative noise R029: BSO should seek approval from the relevant regulatory agencies upon submission of revised PMQP R030: BSO should include more monitoring result trends (possibly graphical) in the AEMR over the life Page 23

Report Non Conformance (NC) CoA/EPL/Mining Lease Reference Non Compliance Issue Recommendation (R) of the development NC032 MCoA Schedule 2 Condition 10.1(a)(ii) NC033 MCoA Schedule 2 Condition 12.1(b) NC034 MCoA Schedule 2 Condition 12.1(c) Some ambiguity exists on whose responsibility it is at BSO to issue six monthly report of complaints to agencies BSO have constructed the XRail facility and Igloos located at the Area Workshop and Main Workshop without construction certificates BSO are occupying the XRail facility and Igloos located at the Area Workshop and Main Workshop without occupation certificates R031: BSO should revise position descriptions and responsibilities within the EMS to allocated six monthly complaints reporting by the BSO Environmental Manager R032: BSO should obtain construction certificates for the XRail facility and Igloos R033: As required, BSO should obtain occupation certificates for the XRail facility and Igloos NC035 EPL Condition A2.1 The exploration and mining lease details do not reflect those held by the Bulga Complex as some leases have been relinquished R034: It is recommended that BSO prepare a License Variation to reflect the remaining mining leases held at the facility NC036 ML No: 1547 Condition 2(4) The MOP contains plans which illustrate disposal of tailings/waste in Deep Pit but did not contain details of the old tailings dam R035: BSO should update the MOP to reflect all water management systems on site (including the old tailings dam) 4.2 Improvement Opportunities In addition to the noncompliance recommendations provided in this report, the independent environmental auditor recommended the following opportunities to be considered for implementation to improve the environmental performance of the development, and/or any strategy/plan/program required under their approval. Improvement opportunities, not specifically relating to identified noncompliances, have been provided in Table 4.2 to assist BSO improve overall environmental performance at the site. Table 4.2 Improvement Opportunities 2012 Audit Observation Improvement Opportunities Approval date on the footer of management plans on BSO webpage is ambiguous. R036: BSO to aligned version dates on management plan to allow accurate referencing of documents It was not readily apparent if this date was the date of agency approval, date on which the plan was implemented by BSO or the date on which the management plan was uploaded into the Sharepoint Software system While prepared in accordance with the MCoA, the current format of the LMP makes it difficult to differentiate between, R037: BSO should consider revising LMP section headers or footers to better differentiate each LMP, MCP, ROMP and Page 24

Report 2012 Audit Observation Improvement Opportunities and reference, individual LMP, MCP, ROMP and FVMP sections within the LMP document While MCoA specify that management plans are to be revised/updated at least every 5 years, the changing nature of BSO operations and legislative environment. FVMP management plan R038: BSO should consider increasing the review/update frequency of all environmental management plans to every two or three years The ACHMP was being revised for the first time in eleven years at the time of the site inspection BSO standardised format for management plans does not contain information of consultation, or history of how the management plan was revised, or the process for revision, consultation and approval for the next revision While Sections 4, 5, 9, 10, 11 and 13 of the ROMP contain specify short, medium, and long term measures to be implemented to rehabilitate the site, manage the remnant vegetation and habitat on the site and implement the vegetation offsets, the measures are not obvious within the document As identified in the checklist, while appendices to the AEMR s contain graphical representations of trends for groundwater parameters, the EAMR document does not The acoustic specialist identified a number of anomalies related to vertical temperature gradient strengths and their allocation in relation to schemes described in Appendix E of the INP R039: BSO should consider inserting an additional section to their standardised format for management plans to provides preparation, consultation and review/revision methodology R040: BSO should revise the ROMP with specific section headings to make the short, medium, and long term measures to be implemented much clearer R030: BSO should include more monitoring result trends (possibly graphical) in the AEMR over the life of the development R041: BSO should consider conducting a site-specific inversion study to quantify the 90th percentile nocturnal inversion strength at BSO, with a view to replacing the current default value of 4 0 C/100m R042: The methodology currently used to determine vertical temperature gradient (VTG) needs to be fully explained (with appropriate references) in either the noise monitoring reports or within the NMP While review of BSO s CMO compliance software database and its contents identified a number of commitments contained within the text of the EA and subsequent modification documents, it was not confirmed that all commitments were captured R043: BSO should undertake a systematic review of the original Environmental Assessment and documents supporting subsequent modifications to confirm that all commitments are loaded into the CMO compliance software database prior to the next Page 25

Report 5 CONCLUSION The quality and scope of the site s Environmental Management Strategy and Environmental Management Plans, and the attitude of the BSO environmental staff and management, illustrate BSO s commitment to maintaining a high level of compliance, community consultation and environmental performance. The Environmental Management Strategy and Environmental Management Plans for the BSO site have generally been developed to comply with the requirements of approvals reviewed. The recommendations provided in this report will assist BSO further improve compliance with their approval requirements. Page 26

Report Appendix A Audit Checklist

BULGA SURFACE OPERATIONS Table 1 Bulga Surface Operations Ministers Conditions of Consent Red Type Represents February 2001 Modification Blue Type Represents January 2008 Modification Green Type Represents October 2008 Modification Purple Type Represents November 2009 Modification Brown Type Represents May 2010 Modification Pink Type Represents July 2011 Modification Application No. DA_41-03-99 Condition Subject Documentation reviewed Audit findings/recommendations /noncompliant Application No. DA_41-03-99 Conditions of Consent Schedule 2 1 General - - - 1.1 There is an obligation on the Applicant to prevent and minimise harm to the environment throughout the life of the project. This requires that all practicable measures be taken to prevent and minimise harm that may result from construction, operation and, where relevant, decommissioning activities related to the development. Site Inspection Practicable measures to prevent and minimise harm to the environment have been implemented except where documented in this Checklist and Report. Real time monitoring observed during site inspection illustrated BSO s commitment to minimise harm to the environment throughout the life of the project. CMO Compliance software updated to include all approvals, management plans. This software provides advice on actions required and schedules. Internal independent audit undertaken to gauge compliance 1.2 Adherence to Terms of DA, EIS, etc - - - 1.2(a) The development is to be carried out generally in accordance with DA 41-03-99 and: DA 41-03-99 Consolidated Development Consent Conditions The development has been conducted generally in accordance with DA 41-03-99 except where noted in this Checklist and Report 1.2(a)(i) The EIS titled Bulga Open Cut Continued Mining dated February 1999 (two volumes), prepared by ERM Mitchell McCotter Pty Limited in accordance with clause 54A and 55 of Bulga Open Cut Continued Mining EIS The development has been conducted generally in accordance with the EIS except where noted in this Checklist and Report

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed the Environmental Planning and Assessment Regulations 1998, and certified in accordance with Section 78(A)8 of the Environmental Planning and Assessment Act 1979, and other relevant information included in Noise Information provided to DUAP on 24 June 1999, Air Quality Information provided to DUAP on 30 June 1999, and Aboriginal Heritage Information provided to DUAP on 20 July 1999 Audit findings/recommendations /noncompliant 1.2(a)(ii) Bulga Coal Project Environmental Impact Statement, February 1990 Bulga Coal Project Environmental Impact Statement The development has been conducted generally in accordance with the EIS except where noted in this Checklist and Report 1.2(a)(iii) Bulga Coal Project Variation to Development Consent, 28 October 1994 DA 41-03-99 Consolidated Development Consent Conditions The development has been conducted generally in accordance with the Variation to Development Consent 1.2(a)(iv) Modification to Development Consent Bulga Coal Project, Proposal to Extend Overburden Dump, April 1995; DA 41-03-99 Consolidated Development Consent Conditions The development has been conducted generally in accordance with the Modification to Development Consent 1.2(a)(v) the modification application 41-03-99 MOD 2 and supporting information prepared by Umwelt Environmental Consultants and dated 21 November; and DA 41-03-99 Consolidated Development Consent Conditions The development has been conducted generally in accordance with the Modification to Development Consent 1.2(a)(vi) the modification application 41-03-99 MOD 3 and supporting information prepared by Umwelt Environmental Consultants and dated 25 August 2008; DA 41-03-99 Consolidated Development Consent Conditions The development has been conducted generally in accordance with the Modification to Development Consent. The wash down bay and tyre change was located to a new position, however the dam was constructed under a subsequent expanded approval 1.2(a)(vii) the modification application 41-03-99 MOD 4 and Environmental Assessment prepared by Umwelt Environmental Consultants, dated August 2009, and the response to submissions dated October 2009; DA 41-03-99 Consolidated Development Consent Conditions The development has been conducted generally in accordance with the Modification to Development Consent

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed Audit findings/recommendations /noncompliant 1.2(a)(viii) the modification application 41-03-99 MOD 5 and Environmental Assessment prepared by Hansen Bailey Pty Limited, dated 15 February 2010; DA 41-03-99 Consolidated Development Consent Conditions The development has been conducted generally in accordance with the Modification to Development Consent 1.2(a)(ix) the document titled Bulga Coal Complex (Bulga Open Cut Mine) XRail Refueling Facility, dated February 2011; and DA 41-03-99 Consolidated Development Consent Conditions The development has been conducted generally in accordance with the Modification to Development Consent 1.2(a)(x) the conditions of this consent. DA 41-03-99 1.2(a) cont... 1.2(b) If there is any inconsistency between the above documents, the more recent document shall prevail over the former to the extent of the inconsistency. However, the conditions of this consent shall prevail over all such documents to the extent of any inconsistency. In accordance with section 80A(5) of the Environmental Planning and Assessment Act 1979 and clause 68 of the Environmental Planning and Assessment Regulation 1994, the Applicant shall surrender to the Minister, the development consent for the Saxonvale Coal Lease (CL224) issued by the then Minister for Planning and Environment to Dampier Mining Company Limited on 26 March 1981, and the development consent for the Bulga Mine on Coal Lease (CL372) issued by the Minister for Local Government and Planning on 21 December 1990, prior to the commencement of mining. Consolidated Development Consent Conditions The development has been conducted generally in accordance with DA 41-03-99 except where noted in this Checklist and Report - No inconstancies were identified - Verified during 2006 audit 1.2(c) If, at any time, the Director-General is aware of environmental impacts from the proposal that pose serious environmental concerns due to the failure of existing environmental management measures to ameliorate the impacts, the Director-General may order the Applicant to cease the activities causing those impacts until those concerns have been addressed to the satisfaction of the Director-General. - The DG has not ordered activities at BSO to cease Not Yet Enacted

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed Audit findings/recommendations /noncompliant 1.2(d) If any license conditions are breached the applicant shall comply with any modification to the work as specified by the relevant agency. Records of Notifications and follow-up Area Station 2010 - Notified DoP and other relevant agencies. Tailings Incident 2011 Notified DoP and other relevant agencies. Water Discharge - March 2011 Notified DoP and other relevant agencies. No direction to modify work were specified by the relevant agency 1.3 Period of approval/project commencement - - - 1.3(a) 1.3(b) 1.3(c) The approval for mining is from the commencement of this consent for the period of up to 21 years from the date of mine consolidation of the Saxonvale Coal Lease (CL224) and Bulga Coal Lease, or the expiry of the Saxonvale Coal Lease (CL372). At least one month prior to the commencement of mining, or within such period as agreed by the Director-General, the Applicant shall submit for the approval of the Director-General a compliance report detailing compliance with all relevant conditions that apply prior to the commencement of mining operations. Mining operations shall not commence until the report is approved by the Director-General. Date of commencement of mining is to be notified in writing to the Director-General and SSC, at least two weeks prior to commencement of mining. 1.4 Dispute resolution In the event that the Applicant and the SSC or a Government agency, other than the Department, cannot agree on the specification or requirements applicable under this consent, the matter shall be referred by either party to the Director- General or if not resolved, to the Minister, whose determination of the disagreement shall be final and binding on the parties. Mining Lease No.1547 Current approval is within 21 years of 1999 Bulga Open Cut Mine Consent Compliance Report October 2006 conducted for the period 1 July 2003 30th June 2006 by ERM Bulga Open Cut Mine Consent Compliance Report October 2006 Verified during previous 2006 audit Verified during previous 2006 audit - No matters have been referred to the DG 1.5 Security deposits Mining Lease No.1547 Letter accompanying mining lease from

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed Security deposits and bonds will be paid as required by DRE under mining lease approval conditions. Audit findings/recommendations Mineral Resources confirmed that the replacement security deposit was received by the Department on 3 May 2004. Security deposits now updated annually, copy of 2011 security deposit with bank observed during site inspection /noncompliant 1.6 Year 2000 Conformity One month prior to the commencement of operation of any automated system, including embedded systems used for operation, pollution control, monitoring and safety (including fire safety), the Applicant shall ensure that the system has been tested in accordance with the most recent edition of BSI/DISC PD2000-1 or equivalent standard to confirm continuous time and date functionality of that system. Bulga Open Cut Mine Consent Compliance Report October 2006 Verified during previous 2006 audit 2 Mine management - - - 2.1 Mine Management Plan, Operations and Methods - - - 2.1(a) The Applicant shall submit and have accepted by the Director- General of DRE, a Mining Operations Plan (MOP) in accordance with current guidelines issued by DRE, as an extension of the MOP prepared for Bulga Open Cut Pit. The Plan is to cover mining operations for a period of up to seven years. Bulga Coal Surface Operations Mining Operation Plan Jan 2006 to Dec 2012 as amended and approved Vaux Pit MOP Letter from DRE dated 12th Dec 2011 The MOP and subsequent amendments have been accepted by the DG of DRE. MOP is periodically revised as required. DRE has approved the extension of the current MOP until December 2013 MOP Extension Letter from DPI dated 6 th June 2012 2.1(b) The MOP shall: - - - 2.1(b)(i) be prepared in accordance with DRE Guidelines for the Preparation of Mining Operations Plans (Document 08060002.GUI or its most recent version); Bulga Coal Surface Operations Mining Operation Plan Jan 2006 to Dec 2012 Bulga Coal Surface Operations Mining Operation Plan Jan 2006 to Dec 2012 was prepared in accordance with latest MOP guidelines. New MOP being prepped in accordance with

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed 2.1(b)(ii) 2.1(b)(iii) 2.1(b)(iv) 2.1(b)(v) demonstrate consistency with the conditions of this consent and any other statutory approvals; demonstrate consistency with the Environmental Management Plans for the project site; provide the basis for implementing mining operations, environmental management, and ongoing monitoring; and identify a schedule of proposed mine development for the period covered by the plan and include: the area proposed to be impacted by mining activity and resource recovery mining methods and remediation measures areas of environmental, heritage or archaeological sensitivity and mechanisms for appropriately minimising impact water management, and proposals to appropriately minimise surface impacts. Bulga Coal Surface Operations Mining Operation Plan Jan 2006 to Dec 2012 DA 41-03-99 Consolidated Development Consent Conditions EPL No: 563 Mining Lease No.1547 Bulga Coal Surface Operations Mining Operation Plan Jan 2006 to Dec 2012 Environmental Management Strategy Environmental Management Plans Bulga Coal Surface Operations Mining Operation Plan Jan 2006 to Dec 2012 Bulga Coal Surface Operations Mining Operation Plan Jan 2006 to Dec 2012 Audit findings/recommendations draft REMP guidelines The MOP has been prepared in accordance with DA 41-03-99, EPL 563 and ML 1547. Examples: dust and noise criteria identical, MOP generally refers directly to EPL and Development conditions/criteria Review of the Vaux Pit MOP modification confirmed it referred to BSO s relevant EMPs BSO s MOP provides the basis for implementing environmental management and ongoing monitoring for mining operations Schedule of Plans submitted with MOP. Plan 4 from Vaux Pit Reviewed and confirmed that a schedule was included for mining activity /noncompliant

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed 2.1(c) 2.1(d) In preparing the MOP, the Applicant shall consult with affected service authorities and make arrangements satisfactory to those authorities for the protection or relocation of those services. A copy of the MOP, excluding commercial in confidence information, shall be forwarded to SSC and Director-General within 14 days of acceptance by DRE. Audit findings/recommendations - Verified during previous 2006 audit. Original MOP Letter to SSC and DoP DG dated 6 September 2006 Bulga Coal advised that development since 2006 has not impacted services. The site inspection validated this statement The original BSO MOP was forwarded to relevant Authorities, SSC and DoP DG. While the Vaux Pit MOP was accepted by the DRE, it was not established if the Vaux Pit MOP was forwarded to SSC and DoP DG /noncompliant NC001 Administrative R001: BSO should forward a copy of the MOP to SSC and DRE. Include entry to forward MOP to SSC and DRE in CMO for next MOP revision 2.2 Limits on production AEMR 2009 2009 9.1 MTPA The production levels of coal for the Bulga Open Cut Mine from the consolidated Saxonvale Lease (CL224) and Bulga Lease (CL372) shall not exceed a maximum of 12.2 million tonnes per annum Run-of-Mine (ROM) coal. AEMR 2010 AEMR 2011 2010 8.6 MTPA 2011 10.0 MTPA Production does not exceed a maximum of 12.2MTPA 3 Land and site environmental management - - - 3.1 Appointment of Environmental Officer(s) - - - 3.1(a) The Applicant shall employ a suitably qualified Environmental Officer(s) throughout the life of the mine whose qualifications are acceptable to the Director-General. The Officer(s) will: Letter from BSO to DoP&I dated 8 June 2010 Letter to DoP&I dated 8 June 2010 documents the appointment of the Environment and Community Superintendent for Bulga Coal. Qualifications are stated in the letter. Superintendent recently promoted to Manager but still holds officer status with DoP&I 3.1(a)(i) be responsible for the preparation of the Environmental Management Plans (refer condition 3.2); Environmental Management Strategy dated 6 June 2011 EMS specifies that Environmental Manager responsibilities include preparation of EMPs 3.1(a)(ii) be responsible for considering and advising on matters specified in the conditions of this consent and compliance with Environmental Management Strategy Environmental Manager responsibilities include provision of environmental advice and

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed Audit findings/recommendations such matters; dated 6 June 2011 monitoring compliance /noncompliant 3.1(a)(iii) be responsible for receiving and responding to complaints in accordance with condition 10.1; Environmental Management Strategy dated 6 June 2011 Environmental Manager responsibilities includes communicating with neighbours and regulators and assisting with investigations for environmental incidents and complaints 3.1(a)(iv) facilitate an induction and training program for all persons involved with construction activities, mining and remedial activities; and Environmental Management Strategy dated 6 June 2011 Induction Presentation with Environmental Component dated Sept 2011 When available, the Environmental Officer facilitates the environmental management component of the employee induction program. Employees are required to complete a Competency Evaluation of the environmental component of the induction Bulga Environment and Community Training Competency Evaluation dated Sept 2011 3.1(a)(v) have the authority and independence to require reasonable steps to be taken to avoid or minimise unintended or adverse environmental impacts and failing the effectiveness of such steps, to stop work immediately if an adverse impact on the environment is likely to occur. Environmental Management Strategy dated 6 June 2011 Various examples of where the Environmental Officer (or representative) has stopped work and implemented changes during operations were noted during the site inspection. On 5 December 2012 the planned blast was stopped due to prevailing wind direction and speed. While examples of environmental officers stopping operations in the event of an adverse environmental impact were observed, review of EMS did not identify written authority to stop operations NC002 Administrative R002: Authorisation for environmental officers to stop operations in the event of an adverse environmental impact should be documented in the EMS 3.1(b) The Applicant shall notify the Director-General, DRE, OEH, NOW, SSC and the CCC of the name and contact details of the Environmental Officer(s) upon appointment and any changes to the appointment(s). Letters from BSO to various agencies dated 8 June 2010 BSO has notified the Director-General, DRE, OEH, NOW, SSC and the CCC of the name and contact details of the current Environmental Officer 3.2 Environmental management strategies and plans - - -

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed Audit findings/recommendations /noncompliant 3.2(a) The Applicant shall prepare an Environmental Management Strategy providing a strategic context for the environmental management plans [refer condition 3.2d)]. The Environmental Management Strategy shall be prepared in consultation with the relevant authorities and the CCC (refer condition 10) and to the satisfaction of the Director-General, prior to submission of any of the environmental management plans. Environmental Management Strategy dated 6 June 2011 Letters from BSO to all parties dated 2 August 2011 Letters requesting review and comment within 30 days were forwarded to agencies. No comments were provided by agencies 3.2(b) The Environmental Management Strategy shall include: - - - 3.2(b)(i) statutory and other obligations which the Applicant is required to fulfill during mining, including all approvals and consultations and agreements required from authorities and other stakeholders, and key legislation and policies Environmental Management Strategy dated 6 June 2011 Statutory and legal obligations are documented. Table 10 of the EMS illustrates were relevant sections of the EMS address statutory and other obligations 3.2(b)(ii) definition of the role, responsibility, authority, accountability and reporting of personnel relevant to environmental management, including the Environmental Officer(s) Environmental Management Strategy dated 6 June 2011 Section 8 Accountabilities of the EMS define the roles and responsibilities of personnel relevant to environmental management 3.2(b)(iii) overall environmental management objectives and performance outcomes, during mining and decommissioning of the mine, for each of the key environmental elements for which environmental management plans are required under this consent Environmental Management Strategy dated 6 June 2011 Overall environmental management objectives and performance outcomes are documented in the EMS. Specific objectives and performance targets are documented in the Management Plans 3.2(b)(iv) overall ecological and community objectives for the project and a strategy for the restoration and management of the area affected by mining operations Environmental Management Strategy dated 6 June 2011 A framework for the restoration and management of the area affected by mining operations was provided in the EMS, however overall ecological and community objectives were not documented. Specific ecological and community objectives for the project are documented in individual management plans NC003 Administrative R003: Additional text should be provided in the EMS to reflect the overall ecological and community objectives for the project and refer to relevant EMPs 3.2(b)(v) identification of cumulative environmental impacts and Environmental Section 5.5 of the EMS documents cumulative

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed 3.2(b)(vi) 3.2(b)(vii) 3.2(b)(viii) 3.2(b)(ix) 3.2(c) procedures for dealing with these at each stage of the development overall objectives and strategies to protect existing economic productivity within the area affected by mining, including agricultural productivity and other businesses steps to be taken to ensure that all approvals, plans, and procedures are being complied with processes for conflict resolution in relation to the environmental management of the project; and documentation of the results of consultations undertaken in the development of the Environmental Management Strategy. The Applicant shall make copies of the Environmental Management Strategy available to SSC,OEH, NOW, DRE, and the CCC within fourteen days of approval by the Director- General. Management Strategy dated 6 June 2011 Environmental Management Strategy dated 6 June 2011 Environmental Management Strategy dated 6 June 2011 Environmental Management Strategy dated 6 June 2011 Environmental Management Strategy dated 6 June 2011 BSO Website Audit findings/recommendations environmental impacts and procedures for dealing with these impacts Overall objectives and strategies to protect existing economic and agricultural productivity within the area affected by mining were not identified in the EMS. Specific objectives and strategies to protect existing economic and agricultural productivity within the area affected by mining are documented in individual management plans Section 4.12 Legal and Other Requirements of the EMS documents steps to ensure that all approvals, plans, and procedures are being complied with Section 5.10 Conflict Resolution of the EMS documents processes for conflict resolution in relation to the environmental management of the project Appendix 3 of the EMS provides documentation of the consultation letters circulated during the development of the Environmental Management Strategy While the EMS was likely available on BSO s webpage within 14 days, no documentation was available to confirm this at the time of the site inspection /noncompliant NC004 Administrative R004: Additional text should be provided in the EMS to document the overall objectives and strategies to protect existing economic and agricultural productivity within the area affected by mining NC005 Administrative R005: BSO should advise agencies that EMS available on BSO webpage within 14 days

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed 3.2(d) 3.2(e) The Applicant shall prepare the following Environmental Management Plans: Archaeology and Cultural Management Plan (refer condition 3.3) Flora and Fauna Management Plan (refer condition 3.4) Landscape Management Plan (refer condition 3.6) Site Water Management Plan (refer condition 4.1(a)) Dust Management Plan (refer condition 6.1.1(a)) Blast and Vibration Management Plan (refer condition 6.2(a)) Noise Management Plan (refer condition 6.3.2(a)). Note: With the approval of the Director-General, the Applicant may integrate any management plan or monitoring program required by this consent with any similar plan or program for the Bulga Complex. The management plans are to be revised/updated at least every 5 years or as otherwise directed by the Director-General in consultation with the relevant government agencies. The management plans are also to be revised/updated after each modification to this consent, wherever appropriate. Changes shall be made and approved in the same manner as the initial environmental management plan. The plans shall also be made publicly available at SSC within two weeks of approval of the relevant government authority. Note: The reason for condition (e) is to reflect changing environmental requirements or changes in technology/operational changes that may affect or be introduced to maintain the approved operations. 3.3 Heritage assessment and management 3.3(a) Aboriginal cultural heritage The Applicant shall prepare an Archaeology and Cultural Management Plan to address Aboriginal and European cultural heritage issues. The Plan shall be prepared in ACHMP F&FMP LMP SWMP DMP BVMP NMP BSO letter to SSC dated13 Nov 2012 BSO letter to SSC dated 23 Oct 2012 ACHMP March 2001 Draft ACHMP dated 2012 Letter from BSO to Audit findings/recommendations BSO has prepared various revisions of each of these Environmental Management Plans as the BSO facility has developed. Each of these management plans are discussed individually in the following conditions Generally the BSO Environmental Management Plans have been revised/updated at least every 5 years. The recent July 2011 Modification has seen a number of the management plans revised and resubmitted to DoP&I. Letters illustrate that Management Plans are generally made publicly available at SSC within two weeks of approval by the relevant government authority and are available on BSO s website The approved ACHMP for the Bulga Mine was prepared in 2001. A draft Archaeology and Cultural Management Plan 2012 has been developed since 2010 to /noncompliant of approval NC006 R006: BSO to focus on the timely approval of the

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed consultation with any registered Aboriginal stakeholders and OEH, and to the satisfaction of the Director-General prior to the commencement of mining operations. The Plan shall include but not be limited to: Aboriginal Stakeholders dated 31 Oct 2012 Letter from BSO to OEH dated 31 Oct 2012 3.3(a)(i) identification of all areas of conservation within the DA area Draft ACHMP dated 2012 3.3(a)(ii) 3.3(a)(iii) 3.3(a)(iv) 3.3(a)(v) 3.3(a)(vi) provision of management strategies for all parts of the DA area not affected by mining identification and monitoring of future salvage, excavation, and any heritage/archaeological sites within the DA area, prior to and during development the proposed program for collection of artefacts prior to commencement of mining in the area including the waste emplacement area measures to protect and preserve the undisturbed deposits in Area 2 as identified in Figure 12.3 of the EIS; and Measures to manage the discovery of any previously unidentified Aboriginal objects or skeletal remains during the life of the Draft ACHMP dated 2012 Draft ACHMP dated 2012 Draft ACHMP dated 2012 Draft ACHMP dated 2012 Draft ACHMP dated 2012 Audit findings/recommendations replace the 2001 Archaeology and Cultural Heritage Management Plan. In July 2011 meeting was held to discuss the ACHMP. May 2012 there was a two day workshop with stakeholders. OEH was consulted on 31 Oct 2012. While BSO have revised the ACHMP and had it reviewed by OEH, the current draft is yet to be approved Figure 6 of the draft ACHMP describes how all conservation areas are identified, fenced and signposted and this is discussed during the environmental induction Section 9.2 of the draft ACHMP provides a management strategy via use of the Ground Disturbance Permit process Figure 2 of the draft ACHMP describes the Aboriginal Heritage Management process, detailing as required the need for Section 90 AHIPs Artefacts that were located in mining and waste emplacement areas were salvaged under previous AHIPs. No artefacts need to be collected mining in the area including the waste emplacement area Section 8.3 of the draft ACHMP documents the restrictions to access to Area 2 (adjacent to Swan Lake). Ground Disturbance Permit process prohibits excavation in this area Figure 1 of the draft ACHMP describes the Aboriginal Heritage Management process /noncompliant ACMP

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed development; and 3.3(a)(vii) 3.3(b) 3.3(c) 3.3(d) 3.3(e) details of measures to assist the Aboriginal community to maintain and manage cultural heritage in the DA area. Within six months of the commencement of Mining Operations, the Applicant shall make a $50,000 contribution towards the establishment of a trust fund set up by the Department through the Public Trustee. The funds are to be used for a regional study of Aboriginal sites and other cultural heritage projects agreed to by the Wonnarua Tribal Council. If, during the course of construction of any surface facilities or mining activities, the Applicant becomes aware of any heritage or archaeological material not previously identified, all work likely to affect the material shall cease immediately and the relevant authorities consulted about an appropriate course of action prior to recommencement of work. The relevant authorities may include OEH, the NSW Heritage Office, and the relevant the local Aboriginal community. Any necessary permits or consents shall be obtained and complied with prior to recommencement of work. 1 The Applicant shall ensure that archaeologically sensitive in situ deposits in Area 2 as identified in Figure 12.3 of the Bulga Open Cut Continued Mining EIS, February 1999, will not be disturbed by mining works. 1 General terms of approval from OEH 2 The Applicant shall invite the Wonnarua Tribal Council and the Wanaruah Aboriginal Land Council to collect the artefacts in Area 1 prior to mining commencing in the development Draft ACHMP dated 2012 Letter from DoP dated 13 August 2001 Audit findings/recommendations including the discovery of any previously unidentified Aboriginal objects. Section 9.3 of the draft ACHMP documents the process when skeletal remains are identified Section 9.5 of the draft ACHMP documents annual consultation undertaken on conservation areas and zones. BSO are engaging the Aboriginal community to finalise the location Teaching Place Verified in previous 2006 independent audit and letter dated 13/8/01. - No artefacts identified during construction works or mining activity Draft ACHMP dated 2012 2006 independent audit report Section 8.3 of the draft ACHMP documents the restrictions to access to Area 2 (adjacent to Swan Lake). Ground Disturbance Permit process prohibits excavation in this area Verified during previous 2006 audit /noncompliant Not Applicable

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed area. 2 General terms of approval from OEH Audit findings/recommendations /noncompliant 3.3(f) 3.3(g) 3.3(h) The Applicant shall continue to preserve the site of the axe grinding grooves in accordance with relevant recommendations set out in the EIS (1990) and the requirements of the Director of OEH and provide a buffer zone and protective fence around the site in accordance with the requirements of the Director of OEH. The Applicant shall take all practicable steps to ensure that the building known as Mount Leonard is not damaged by blasting arising from the development. The Applicant is to consult with the Aboriginal community regarding any approvals that are sought under Part 6 of the National Parks and Wildlife Act 1974 using consultation principles and strategies consistent with those outlined in the OEH Aboriginal Cultural Heritage Consultation Requirements for Proponents (2010). The results of these consultations shall be documented in the AEMR. Notes: 1. No Aboriginal archaeological sites, that have been identified, shall be destroyed without the approval of the Director-General of OEH, under section 90 of the National Parks and Wildlife Act 1974, prior to any disturbance of the identified sites by mining operations. 2. Wherever possible, the Applicant is to contract representatives of the Wonnarua Tribal Council to assist in the proposed archaeological investigations and to undertake salvage of artefacts. Draft ACHMP dated 2012 Site inspection Blast Management Plan Revision 0.1 Letter from DoP&I dated 7 November 2012 AEMR 2009 AEMR 2010 AEMR 2011 Section 8.3 and 9.5 of the draft ACHMP documents the preservation of the axe grinding grooves in accordance with relevant recommendations set out in the EIS. Confirmed by site staff as preserved and fenced off during site inspection Section 3.7.1 of the BMP confirms that the Mount Leonard building is outside the active mining area and there is no blasting in this area. Mount Leonard will be inspected annually 2009 AEMR Section 4.14 2010 AEMR Section 3.12 2011 AEMR Section 3.12 These sections of each AEMR provide a summary of Aboriginal and Stakeholder and Agency Consultation undertaken 3.4 Flora and Fauna Assessment and Methodology - - - 3.4(a) The Applicant shall prior to commencement of mining, prepare and implement a Flora and Fauna Management Plan for the Bulga Coal Complex Flora and Fauna Consultation with OEH during the preparation of the FFMP is documented. NC007

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed management of flora and fauna issues for the DA area. The Plan shall be prepared in consultation with OEH and SSC, and to the satisfaction of the Director-General, and shall include but not be limited to: Management Plan 19 April 2012 Letter from DoP&I dated 3 October 2012 Audit findings/recommendations No documentation was available at the site inspection to confirm that consultation had occurred with SSC during the preparation of the FFMP. FFMP approved by DoP&I in October 2012 /noncompliant R007: BSO should include appropriate agency and SSC consultation prior to submission to DG of DoP&I 3.4(a)(i) a detailed assessment of the current characteristics and ecological values of existing ecosystems likely to be affected by the development; FFMP dated 19 April 2012 Section 5.1 of the FFMP details the current characteristics and ecological values of existing ecosystems likely to be affected by the development 3.4(a)(ii) strategies to minimise the net loss of ecologically significant vegetation communities within the DA area as a result of the development, including the provision of compensatory areas of equivalent ecological and habitat value where necessary FFMP dated 19 April 2012 Section 5.21 of the FFMP provides strategies associated with the clearing of native vegetation at BSO. Section 5.23 of the FFMP provides strategies for the establishment of flora and fauna corridors 3.4(a)(iii) strategies to manage the impact of surface water runoff, erosion and sediment control measures on flora and fauna, and also the impact of heavy machinery FFMP dated 19 April 2012 Section 5.29 of the FFMP provides surface water runoff, erosion and sediment control measures on flora and fauna. Section 5.214 of the FFMP provides strategies to minimise the impact of heavy machinery 3.4(a)(iv) details of monitoring the mine s impacts on native vegetation are to be reported in the Annual Environmental Management Report. FFMP dated 19 April 2012 AEMR 2009 AEMR 2010 AEMR 2011 Section 6 of the FFMP confirms monitoring of the mine s impacts on native vegetation are to be reported in the Annual Environmental Management Report Section 3.10 of the 2011 AEMR reported details of monitoring the mine s impacts on native vegetation 3.5 Vegetation Offsets By the end of December 2010, the Applicant shall: - This Condition commenced in November 2009 and did not require implementation until December 2010-3.5(a) incorporate an offset of at least 20 hectares of existing Hunter Box Ironbark Woodland into other conservation areas Letter from BSO to DOP, DRE and OEH BSO proposed to utilise the Condran property as an offset in Oct 2011. NC008 Administrative

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed managed by Xstrata Coal Pty Limited; dated 4 October 2011 3.5(b) 3.5(c) rehabilitate at least 1 hectare of remnant Forest Red Gum Woodland on the drainage lines within the catchment of Nine Mile Creek; and make suitable arrangements to protect and manage these offset areas in the long-term, Letter from OEH dated 23 Nov 2011 Letter from OEH dated 19 July 2012 Capital Expenditure Budget 2013 Landscape Management Plan dated Sept 2011 Letter from XCN dated 18 Oct 2011 Audit findings/recommendations OEH requested additional area to comply with consent condition Nov 2011. OEH agreed to 50 hectare package July 2012. Baseline assessment and capital expenditure for 2013 for the Condran property reviewed at time of site inspection. While BSO have provided an appropriate offset property of requested scale, the mechanism for the future management of XCN s offset areas was not in place by the end of December 2010 Section 9 and Figure 4 of the LMP documented the rehabilitation of 3 hectares of remnant Forest Red Gum Woodland in 2010 of which 1.9hectares is fenced. Site inspection confirmed remnant Forest Red Gum Woodland observed as demarcated on the drainage lines within the catchment of Nine Mile Creek XCN is seeking to confirm its approach to all of its offset properties with OEH. The letter of October 2011 seeks an extension of time for 6 months to resolve this issue at a corporate level. While both BSO and XCN are making significant arrangements to protect and manage these offset areas in the long-term, the required arrangements were not in place by the end of December 2010 to the satisfaction of the Director-General and OEH. - The long term management of the BSO specific Condran property, and other XCN offset sites, is yet to be approved to the satisfaction of the DG and OEH /noncompliant R008: XCN should focus on the timely approval of the mechanism for future management of XCN s offset areas NC009 R008: XCN should focus on the timely approval of the mechanism for future management of XCN s offset areas See above NC009

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed Audit findings/recommendations 3.6 Landscape Management Plan - - - /noncompliant 3.6(a) The Applicant shall prepare and implement a detailed Landscape Management Plan for the development to the satisfaction of the DRE and Director-General. This plan must: Landscape Management Plan dated Sept 2011 - - 3.6(a)(i) be prepared in consultation with OEH, NOW and SSC by suitably qualified expert/s whose appointment/s have been approved by the Director-General; Letter from BSO to agencies dated 25 June 2010 Letter from D0P&I dated 1 March 2010 Letter from BSO dated 25 June 2010 demonstrates consultation with OEH, NOW and SSC. Only NOW responded via letter 6 August 2010. Letter from DoP&I confirmed DG approval of by suitably qualified expert/s 3.6(a)(ii) be submitted to the Director-General for approval by the end of December 2010; and Letter from BSO dated 8 December 2010. LMP submitted to DG on 4 October 2011 Letter of extension from DoP&I dated 14 December 2010. Letter from BSO with final LMP dated 4 October 2011 3.6(a)(iii) include a: Rehabilitation and Offset Management Plan; Final Void Management Plan; and Landscape Management Plan dated Sept 2011 The LMP includes a Rehabilitation and Offset Management Plan, Final Void Management Plan; and Mine Closure Plan Mine Closure Plan. 3.6(b) Rehabilitation and Offset Management The Rehabilitation Management Plan must include: Rehabilitation and Offset Management Plan dated Sept 2011 - - 3.6(b)(i) the objectives for rehabilitation of the site and vegetation offsets; Rehabilitation and Offset Management Plan dated Sept 2011 Section 3 of the ROMP addresses the objectives for rehabilitation of the site and vegetation offsets 3.6(b)(ii) a description of the short, medium, and long term measures that would be implemented to rehabilitate the site, manage the remnant vegetation and habitat on the site and implement the Rehabilitation and Offset Management Plan dated Sept 2011 While Sections 4, 5, 9, 10, 11 and 13 of the ROMP contain specify short, medium, and long term measures to be implemented to rehabilitate the site, manage the remnant

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed 3.6(b)(iii) 3.6(b)(iv) 3.6(b)(v) 3.6(b)(vi) 3.6(b)(vii) vegetation offsets; detailed performance and completion criteria for the rehabilitation of the site and implementation of the vegetation offsets; a detailed description of how the performance of the rehabilitation of the mine would be monitored over time in order to demonstrate achievement of the stated objectives; a detailed description of what measures would be implemented over the next 3 years, including for: minimising and rehabilitating disturbed areas; implementing vegetation offsets; protecting vegetation and soil outside the disturbance areas; undertaking pre-clearance surveys; managing impacts on fauna; landscaping the site to minimise visual impacts; conserving and reusing topsoil; collecting and propagating seed for rehabilitation works; salvaging and reusing material from the site for habitat enhancement; controlling weeds and feral pests; controlling access; and bushfire management; a program to monitor the effectiveness of these measures, and progress against the performance and completion criteria; a description of the potential risks to successful rehabilitation and/or revegetation, and a description of the contingency Rehabilitation and Offset Management Plan dated Sept 2011 Rehabilitation and Offset Management Plan dated Sept 2011 Rehabilitation and Offset Management Plan dated Sept 2011 Rehabilitation and Offset Management Plan dated Sept 2011 Landscape Management Plan Audit findings/recommendations vegetation and habitat on the site and implement the vegetation offsets, the measures are not obvious within the document Section 3 and Appendix 3 of the ROMP provide detailed performance and completion criteria for the rehabilitation of the site and implementation of the vegetation offsets Section 8.0 of the ROMP details how BSO propose to monitor performance of the rehabilitation over time in order to demonstrate achievement of the stated objectives Section 4.0, 9.0 and 10 of the ROMP detail land management practices to be implemented over the next 3 years. Section 13 of the ROMP provides measures for minimising visual impacts. Section 5.1.4 of the ROMP provides measures for the conserving and reuse of topsoil where appropriate Section 12.0 of the ROMP details the program to monitor the effectiveness of these measures, and progress against the performance and completion criteria Section 7.0 of the LMP describes the potential risks to successful rehabilitation and/or /noncompliant

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed measures that would be implemented to mitigate these risks; dated Sept 2011 and 3.6(b)(viii) 3.6(c) 3.6(c)(i) 3.6(c)(ii) 3.6(c)(iii) 3.6(d) details of who is responsible for monitoring, reviewing, and implementing the plan. Final Void Management The Final Void Management Plan must: incorporate design criteria and specifications for the final void based on verified groundwater modelling predictions and a reassessment of post-mining groundwater equilibration; assess the potential interactions between creeks on the site and the final void; and describe what actions and measures would be implemented to: minimise any potential adverse impacts associated with the final void; and manage and monitor the potential impacts of the final void. Mine Closure Plan The Mine Closure Plan Must: Landscape Management Plan dated Sept 2011 Final Void Management Plan dated Sept 2011 Final Void Management Plan dated Sept 2011n Final Void Management Plan dated Sept 2011 Final Void Management Plan dated Sept 2011 Mine Closure Plan dated Sept 2011 3.6(d)(i) define the objectives and criteria for mine closure; Mine Closure Plan dated Sept 2011 3.6(d)(ii) 3.6(d)(iii) investigate options for the future use of the site, including the final void/s; investigate ways to minimise the adverse socio-economic effects associated with mine closure, including reduction in local employment levels; Mine Closure Plan dated Sept 2011 Mine Closure Plan dated Sept 2011 Audit findings/recommendations vegetation, and a description of the contingency measures that would be implemented to mitigate these risks While Section 4.0 of the LMP details when the LMP is reviewed, Section 5.0 details who is responsible for monitoring, reviewing, and implementing the LMP - - Section 4.0 of the FVMP provides a design criteria and specifications for the final void Section 7.1 of the FVMP provides an assessment of the potential interactions between creeks on the site and the final void Section 8.0 of the FVMP describes monitoring to be implemented to manage and minimise potential impacts of the final void - - Section 2.0 of the MCP defines the objectives and criteria for mine closure Section 2.0 of the MCP lists the options considered for the future use of the site, including the final void Section 10.5 of the MCP details ways to minimise the adverse socio-economic effects associated with mine closure, including /noncompliant

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed 3.6(d)(iv) 3.6(d)(v) describe the measures that would be implemented to minimise or manage the ongoing environmental effects of the development; and describe how the performance of these measures would be monitored over time. 3.7 Visual Amenity The applicant shall: Mine Closure Plan dated Sept 2011 Mine Closure Plan dated Sept 2011 3.7(a) ensure no external lights shine above the horizontal; Presentation of General Environmental Awareness Training 3.7(b) ensure that all external lighting associated with the development complies with Australian Standard AS4282 (INT) 1995 Control of Obtrusive Effects of Outdoor Lighting, or its latest version, and Various emails to operation supervisors External Lighting Audit dated 15July 2010 Audit findings/recommendations reduction in local employment levels Section 7.0 of the MCP describes measures that would be implemented to minimise or manage the ongoing environmental effects of the development Section 5.0 of the MCP describes how the performance of these measures will be monitored over time This Condition commenced in November 2009 BSO s current General Environmental Awareness Presentation included a portion on direct lighting into work areas, away from local community Various emails to supervisory staff reinforcing the importance of no external lighting were observed during the site inspection. Anecdotal information of reinforcing this issue at daily (8:30am) production meeting Night time survey of external lighting was undertaken over two nights and one daytime survey. Survey assessed the majority of existing lighting equipment as non-conforming to AS4282 and recommended replacement of lighting equipment with compliant alternatives. The subsequent implementation of retrofitting new lighting identified significant electrical capital works associated with the provision of power for retrofitted lighting. Replacement of the existing lighting has commenced on site. /noncompliant NC010 R009: As lighting will be retrofitted progressively, prepare a schedule and submit to DoP&I detailing when compliant lighting equipment will be retrofitted, addressing the outcomes of the audit report

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed 3.7(c) take all practicable measures to mitigate off-site lighting impacts from the development, External Lighting Audit dated 15July 2010 Audit findings/recommendations Audit report identified areas with the highest potential to impact offsite receptors. This identification has allowed BSO to prioritise areas for retrofitting to the satisfaction of the Director-General. - No correspondence with DG on this issue was observed at the site inspection 4 Water Management - - - 4.1 Site Water Management Plan The Applicant shall prepare and implement a Site Water Management Plan for the development to the satisfaction of the Director-General. This plan must: 4.1(a) be prepared in consultation with NOW, OEH and DRE; Letter from BSO to various agencies dated 30 Sept 2010 4.1(b) 4.1(c) be submitted to the Director-General for approval by the end of June 2010; and include: a Site Water Balance; an Erosion and Sediment Control Plan; a Surface Water Monitoring Plan; a Groundwater Monitoring Program; and a Surface and Groundwater Response Plan. - Note: The SWMP was prepared for the Bulga Complex, rather than individual management plans for each open cut and underground facilities Letter from DoP dated 9 June 2010 Letter from BSO dated 30 Sept 2010 Email from DoP extending approval SWMP dated 30 Sept 2010 The SWMP was submitted to DoP following consultation with NOW, OEH and DRE DoP extended the original submission date. BSO provided SWMP to DoP. DoP email specifies that the SWMP is to be revised and a copy resubmitted to DoP for review before January 2013. A note on BSO website at the time of preparing this report advises that the SWMP is currently with government for approval The SWMP includes: a) Site Water Balance c) a Surface Water Monitoring Program d) a Ground Water Monitoring Program e) a Surface and Ground Water Response Plan Given the significance of the erosion and sediment control issue at Bulga, a standalone /noncompliant See above NC010 See above NC010 - Not Yet Enacted

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed (a) Site Water Balance The Site Water Balance must: include details of: sources and security of water supply water use and management on site any off-site water transfers or discharges reporting procedures; and Audit findings/recommendations ESCP has been prepared for the Bulga Complex - - - SWMP dated 30 Sept 2010 AEMR 2009 AEMR 2010 AEMR 2011 (b) describe measures to minimise water use by the site. SWMP dated 30 Sept 2010 (a) Erosion and Sediment Control Plan The Erosion and Sediment Control Plan must: be consistent with the requirements of Landcom s Managing Urban Stormwater: Soils and Construction manual; Section 6.0 of the SWMP includes details of: sources and security of water supply water use and management on site any off-site water transfers or discharges reporting procedures While the water balance is reported in AEMR for each year, the SWMP does not contain specific reporting procedures Section 5.1 of the SWMP includes details of maximising water recovery via double flocculation and return for reuse. Site inspection confirms use of dust suppressants such as RST on haul roads also minimise water use - Given the significance of the erosion and sediment control issue at BSO, a standalone ESCP has been prepared ESCP dated 1 Dec 2012 Chapter 3 of the Managing Urban Storm Water Soils and Construction. Volume 1 and Section 4.1 of Managing Urban Storm Water Soils and Construction. Volume2E Mines and Quarries requires the assessment of erosion and sediment constraints rainfall erosivity, flooding liability, topography, soils. The primary mechanism of soil erosion at Bulga is dispersion and while this is discussed briefly in Table 2, there is no discussion of the management or mitigation of dispersive soils. /noncompliant NC011 Administrative R010: BSO should revise the SWMP to specify that Site Water Balance to be include reporting in AEMR document - NC012 R011: BSO should revise the ESCP to be consistent with the requirements of Landcom s Managing Urban Stormwater: Soils and Construction manual

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed Audit findings/recommendations Appendix C of Managing Urban Storm Water Soils and Construction. Volume2E Mines and Quarries describes the recommended content of an ESCP. The ESCP is noncompliant with s.c.3 and s.c.4 of Appendix C /noncompliant (b) identify activities that could cause soil erosion and generate sediment; ESCP dated 1 Dec 2012 Section 3.25 of the ESCP identifies activities that could cause soil erosion and generate sediment (c) describe measures to minimise soil erosion and the potential for transport of sediment downstream; ESCP dated 1 Dec 2012 Section 4 and 5 of the ESCP describe measures to minimise soil erosion and the potential for transport of sediment downstream however they do not address dispersion which is the primary erosion and sedimentation mechanism at Bulga. Proposed flow velocities for diversion banks and drains of 1.5m/s exceed the maximum permissible velocity of dispersive soils which is 0.3m/s (IECA 2008) NC013 R012: BSO should revise the ESCP to address dispersion which is the primary erosion and sedimentation mechanism at BSO (d) describe the location, function and capacity of erosion and sediment control structures; and ESCP dated 1 Dec 2012 Section 5 of the ESCP broadly describes erosion control domains but does provide the capacity of erosion and sediment control structures NC014 R013: BSO should revise the ESCP to provide the capacity of erosion and sediment control structures (e) describe what measures would be implemented to maintain the structures over time. ESCP dated 1 Dec 2012 Section 6 of the ESCP describes generic inspection and maintenance measures that will maintain the structures over time however there is no detail on the maintenance of sediment basins/dams to ensure the design storm is captured, treated and discharged within a 5 day period NC015 R014: BSO should revise the ESCP to include details on the maintenance of sediment basins/dams to ensure the design storm is captured, treated and discharged within a 5 day period

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed (a) Surface Water Monitoring Program The Surface Water Monitoring Program must include: detailed baseline data on surface water flows and quality in creeks and other waterbodies that could potentially be affected by the development; SWMP dated 30 Sept 2010 SWMP dated 30 Sept 2010 (b) surface water and stream health impact assessment criteria; SWMP dated 30 Sept 2010 (c) (d) a program to monitor; surface water flows and quality; stream health; and channel stability; a program to monitor any impacts on private water users and water levels in privately-owned farm dams; and SWMP dated 30 Sept 2010 SWMP dated 30 Sept 2010 Audit findings/recommendations - - Section 8.1 of the SWMP provides detailed baseline data on surface water flows and quality in creeks and other waterbodies that could potentially be affected by the development Section 8.2 of the SWMP provides surface water impact assessment criteria. No impact assessment criteria for stream health was identified in the SWMP Section 4.1.2 of the SWMP describes stream flow gauging stations on Wollombi Brook upstream and downstream of Bulga Coal Complex being maintained by the NOW. Recorded stream flows are publicly available. Table 7 of the SWMP summarises surface water quality monitoring undertaken at sites within and surrounding Bulga Coal Mine. No stream health or channel stability monitoring program was identified in the SWMP No program to monitor any impacts on private water users and water levels in privatelyowned farm dams was identified in the SWMP /noncompliant NC016 R015: BSO should revise the SWMP to include stream health impact assessment criteria NC017 R016: BSO should revise the SWMP to include stream health and channel stability monitoring program NC018 R017: BSO should revise the SWMP to include a program to monitor any impacts on private water users and water levels in privately owned farm dams

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed (e) reporting procedures for the results of the monitoring program. SWMP dated 30 Sept 2010 (a) (b) (c) Groundwater Monitoring Program The Groundwater Monitoring Program must include: groundwater impact assessment criteria, including trigger levels for investigating any potentially adverse groundwater impacts of the development; a program to monitor the volume and quality of groundwater seeping into the underground mine workings; a program to monitor: groundwater inflows to the underground mining operations; impacts on regional aquifers and surrounding aquifers; impacts on the groundwater supply of potentially affected private landowners; and impacts on groundwater dependent ecosystems and riparian vegetation 2009 AEMR 2010 AEMR 2011 AEMR Audit findings/recommendations The results of water quality monitoring are reported in the Annual Environmental Management Report (AEMR). Each AEMR includes an assessment of results in terms of off-site impacts as a result of mining. Section 4.9 of 2009 AEMR Section 3.6 of 2010 AEMR Section 3.6 of 2011 AEMR An annual report of activity under the HRSTS is forwarded to the OEH, as well as in the AEMR. Results of the quarterly monitoring program are also published on BSO s webpage - - - SWMP dated 30 Sept 2010 SWMP dated 30 Sept 2010 SWMP dated 30 Sept 2010 Section 9.3 of the SWMP provides groundwater impact assessment criteria, including trigger levels for investigating any potentially adverse groundwater impacts of the development Table 6 and table 10 of the SWMP detail a program to monitor the volume and quality of groundwater seeping into the underground mine workings Table 6 and table 10 of the SWMP detail a program to monitor these criteria/potential issues /noncompliant

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed (d) reporting procedures for the results of the monitoring program. SWMP dated 30 Sept 2010 AEMR 2009 AEMR 2010 AEMR 2011 Audit findings/recommendations Reporting procedures for the results of the groundwater monitoring program could not be identified in the SWMP during the site inspection. However in compliance with AEMR preparation guidelines, monitoring results are provided in following AEMRs: Section 4.10 of 2009 AEMR Section 3.6 of 2010 AEMR Section 3.6 of 2011 AEMR Results of the quarterly monitoring program are also published on BSO s webpage /noncompliant NC019 Administrative R018: BSO should revise the SWMP to include reporting the results of the groundwater monitoring program in AEMRs Surface and Groundwater Response Plan The Surface and Groundwater Response Plan must describe the measures and/or procedures that would be implemented to: SWMP dated 30 Sept 2010 - - (a) respond to any exceedences of the surface water, stream health and groundwater impact assessment criteria; SWMP dated 30 Sept 2010 Section 10.1 of the SWMP provides corrective actions to any exceedences of the surface water, impact assessment criteria. No stream health responses were identified in the SWMP. Section 10.2 of the SWMP provides details of a course of action should mining impact on existing water supply bores or wells NC020 R019: BSO should revise the SWMP to include stream health responses (b) offset the loss of any baseflow to watercourses caused by the development where the impact assessment criteria are exceeded; SWMP dated 30 Sept 2010 Section 10.3 discusses the consideration of increasing buffer zones or relinquish extraction licenses equivalent to the leakage rate (c) compensate landowners of privately-owned land whose water supply is adversely affected by the development; and SWMP dated 30 Sept 2010 Section 10.2 of the SWMP provides details of a course of action should mining impact on existing water supply bores or wells (d) mitigate and/or offset any adverse impacts on groundwater dependent ecosystems or riparian vegetation. SWMP dated 30 Sept 2010 Section 10.3 discusses the consideration of increasing buffer zones or relinquish extraction

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed Audit findings/recommendations licenses /noncompliant 4.2 CHPP Dam The Applicant shall design and construct the CHPP Dam (as described in the documents listed in condition 1.2(a)(vii) of schedule 2) to the satisfaction of the DSC and DRE. The final dam design, as submitted to DSC and DRE, must be accompanied by a detailed assessment of the potential operational and environmental risks associated with the dam. Bulga CHPP Surge Dam Project Management Plan Section 3.0 dated 1 Feb 2010 Letter to DSC from PB dated 20 Aug 2008 Operation and Maintenance Manual, CHPP Surge Dam Oct 2011 3GL CHPP Dam was constructed by Robson Civil Projects on behalf of BSO. Robson Project Management Plan Section 3 contained relevant details associated with environmental management of the construction of the CHPP Dam. Risk Assessment provided to DSC Letters from DSC dated 9 Feb 2009 5 Hazardous materials and tailings management - - - 5.1 Overburden emplacement and management The Applicant shall construct and manage the overburden emplacements as set out in the EIS and to the approval of the DRE. EIS Bulga Coal Surface Operations Mining Operation Plan Jan 2006 to Dec 2012 Overburden emplacement managed according to the EIS and to the approval of the DRE via the MOP 5.2 Fine Rejects/Tailings Emplacement and Management The Applicant shall prepare a Fine Rejects Management Plan for the placement of fine rejects into the Deep Pit North fine rejects emplacement area to the satisfaction of the DRE prior to any placement of fine rejects in the emplacement areas. Deep Pit North Fine Rejects Management Plan Dec 2004 Letter to DPI dated 13 July 2006 submission of Tailing Management Strategy Deep Pit North Fine Rejects Management Plan March 2009 Deep Pit North Fine Rejects Management Plan prepared prior to placement of fine rejects. It was noted that the DPNFRMP was updated in 2009. Other tailings emplacements, such as the Old Tailings Dam, have been recommissioned with appropriate approvals since the previous site audit. 5.3 Waste - - - 5.3(a) 3 The Applicant must not cause, permit or allow any waste generated outside of the premises to be received at the Site Inspection There were no observations indicating that waste was being received from outside the

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed premises for storage, treatment, processing, reprocessing or disposal or any waste generated at the premises to be disposed of at the premises, except as expressly permitted by a licence under the Protection of the Environment Operations Act 1997. 3 General terms of approval from the OEH Audit findings/recommendations premises. Coal is also processed from the underground mine under the same EPL. /noncompliant 5.3(b) 4 This condition only applies to the storage, treatment, processing, reprocessing or disposal of waste at the premises if it requires an environment protection license under the Protection of the Environment Operations Act 1997. - No storage, treatment, processing, reprocessing or disposal of waste was observed at the premises Not Yet Enacted 4 General terms of approval from the OEH 5.3(c) Hazardous or industrial waste must be stored and disposed of in a manner to minimise its impact on the environment including appropriate segregation for storage and separate disposal by a waste transporter licensed by the OEH. Waste Management Plan dated 25 Oct 2009 Site Inspection WMP documents hazardous wastes as being transported and recycled or disposed of offsite. The site inspection indicated that hazardous goods waste storage (such as waste oil) on site was appropriate. JR Richards are BSO s integrated waste contractor 5.4 Chemical and Hazard Management - - - 5.4(a) The Applicant shall ensure that: - - - 5.4(a)(i) The location for storage of LPG, with respect to separation from other dangerous goods and safety measures, shall be in accordance with AS 1596:1997- Storage and Handling of LPG Gas; Dangerous Goods Notification 35/018992 Site Inspection Site inspection indicated that LPG cylinders were stored in a locked area, cylinders chained to and stored according to AS1596:1997. 5.4(a)(ii) The procedures for storage, handling and use of Class 1 explosive materials shall be in accordance with the requirements of Workcover New South Wales. Dangerous Goods Notification 35/018992 Site Security Plan for the storage and Handling of Explosives dated 1 Jan 2011 Explosive magazines storage area for explosives stored and handled in accordance with Workcover storage in shed separated from other buildings and work areas 5.4(b) The applicant shall ensure that all above-ground tanks containing material likely to cause environmental harm: - - -

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed 5.4(b)(i) are bunded or have an alternative spill containment system. Bunds must be impervious and sized to contain 110% of the volume of the largest container stored within; Certification of Area Station Fuel Farm Xstrata Bulga Coal dated 2 Nov 2012 Certification of Area Station Fuel Farm Xstrata Bulga Coal dated 2 Nov 2012 Audit findings/recommendations Certification confirms that both major fuel facilities conform to the requirements of AS1940, including 110% of the volume of the largest container. Site Inspection confirmed significant hydrocarbon storage and handling improvements to both areas. Remediation of issues identified during the 2009 compliance audit is still being undertaken /noncompliant 5.4(b)(ii) are designed and constructed in a manner that prevents the ingress of rain or water; and Site Inspection Both tank areas are open bunded storages. Both facilities are constructed within impermeable bunds. Potentially impacted water is collected and treated 5.4(b)(iii) are clearly labelled as to their contents. Site Inspection Site Inspection validated various examples of appropriate signage 6 Air Quality, Blast, Noise and Light Management - - - 6.1 Air Quality Management - - - 6.1.1 Dust Management Plan - - - 6.1.1(a) The Applicant shall, prior to commencement of mining operations, prepare a Dust Management Plan detailing air quality safeguards and procedures for dealing with dust emissions to the satisfaction of the Director-General. The management plan shall be updated as required by the Director-General. The plan shall include, but not be limited to, details to: - - - identify dust affected properties and the relevant dust limits consistent with the EIS and any subsequent submissions to the Department; Draft Dust Management Plan dated Dec 2012 AEMR 2010 AEMR 2011 There is a discrepancy between the adopted deposited dust criteria between AEMRs. The 2010 and 2011 AEMRs (Table 3.3) are not consistent with the DMP NC021 R020: Future AEMRs should be consistent with the criteria detailed in the DMP

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed specify the procedures for the dust monitoring program for the purpose of undertaking independent dust investigations; outline the procedure to notify property owners and occupiers likely to be affected by dust from the mine establish a protocol for handling dust complaints that include recording, reporting and acting on complaints; Draft Dust Management Plan dated Dec 2012 Draft Dust Management Plan dated Dec 2012 Draft Dust Management Plan dated Dec 2012 Audit findings/recommendations Section 7.2 of the DMP does not specify any procedures for the dust monitoring program for the purpose of undertaking independent dust investigations Section 7.2 of the DMP does not specify any procedure to notify property owners and occupiers likely to be affected by dust from the mine Section 7.1 of the DMP details a protocol for handling dust complaints that include recording, reporting and acting on complaints /noncompliant NC022 R021: Develop and document procedures for the dust monitoring program for the purpose of undertaking independent dust investigations NC023 R022: Develop and document procedures to notify property owners and occupiers likely to be affected by dust from the mine record appropriate mechanisms for community consultation; Draft Dust Management Plan dated Dec 2012 Section 7.5 of the DMP details appropriate mechanisms for community consultation outline mitigation measures to be employed to minimise dust emissions; Draft Dust Management Plan dated Dec 2012 Section 5.2 of the DMP details mitigation measures to be employed to minimise dust emissions ensure that equipment is available and used to control dust generation; Draft Dust Management Plan dated Dec 2012 Water trucks observed during site inspection identify longer term strategies directed towards mitigating dust levels that exceed the OEH target dust criteria; Draft Dust Management Plan dated Dec 2012 Longer term strategies directed towards mitigating dust levels that exceed the OEH target dust criteria could not be identified in the DMP NC024 R023: Document longer term

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed Audit findings/recommendations /noncompliant strategies directed towards mitigating dust levels that exceed the OEH target dust criteria detail locations for dust monitoring and deposition gauges at the residential areas and frequency of monitoring, as agreed with the OEH; Draft Dust Management Plan dated Dec 2012 Table 3 of the DMP detailed locations for dust monitoring and deposition gauges at the residential areas and frequency of monitoring, as agreed with the OEH continue the baseline monitoring program undertaken prior to development consent Draft Dust Management Plan dated Dec 2012 There was no reference to baseline monitoring program identified in the DMP NC025 R024: Continue the baseline monitoring program undertaken prior to development consent 6.1.2 Air Quality and Dust Monitoring - - - 6.1.2(a) The Applicant shall: - - - 6.1.2(a)(i) undertake monitoring at locations described in the Dust Management Plan; Draft Dust Management Plan dated Dec 2012 Requirement implemented 6.1.2(a)(ii) establish dust deposition and total suspended particulate (TSP) monitoring locations for the mine operations, including sites for monitoring impacts of dust at the nearest non-mined owned residences, and locations as may be determined to be necessary by the Director-General in consultation with the OEH and in accordance with the Dust Management Plan referred to in Condition 6.1(a); 2009 AEMR 2010 AEMR 2011 AEMR Requirement implemented 6.1.2(a)(iii) provide all results and analysis of air quality monitoring in the AEMR including a determination of the dust deposition rate in gm/m 2 /month, which shall be plotted to provide trend analysis in the AEMR.; 2009 AEMR 2010 AEMR 2011 AEMR Requirement implemented 6.1.2(a)(iv) 5 Monitoring of dust deposition and for the concentration of PM 10, total suspended particulate (TSP) in ambient air must be carried out at locations agreed to in consultation with the Draft Dust Management Plan dated Dec 2012 Requirement implemented

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed OEH. 5 General terms of Approval from OEH Audit findings/recommendations /noncompliant 6.1.2(a)(v) Monitoring for the concentration of PM 10, TSP and deposited dust are to be carried out as required to be conducted by the general terms of approval, or in accordance with a license under the Protection of the Environment Operations Act 1997, in relation to the development or in order to comply with a relevant local calculation protocol, must be done in accordance with: any methodology which is required by or under the POEO Act 1997 to be used for the testing of the concentration of the pollutant; or if no such requirement is imposed by or under the POEO Act 1997, any methodology which the general terms of approval or a condition of the license or the protocol (as the case may be) requires to be used for that testing; or if no such requirement is imposed by or under the POEO Act 1997 or by the general terms of approval or a condition of the license or the protocol (as the case may be), any methodology approved in writing by the OEH for the purposes of that testing prior to the testing taking place. EPL 563 2009 AEMR 2010 AEMR 2011 AEMR Requirement implemented 6.1.2(b) Monitoring of the concentration of PM 10 particulate matter in ambient air must be carried out at locations agreed to in consultation with the OEH. The sampling method, units of measure, interval and frequency of monitoring will be as set out in the Approved Methods for the Sampling and Analysis of Air Pollutants in NSW or its latest version. Draft Dust Management Plan dated Dec 2012 Monitoring is being conducted appropriately 6.1.2(c) The Applicant shall ensure that the dust and particulate emissions generated from the development do not cause exceedences of the air quality impact assessment criteria listed in Tables 1, 2 and 3 at any residence on, or more than 25 percent of, any privately owned land. 2009 AEMR 2010 AEMR 2011 AEMR 2009 Deposited Dust did not exceed 4g/m2/month criterion. 2009 Annual TSP did not exceed the 90ug/m3 criterion. 2009 Annual PM10 was less than criteria of 30ug/m3. NC026 R025: Further investigations should be undertaken for H1b

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed Table 1: Long term impact assessment criteria for particulate matter Pollutant Total suspended particulate (TSP) matter Particulate matter < 10 µm (PM 10) Averaging period Criterion Annual 90 µg/m 3 Annual 30 µg/m 3 Table 2: Short term impact assessment criteria for particulate matter Pollutant Particulate matter < 10 µm (PM 10) Averaging period Criterion 24 hour 50 µg/m 3 Table 3: Long term impact assessment criteria for deposited dust Pollutant Deposited dust Averaging period Maximum increase in deposited dust level Maximum total deposited dust level Annual 2 g/m 2 /month 4 g/m 2 /month Audit findings/recommendations 2009 24hr PM10 exceeded the short term criteria of 50ug/m3 on 12 occasions. Further investigations were conducted to determine the source. 2010, One occasion where Deposited Dust exceeded 4g/m2/month criteria. This was at site E1. 2010 Annual TSP was less than criteria of 90ug/m3. 2010 Annual PM10 was less than criteria of 30ug/m3. 2010 24hr PM10 exceeded the short term criteria of 50ug/m3 on 7 occasions. These exceedences were mainly related to site H1b. 2011, One occasion where Deposited Dust exceeded 4g/m2/month criteria. This was at site E1. 2011 Annual TSP was less than criteria of 90ug/m3. 2011 Annual PM10 was less than criteria of 30ug/m3. 2011 24hr PM10 exceeded the short term criteria of 50ug/m3 on 5 occasions, all at site H1b /noncompliant 6.1.2(c) In the event that a landowner or occupier considers that dust from the project is in excess of the OEH criteria for dust levels, at their dwelling, and the Director-General, is satisfied that an investigation is required, the Applicant shall upon the receipt Xstratasafe Complaints Register 2009, 2010 and 2011 No investigation requested by landowner or occupier

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed of a written request: 6.1.2(c)(i) 6.1.2(c)(ii) 6.1.2(c)(iii) 6.1.2(c)(iv) consult with the landowner or occupants affected to determine their concerns; make arrangements for appropriate independent dust investigations in accordance with the Dust Management Plan, and to the satisfaction of the Director-General, to quantify the impact and determine the source of the effect; modify the mining activity in accordance with a Dust Management Plan if exceedences are demonstrated to result from the mine related activity. This shall include: introduction of additional controls, either of dust generation from individual sources on the site or on site operations or modify operations, to ensure that the dust criteria are achieved; enter into an agreement with the landowner or provide such forms of benefit or amelioration as may be agreed between the parties as providing acceptable compensation for the dust levels experienced; conduct follow up investigations to the satisfaction of the Director-General where necessary. Xstratasafe Complaints Register 2009, 2010 and 2011 2009 AEMR 2010 AEMR 2011 AEMR Xstratasafe Complaints Register 2009, 2010 and 2011 2009 AEMR 2010 AEMR 2011 AEMR Xstratasafe Complaints Register 2009, 2010 and 2011 2009 AEMR 2010 AEMR 2011 AEMR Xstratasafe Complaints Register 2009, 2010 and 2011 2009 AEMR 2010 AEMR 2011 AEMR Audit findings/recommendations Stakeholders consulted appropriately Dust monitoring undertaken for one of the registered dust complaints (2009). Two other complaints investigated and appropriate mitigation applied. The AEMR s complaints section details actions taken to address all complaints. The actions taken are considered appropriate Documented in AEMR /noncompliant 6.1.2(d) If the independent dust investigations in sub-clause (d) above - Condition not relevant in this instance Not Yet Enacted

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed 6.1.2(e) confirm that dust limits are in excess of the relevant OEH criteria, the Applicant shall at the written request of the owner acquire the relevant property. Acquisition shall be in accordance with the procedures set out in schedule 3. Further independent investigations shall cease if the Director- General is satisfied that the relevant consent limits or relevant OEH amenity criteria are not being exceeded and are unlikely to be exceeded in the future. Audit findings/recommendations /noncompliant - - Not Yet Enacted 6.1.3 Dust Suppression Control - - - 6.1.3(a) The Applicant shall: - - - 6.1.3(a)(i) maintain and use sufficient equipment with the capacity to apply water to all unsealed trafficked areas at a rate which minimises dust emissions; Draft Dust Management Plan dated Dec 2012 RST Performance Report July 2012 RST Performance Report Aug 2012 During the site inspection, the auditor observed that visual dust emissions from unsealed trafficked areas were negligible. Water trucks were observed in use. BSO are currently trialing the use of RT9 Dust suppressant on haul roads RST Performance Report Sept 2012 RST Performance Report Oct 2012 6.1.4(a)(ii) ensure the prompt and effective rehabilitation of all disturbed areas to minimise generation of wind erosion dust, in accordance with the requirements of DRE; Draft Dust Management Plan dated Dec 2012 Bulga Coal 2011 Annual Rehabilitation Plan Site inspection identified areas where recent rehabilitation works had occurred. This included permanent rehabilitation areas and the seeding of the embankments of a number of overburden stockpiles Bulga 2012 Rehabilitation Plan Final Draft 6.1.3(a)(iii) keep the surface of the coal product and stackout stockpiles sufficiently damp to minimise windblown dust; and Draft Dust Management Plan dated Dec 2012 Site Inspection observed the sprinklers were operational 6.1.3(a)(iv) 6 ensure activities occurring at the mine are carried out in a manner that will minimise emissions of dust from the Draft Dust Management Plan dated Dec 2012 Review of AEMR deposited dust monitoring data indicates that site E1 is noted as just NC027

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed premises. 2009 AEMR 6 General Terms of Approval from OEH 2010 AEMR 2011 AEMR Bulga EIS Audit findings/recommendations exceeding the deposited dust criteria. There is no documented evidence that a specific investigation has been undertaken to understand the exceedences at this location 6.2 Blast management - - - 6.2(a) 6.2(b) The Applicant shall, prior to the commencement of mining, update or prepare a Blast and Vibration Management Protocol for the mining operations described in the EIS, to the satisfaction of the Director-General. The plan shall identify the blast provisions detailed in the ANZECC document titled Technical Basis for Guidelines to Minimise Annoyance due to Blasting Overpressure, and Ground Vibration or its latest version. 7 The Blast and Vibration Management Plan in subclause (a) must be prepared and implemented by the Applicant, and shall include, but need not be limited to: Compliance standards Mitigation measures Remedial action Monitoring methods and program Monitoring program for fly-rock distribution Measures to protect underground utilities (rising mains, subsurface telecommunication and electric cables) Notification of procedures for neighbours prior to detonation of each blast Measures to ensure no damage by fly-rock to people, property, livestock and power lines. 7 General Terms of Approval from OEH Blast Management Plan Revision 0.1 Letter from DoP&I dated 7 Nov 2012 Blast Management Plan Revision 0.1 A Blast and Vibration Management Plan has been prepared for the mining operations described in the EIS. The plan has been approved by the DG. The plan identifies blast provisions detailed in the ANZECC document titled Technical Basis for Guidelines to Minimise Annoyance due to Blasting Overpressure, and Ground Vibration The Bulga Coal Blast and Vibration Management Plan addresses the following issues: Section 3.13 refers to compliance standards Section 3.31 details pre-blast checklist and various blast management controls Sections 3.6 and 3.82 detail remedial actions include property inspections and subsequent actions Section 3.52 provides monitoring methods and program Section 3.35 provides monitoring program for fly-rock distribution Section 3.37 provides protection for /noncompliant R026: Further investigation should be undertaken to determine the source and if internal or external activates in the area can be modified to reduce dust emissions at E1

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed 6.2(c) 6.2(d) 6.2(e) The applicant shall advise residents within two (2) kilometers of the active mining area of future blasting events on a monthly basis, and of any changes to monthly programs. Upon written request of the owner of any dwellings located within two (2) kilometers of the active mining area, the Applicant shall arrange at its own costs, for the inspection by a technically qualified person agreed to by both parties, to record the material condition of any structure on such property within 14 days of receipt of the request. The Applicant shall supply a copy of any inspection report, certified by the person who undertook the inspection, to the relevant property owner within fourteen (14) days of receipt of the report; 8 The overpressure level from blasting operations on the premises must not: 8 General Terms of Approval from OEH Figure illustrating 2km of blasting activity Audit findings/recommendations underground services Section 3.42 provides notification of procedures for sensitive receptors (regardless of distance from blast) Section 3.35 provides measures to ensure no damage by fly-rock to people, property, livestock and power lines No residences located within 2km /noncompliant - No requests have been received Not Yet Enacted - - - 6.2(e)(i) 6.2(e)(ii) exceed 115dB (Lin Peak) for more than 5% of the total number of blasts over a period of 12 months; and exceed 120dB (Lin Peak) at any time, when measured or computed at a free field location within 3.5 meters of any potentially affected residential building or other noise sensitive location such as a school or hospital unless otherwise approved in writing by the OEH 2009 AEMR 2010 AEMR 2011 AEMR 2009 AEMR 2010 AEMR 2011 AEMR 2009 was 0.8% of blasts less than 5% 2010 three occasion less than 5% 2011 two occasion less than 5% Exceedance of 115 db (Lin Peak) noise level did not occur for greater than 5% of the total number of blasts over the 12 month period Measured overpressure blast exceedance of the 120 db (Lin Peak) noise level on 4 April 2009 and 3 November 2009 as reported to NSW EPA. Reinforcement of BVMP with operations has NC028 R027: Continue to monitor and implement the BVMP

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed Audit findings/recommendations seen a substantial decrease in blast related incidents since 2009, BVMP has also been revised in 2011 /noncompliant 6.2(f) 9 Ground Vibration peak particle velocity (ppv) from the blasting operations on the premises must not: 9 General Terms of Approval from OEH - - - 6.2(f)(i) exceed 5mm/s for more than 5% of the total number of blasts over a period of 12 months; and 2009 AEMR 2010 AEMR No exceedences identified in the blasting monitoring data 2011 AEMR 6.2(f)(ii) exceed 10mm/s at any time, when measured or computed at a free field location within 30 metres of any potentially affected residential boundary or other noise sensitive location such as a school or hospital. 2009 AEMR 2010 AEMR 2011 AEMR No exceedences identified in the blasting monitoring data 6.2(g) 10 In relation to blasting: 10 General Terms of Approval from OEH - - - 6.2(g)(i) 11 Blasting associated with mining operations may only take place between the hours of 9am and 5pm Monday to Saturday inclusive. 11 General Terms of Approval from the OEH Quarterly monitoring results for January to December for years 2009 to 2012 All blasting events between required hours. Section 3.21 of the BVMP reinforces these hours 6.2(g)(ii) 12 The hours of operation for blasting operations specified in this condition may be varied if the OEH, having regard to the effect that the proposed variation would have on the amenity of the residents in the locality, gives written consent to the variation. Approved hours and number of blasts per day must be approved and may be varied with the written consent of the OEH. - No evidence to demonstrate a variation has been sought. Not Yet Enacted 12 General Terms of Approval from the OEH 6.2(g)(iii) For the purpose of blast monitoring, the ground vibration or the overpressure must be measured at noise sensitive sites (e.g. residences, hospitals, schools etc.), selected in consultation with the OEH. Letter from BSO dated 10 Sept 2012 Letter from EPA dated 20 Sept 2012 BSO forwarded BVMP to EPA for review and comment on this specific condition. OEH stated EPA does not does not review these documents.

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed Audit findings/recommendations BSO made reasonable efforts to comply with the intent of this condition however EPA policy is not to comment on management plans /noncompliant 6.2(g)(iv) The Applicant shall ensure that air blast overpressure and vibration monitoring is generally carried out in accordance with the recommendations of Australian Standard AS-2187-1993 or its latest version, and in terms of ANZECC guidelines, including compliance with the guideline titled Technical Basis for Guidelines to Minimise Annoyance due to Blasting Overpressure and Vibration or its latest version, to the satisfaction of the OEH. Letter from BSO dated 10 Sept 2012 Letter from EPA dated 20 Sept 2012 BSO forwarded BVMP to EPA for review and comment on this specific condition. OEH stated EPA does not does not review these documents. BSO made reasonable efforts to comply with the intent of this condition however EPA policy is not to comment on management plans 6.2(g)(v) 13 The Applicant must monitor ground vibration and overpressure of all blasts at locations agreed to in consultation with the OEH. 13 General terms of approval from the OEH Letter from BSO dated 10 Sept 2012 Letter from EPA dated 20 Sept 2012 BSO forwarded BVMP to EPA for review and comment on this specific condition. OEH stated EPA does not does not review these documents. BSO made reasonable efforts to comply with the intent of this condition however EPA policy is not to comment on management plans 6.3 Noise - - - Acquisition Upon Request - - - 6.3.1 Upon receiving a written request for acquisition from the owner of any land listed in Table 4, the Applicant shall acquire that land in accordance with the procedures in conditions 6-8 of schedule 3. Table 4: Land subject to acquisition upon request 6 I.B. Headley 149 E. McInerney 7 I.B. Headley 150 E. McInerney 9 I.B. & J.D. Headley 151 R.D. & L.M. Lewis - No written request from potentially affected landowners identified

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed 10 I.B. & J.D. Headley 216 R.D. & G.W. Turnbull Audit findings/recommendations Land Acquisition Criteria - - - 6.3.2 If the noise generated by the development exceeds the criteria in Table 5 at any residence on privately-owned land or on more than 25 per cent of any privately-owned land, the Applicant shall, upon receiving a written request for acquisition from the landowner, acquire the land in accordance with the procedures in conditions 6-8 of schedule 3. Bulga Coal Complex Noise Management Plan, BUL SD PLN 0032. Effective from 23 Oct 2012 Criteria from Table 5 incorporated in Appendix 1 of NMP. No written request from potentially affected landowner identified /noncompliant Table 5: Land Acquisition Criteria db(a) Day/Evening/Night L Aeq(15min) Land 40 All privately owned land excluding the land listed in Table 4. Notes: Noise generated by the development is to be measured and evaluated in accordance with the relevant procedures and exemptions (including certain meteorological conditions) of the NSW Industrial Noise Policy. These noise limits do not apply on land if the Applicant has a negotiated agreement with the relevant owner/s of that land to generate higher noise levels, and the Applicant has advised the Department in writing of the terms of this agreement. Noise Impact Assessment Criteria - - - 6.3.3 The Applicant shall ensure that the noise generated by the development does not exceed the noise impact assessment criteria in Table 6 at any residence on privately-owned land, or on more than 25 percent of any privately-owned land. Table 6: Noise Impact Assessment Criteria db(a) Residence/Land Day Evening Night LAeq(15 LAeq(15 LAeq(15 Night LA1(1 Bulga Coal Complex Noise Management Plan, BUL SD PLN 0032. Effective from 23 Oct 2012 Noise Management Procedure, Criteria from Table 6 incorporated in Appendix 1 of NMP and Noise Management Procedure

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed min) min) min) min) 249 40 40 40 45 8, 195 39 39 39 45 157, 179, 307 38 38 38 45 1, 2s, 154, 237, 37 37 37 45 239, 250, 252, 261, 262, 308 232 37 37 36 45 97, 153, 163, 36 36 36 45 169e, 171, 183, 184, 197, 217s, 217m, 217n, 234, 235, 240, 263, 264, 266, 267, 272, 273, 274, 276, 279, 280, 282 33, 156w, 230, 36 36 35 45 281 All other 35 35 35 45 privately owned land, excluding the land listed in Table 4. Notes: To interpret the locations referred to in Tables 4 and 6, see the applicable figure in Appendix 1. Noise generated by the development is to be measured and evaluated in accordance with the relevant procedures and exemptions (including certain meteorological conditions) of the NSW Industrial Noise Policy. These noise limits do not apply at residences or land if the Applicant has a negotiated agreement with the relevant owner/s of that residence or land to generate higher noise levels, and the Applicant has advised the Department in writing of the terms of this agreement. ENVPRO4.3.03.03.014. Effective from 27 Aug 2010 Noise Management Procedure BUL SD PRO 0094. Effective from 9 July 2012 Audit findings/recommendations Additional Noise Mitigation Measures - - - 6.3.4 Upon receiving a written request from: a landowner of the land listed in Table 4 (unless the landowner has requested acquisition); or Bulga Coal Complex Noise Management Plan, BUL SD PLN Criteria from Table 4 incorporated in Appendix 1 of NMP. No written request from potentially affected /noncompliant

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed a landowner of residence/land 8, 157, 179, 195, 249 or 307 0032. Effective from 23 (unless a negotiated agreement is in place); or Oct 2012 the owner of any other residence where subsequent operational noise monitoring shows the noise generated by the development is greater than, or equal to, 38 db(a) L Aeq(15 minute) (unless a negotiated agreement is in place), the Applicant shall implement additional noise mitigation measures such as double glazing, insulation, and/or air conditioning at any residence on the land in consultation with the landowner. These additional mitigation measures must be reasonable and feasible. The Applicant shall notify all landowners by 31 July 2010 that they are entitled to receive additional noise mitigation measures in accordance with this condition, to the satisfaction of the Director-General. Audit findings/recommendations landowner identified /noncompliant If within 3 months of receiving such a request from the landowner, the Applicant and the landowner cannot agree on the measures to be implemented, or there is a dispute about the implementation of these measures, then either party may refer the matter to the Director-General for resolution. Cumulative Noise Impact Assessment Criteria - - - 6.3.5 The Applicant shall implement all reasonable and feasible measures to ensure that the noise generated by the development combined with the noise generated by other mines does not exceed the amenity criteria in Table 7 at any residence on privately-owned land or on more than 25 per cent of any privately-owned land, to the satisfaction of the Director-General. Table 7: Cumulative Noise Impact Assessment Criteria db(a) L Aeq(period) Location Day LAeq(11 hour) Evening LAeq(4 hour) Night LAeq(9 hour) Bulga Coal Complex Noise Management Plan, BUL SD PLN 0032. Effective from 23 Oct 2012 Criteria from Table 7 incorporated in Appendix 1 of NMP

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed All privately owned land, excluding the land listed in Table 4. 50 45 40 Audit findings/recommendations /noncompliant Note: Cumulative noise is to be measured and evaluated in accordance with the relevant procedures and exemptions (including certain meteorological conditions) of the NSW Industrial Noise Policy. Cumulative Land Acquisition Criteria - - - 6.3.6 If the cumulative noise generated by the development combined with the noise generated by other mines exceeds the amenity criteria in Table 8 at any residence on privately owned land, or on more than 25% of privately owned land, then upon receiving a written request from the landowner, the Applicant shall take all reasonable and feasible measures to acquire the land on as equitable basis as possible with the relevant mines, in accordance with the procedures in conditions 6-8 of schedule 3, to the satisfaction of the Director- General. Table 8: Cumulative Land Acquisition Criteria db(a) Location Day LAeq(11 hour) Evening LAeq(4 hour) Night LAeq(9 hour) All privately 53 48 43 owned land, excluding the land listed in Table 4. Notes: For the purpose of this condition, the expression Applicant in conditions 6-8 of schedule 3 should be interpreted as the Applicant and any other relevant mines. Cumulative noise is to be measured and evaluated in accordance with the relevant procedures and exemptions (including certain meteorological conditions) of the NSW Industrial Noise Policy. Bulga Coal Complex Noise Management Plan, BUL SD PLN 0032. Effective from 23 Oct 2012 Criteria from Table 8 incorporated in Appendix 1 of NMP. No written request from potentially affected landowner identified

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed Continuous Improvement 6.3.7 The Applicant shall: (a) implement all reasonable and feasible best practice noise mitigation measures; (b) progressively upgrade and replace its mobile equipment fleet; (c) report the implementation and effectiveness of these measures in the AEMR, to the satisfaction of the Director-General. Noise Management Plan 6.3.8 The Applicant shall prepare and implement a Noise Management Plan for the development to the satisfaction of the Director-General. This program must: (a) be prepared by a suitably qualified expert whose appointment has been approved by the Director-General, and submitted to the Director-General for approval by 30 August 2010; and (b) include a: combination of unattended and attended monitoring measures; noise monitoring protocol for evaluating the contribution of low frequency noise; noise monitoring protocol for evaluating compliance with the relevant criteria for noise impact assessment, land acquisition, cumulative impact assessment and cumulative acquisition in this consent; and response protocol that will immediately be followed if noise emissions are nearing or exceeding these criteria and a description of what contingency plans will be implemented on site if this occurs. Notes: Bulga Coal Complex Noise Management Plan, BUL SD PLN 0032. Effective from 23 Oct 2012 2010 AEMR 2011 AEMR Bulga Coal Complex Noise Management Plan, BUL SD PLN 0032. Effective from 23 Oct 2012 BUL SD PRO 0094. Effective from 9 July 2012 Audit findings/recommendations The continuous improvement requirements to implement all reasonable and feasible best practice noise mitigation measures are incorporated in Appendix 4 of NMP. A new fleet of mobile equipment has been procured as per Section 3.41 of NMP. Real time monitoring has been implemented Dispatch room as been constructed and commissioned. The effectiveness of implementing these measures is noted in Section 3.3 of the AEMRs The NMP was prepared by a suitably qualified expert whose appointment has been approved by the Director-General. The NMP was originally submitted for approval before 30 August 2010. This NMP has recently been revised. The revised NMP includes: Section 6.1 and 6.3 describe a combination of unattended and attended monitoring measures; noise monitoring protocol for evaluating the contribution of low frequency noise; monitoring protocol for evaluating compliance with the relevant criteria for noise impact assessment and land acquisition; and BUL SD PRP 0094 noise describes the response protocol that will /noncompliant NC029 R028: BSO and Mt Thorley Warkworth should consider developing a cumulative noise monitoring/management strategy to formalise the response protocol and contingency plans in relation to cumulative noise

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed The management responses to be followed in the event that noise emissions are nearing or exceeding the noise criteria in this consent should be staged in a manner that is commensurate with the level of noise emissions that may occur. Management responses should include relocating, modifying and/or ceasing operations until the exceedance is addressed and rectified. In the event of a breach of the noise criteria in this approval, noise traces for the offending period should be forwarded to the Department and OEH as soon as practicable following the event. Audit findings/recommendations immediately be followed if noise emissions are nearing or exceeding the site specific criteria and a description of what contingency plans will be implemented on site if this occurs The NMP does not provide a response protocol and contingency plan for action when noise levels are nearing or exceeding the cumulative assessment criteria /noncompliant 7 Transport and utilities - - - 7.1 Road transport - - - 7.1(a) No coal shall be hauled on public roads. - No evidence of coal haulage on public roads was observed during the site inspection 8 Monitoring/auditing 8.1 In addition to the requirements contained elsewhere in this consent, the Director-General may in consultation with the relevant government authorities and the Applicant, require the monitoring programs to be revised/updated at any time to reflect changing environmental requirements or changes in technology/operational practices related to the mining operations. Changes shall be made and approved in the same manner as the initial monitoring programs. All monitoring programs shall also be made publicly available at SSC within two weeks of approval of the relevant government authority. 8.2 All sampling strategies and protocols undertaken as part of any monitoring program shall include a quality assurance/quality control plan and shall require approval from the relevant regulatory agencies to ensure the effectiveness and quality of the monitoring program. - The Director-General has not required monitoring programs to be revised/updated Project Management Quality Plan dated 5 May 2008 This PMQP includes a quality assurance/quality control plan for BSO s monitoring program. No documentation related to the approval of the quality assurance/quality control plan was available during the site inspection. Not Yet Enacted NC030 R029: BSO should seek approval from the relevant regulatory agencies upon

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed 8.3 Meteorological The Applicant shall continue meteorological monitoring by utilising and maintaining the existing weather station at the Bulga Complex. The meteorological data shall be particularly used for assessment of noise, dust and blasting impacts on nearby residences. 2009 AEMR 2010 AEMR 2011 AEMR Quarterly reports Audit findings/recommendations BSO has the PMQP to be updated next year BSO maintain a weather data station on site. This weather station provided good availability and reliability. BSO can also record weather data from the flare weather station, as required 8.4 Third Party Monitoring/ - - - 8.4(a) 8.4(a)(i) Every 3 years from the date of this consent until the completion of mining operations, unless the Director-General directs otherwise, the Applicant shall commission and pay the full cost of an of the development. This audit must: be conducted by suitably qualified, experienced, and independent expert/s whose appointment has been endorsed by the Director-General; Bulga Open Cut Mine Compliance Audit Report dated Dec 2009 Letter from DoP dated 4 November 2009 8.4(a)(ii) include consultation with the relevant agencies; Bulga Open Cut Mine Compliance Audit Report dated Dec 2009 8.4(a)(iii) 8.4(a)(iv) assess, in respect of the requirements of this consent and any relevant mining lease or environment protection license, the environmental performance of the development and its effects on the surrounding environment; assess whether the development is complying with relevant standards and performance measures specified in these approvals (including under any strategy, plan or program required under these approvals) and with other statutory requirements; Bulga Open Cut Mine Compliance Audit Report dated Dec 2009 Bulga Open Cut Mine Compliance Audit Report dated Dec 2009 Letter from DoP&I 22 Jan 2010 - - was conducted by suitably qualified, experienced, and independent expert/s whose appointment has been endorsed by the Director-General Section 2.5 of the 2009 Audit Report detailed consultation with the relevant agencies Consent Conditions, EPL and Mining Lease were assessed during the 2009 Independent Environmental Audit The audit report contained an assessment on whether the development is complying with relevant standards and performance measures specified in these approvals. Letter confirms DoP&I generally satisfied with audit report and BSO response 8.4(a)(v) review the adequacy of strategies, plans or programs required Various Management The adequacy of various management plans strategies, plans or programs required under /noncompliant submission of revised PMQP

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation Audit findings/recommendations reviewed under these approvals; and, if necessary, Plans these approvals were reviewed 8.4(a)(vi) 8.4(b) 8.4(c) recommend measures or actions to improve the environmental performance of the development, and/or any strategy, plan or program required under these approvals. Note: This audit team must be lead by a suitably qualified auditor and include experts in the fields of noise, air quality and mine rehabilitation. Within 6 weeks of completing this audit, or as otherwise agreed by the Director-General, the Applicant shall submit a copy of the audit report to the Director-General with a response to any recommendations contained in the audit report. Within 3 months of submitting the audit report to the Director- General, the Applicant shall review and if necessary revise the strategies/plans/programs required under this consent, to the satisfaction of the Director-General. Bulga Open Cut Mine Compliance Audit Report dated Dec 2009 Letter from BSO dated 6 Jan 2010 The audit report contained various recommendations for measures or actions to improve the environmental performance of the development, and/or any strategy, plan or program required under these approvals BSO submit a copy of the audit report to the Director-General with a response to any recommendations contained in the audit report, within 6 weeks of completing the audit - No strategies/plans/programs were required to be modified to the satisfaction of the Director- General 9 Reporting - - - 9.1 Annual Environmental Management Report (AEMR) - - - 9.1(a) 9.1(a)(i) Within 12 months of this approval, and annually thereafter, the Applicant shall submit an Annual Environmental Management Report (AEMR) to the Director-General and the relevant agencies. This report must: identify the standards and performance measures that apply to the development; 2009 AEMR 2010 AEMR 2011 AEMR 2009 AEMR 2010 AEMR 2011 AEMR 9.1(a)(ii) describe the works carried out in the last 12 months; 2009 AEMR 9.1(a)(iii) describe the works that will be carried out in the next 12 months; 2010 AEMR 2011 AEMR 2009 AEMR 2010 AEMR 2011 AEMR All AEMRs submitted to DoP&I All AEMRs submitted identify the standards and performance measures that apply to the development e.g. 2011 AEMR Section 2.2 describes the works carried out in the last 12 months e.g. 2011 AEMR Section 6.2 describes the works that will be carried out in the next 12 months /noncompliant

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed 9.1(a)(iv) 9.1(a)(v) 9.1(a)(vi) 9.1(a)(vii) include a summary of the complaints received during the past year, and compare this to the complaints received in previous years; include a summary of the monitoring results for the development during the past year; include an analysis of these monitoring results against the relevant impact assessment criteria/limits; monitoring results from previous years; and predictions in any relevant documents referred to under condition 1.2(a) of Schedule 2; identify any trends in the monitoring results over the life of the development; 2009 AEMR 2010 AEMR 2011 AEMR 2009 AEMR 2010 AEMR 2011 AEMR 2009 AEMR 2010 AEMR 2011 AEMR 2009 AEMR 2010 AEMR 2011 AEMR 9.1(a)(viii) identify any non-compliance during the previous year; and 2009 AEMR 9.1(a)(ix) 9.2 describe what actions were, or are being, taken to ensure compliance. 14 General reporting 14 General Terms from the OEH 2010 AEMR 2011 AEMR 2009 AEMR 2010 AEMR 2011 AEMR Audit findings/recommendations e.g. 2011 AEMR Section 4.1 provides a summary of the complaints received during the past year for the complex. Table 4.1 compare this to the complaints received in previous years e.g. 2011 AEMR Summaries of monitoring are provided within the text of the AEMR and details are provided in Appendices of the AEMRs e.g. 2011 AEMR Table 3.3 includes an analysis of deposited dust monitoring results against the relevant impact assessment criteria/limits e.g. 2011 AEMR contains various hard data that could illustrate trends throughout the life of the development. Appendices to the AEMR for groundwater characteristics do contain some graphical trends, providing comparison between years. The AEMR does not identify all trends in the monitoring results over the life of the development e.g. 2011 AEMR Section 3.6.3 identifies noncompliance during the previous year associated a sediment dam overflowing and a tailings line failure which was contained on site e.g. 2011 AEMR Section 3.5.3 describes the Bulga Coal 2012 Dust Improvement Project - - - /noncompliant NC031 Administrative R030: BSO should include more monitoring result trends (possibly graphical) in the AEMR over the life of the development

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed 9.2(a) 9.2(b) 9.2(c) The results of any monitoring required to be conducted by the OEH s general terms of approval, or a license under the Protection of the Environment Operations Act 1997, in relation to the development or in order to comply with the load calculation protocol must be recorded and retained. All records required to be kept by the license must be: in a legible form, or in a form that can readily be reduced to a legible form; kept for at least 4 years after the monitoring or event to which they relate took place; and produced in a legible form to any authorised officer, on request. The following records must be kept in respect of any samples required to be collected: The date(s) on which the sample(s) were taken; The time(s) at which the sample(s) were collected; The point(s) at which the sample(s) were taken; and The name of the person who collected the sample(s). Environmental Monitoring Database BSO s Website and Quarterly Monitoring Results Environmental Monitoring Database BSO s Website and Quarterly Monitoring Results Environmental Monitoring Database BSO s Website and Quarterly Monitoring Results Audit findings/recommendations BSO, as part of the Xstrata corporate structure, utilise an Environmental Monitoring Database (EMD) to store electronic monitoring data. Quarterly monitoring results are published on BSO s webpage BSO, as part of the Xstrata corporate structure, utilise EMD to store electronic monitoring data. Monitoring data is maintained for the life of the facility. Quarterly Monitoring Results are published on BSO s webpage BSO, as part of the Xstrata corporate structure, utilise EMD to store electronic monitoring data. Quarterly Monitoring Results are published on BSO s webpage 9.3 Access to information - - - 9.3(a) 9.3(a)(i) By 30 April 2008, and thereafter within 3 months of the approval of any strategy/plan/program required under this consent (or any subsequent revision of these strategies/plans/programs), or the completion of the audits or AEMRs required under this consent, the Applicant shall: provide a copy of the relevant document/s to the relevant agencies and CCC; and /noncompliant BSO s Website Verified during previous 2009 Audit Registered post certificates dated 21 Sept 2012 Registered post certificates for submission of 2011 AEMR were witnessed for relevant agencies and CCC 9.3(a)(ii) put a copy of the document/s on its website. BSO s Website Copies of AEMRs from 2003 to 2011 observed on BSO s website at the time of preparing this report 9.3(b) By 30 April 2008, and thereafter throughout the life of the - - -

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed development, the Applicant shall: 9.3(b)(i) 9.3(b)(ii) include a copy of this consent, as may be modified from time to time, on its website; provide a full summary of monitoring results required under this consent on its website; and 9.3(b)(iii) update this summary on a regular basis (at least every 3 months). BSO s Website BSO s Website BSO s Website Audit findings/recommendations A copy of this consent, as currently modified, was available on BSO s website at the time of preparing this report Copies of quarterly monitoring reports and AEMR s were available on BSO s website at the time of preparing this report Copies of quarterly monitoring reports were available on BSO s website at the time of preparing this report 10 Community consultation/obligations - - - 10.1 Community consultation - - - 10.1(a) 10.1(a)(i) 10.1(a)(ii) Complaints The Environmental Officer(s) (refer condition 3.1) shall be responsible: for the receipt of complaints with respect to construction works and mine operations on a dedicated and publicly advertised telephone line, 24 hours per day 7 days per week, the entering of complaints or comments in an up to date log book, and ensuring that a response is provided to the complainant within 24 hours; and providing a report of complaints received every six months throughout the life of the project to the Director-General, SSC, OEH, DRE and CCC, or as otherwise agreed by the Director- General. A summary of this report shall be included in the AEMR (condition 9.1(a)). - - - Xstrasafe Database 2009 AEMR 2010 AEMR 2011 AEMR Electronic BSO utilise Xstrata s Xstrasafe Electronic Database for the management of complaints. An example of a previous complaint was reviewed via Xstrasafe. A trial complaint was sent to 1800 332 693 at the time of the site inspection and a text message was forwarded to each of the Bulga Environmental Officers for action. Examples of six monthly report of complaints forwarded to agencies were observed, e.g. 2 August 2010. Draft six monthly report of complaints for July 2012 were observed but not yet submitted to agencies. Some ambiguity exists on whose responsibility it is at BSO to issue six monthly report of complaints to agencies. e.g. 2011 AEMR Section 4.1 provides a /noncompliant NC032 R031: BSO should revise position descriptions and responsibilities within the EMS to allocated six monthly complaints reporting by the BSO Environmental

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed 10.1(b) 10.1(b)(i) Community consultative committee The Applicant shall: establish a Community Consultative Committee and ensure that the first meeting is held before the commencement of construction works. Selection of representatives shall be agreed by the Director-General and the appointment of an independent Chairperson shall be to the satisfaction of the Director-General in consultation with the Applicant and SSC. The Committee shall comprise representatives of the Applicant (including an Environmental Officer, condition 3.1), one (1) representative of SSC, and four community representatives, to monitor compliance with conditions of this consent and other matters relevant to the operation of the mine during the term of the consent. The formation of the Committee may consider its interrelationship with any existing Consultative Committees of adjoining mines. Representatives from relevant government agencies (including DUAP) or other authorities may be invited to attend meetings as required by the Chairperson. The Committee may make comments and recommendations about the implementation of the development and environmental management plans. The Applicant shall ensure that the Committee has access to the necessary plans for such purposes. The Applicant shall consider the recommendations and comments of the Committee and provide a response to the Committee and Director-General on matters arising. Audit findings/recommendations summary of the complaints received during the past year for the Bulga Complex. Table 4.1 of the 2011 AEMR compares these complaints to the number of complaints received in previous years - - - Minutes of CCC Meeting dated 30 Oct 2012 CCC comprises of representative from BSO, SSC, and four community representatives The meetings are chaired by a councilor from Singleton Shire Council with government representatives periodically attending meetings. Minutes of CCC Meetings for 2010 and 2011 were available on BSO s website at the time of preparing this report 10.1(b)(ii) The Applicant shall, at its own expense: - - - 10.1(b)(ii)(a) nominate representatives to attend all meetings of the Committee; Minutes of CCC Meeting dated 30 Oct 2012 Nine Xstrata staff attended this October 2012 CCC meeting /noncompliant Manager

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed Audit findings/recommendations /noncompliant 10.1(b)(ii)(b) provide to the Committee regular information on the progress of work and monitoring results; Minutes of CCC Meeting dated 30 Oct 2012 Minutes document information being provided on the progress of work and monitoring results 10.1(b)(ii)(c) promptly provide to the Committee such other information as the Chair of the Committee may reasonably request concerning the environmental performance of the development; Minutes of CCC Meeting dated 31 Oct 2011 Action 1 was to distribute blast fume health study. Presentation of blast fume health study was observed during the site inspection 10.1(b)(ii)(d) provide access for site inspections by the Committee; Agenda for CCC Meeting dated 31 Oct 2011 CCC is offered access for site inspection 10.1(b)(ii)(e) provide meeting facilities for the Committee, and take minutes of Committee meetings. These minutes shall be available for public inspection at SSC within 14 days of the meeting. Minutes of CCC Meeting dated 30 Oct 2012 Meetings held at BSO s offices 10.1(b)(iii) The Applicant shall establish a trust fund or other funding arrangement that may be agreed between the Applicant and the Committee, to be managed by the Chair of the Committee to facilitate the functioning of the Committee, and pay $2000 per annum to the fund or other agreed arrangement, for the duration of mining operations. The monies are to be used only as required for the engagement of consultants to interpret technical information and the like. The annual payment shall be indexed according to the Consumer Price Index (CPI) at the time of payment. The first payment shall be made by the date of the first Committee meeting. A record of finances of the trust fund or other agreed arrangement, during each year shall be provided to the Director-General and the Applicant, by the Chairperson, on the anniversary of the first payment. Any unspent monies shall be returned to the Applicant each year. - Not requested by CCC Not Yet Enacted 11 Deleted - - - 12 Further Approvals and Agreement - - - 12.1 Statutory requirements - - - 12.1(a) The Applicant shall ensure that all statutory requirements AHIP 1109043 Review of various documentation and the

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed including but not restricted to those set down by the Local Government Act 1993, Protection of the Environment Administration Act 1991, Protection of the Environment Operations Act 1997, National Parks and Wildlife Act 1974, and all other relevant legislation, Regulations, Australian Standards, Codes, Guidelines and Notices, Conditions, Directions, Notices and Requirements issued pursuant to statutory powers by the SSC, OEH, DRE, NOW, RTA, are fully met. AEMR s Annual Returns for EPL Audit findings/recommendations subsequent site inspection indicated that BSO know of, and have measures in place to comply with, statutory requirements. BSO utilise XCN and NSWMC legal updates to ensure the environmental team are kept abreast of legislative change and potential impacts on BSO s operations /noncompliant 12.1(b) Structural adequacy Detailed plans and specifications relating to the design and construction of any structural elements associated with the proposed development are to be submitted to the Principal Certifying Authority prior to the commencement of construction works. Such plans and specifications must be accompanied by certification provided by a practicing professional structural engineer or an accredited certifier certifying the structural adequacy of the proposed building design and compliance with the Building Code of Australia. Construction Certificates BSO have constructed the XRail facility and Igloos located at the Area Station Workshop and Main Workshop without construction certificates NC033 R032: BSO should obtain construction certificates for the XRail facility and Igloos 12.1(c) Verification of construction Upon completion of building works and prior to the issue of an occupation certificate, a certificate/s prepared by a suitably qualified person or a compliance certificate/s issued by an accredited certifier, is to be submitted to the Principal Certifying Authority certifying that the following building components, where relevant, have been completed in accordance with approved plans and specifications: Occupation Certificates BSO are occupying the XRail facility and Igloos located at the Area Station Workshop and Main Workshop without occupation certificates NC034 R033: As required, BSO should obtain occupation certificates for the XRail facility and Igloos 12.1(c)(i) footings; - BSO have constructed the XRail facility, Igloos located at the Area Station Workshop and Main Workshop and bunding in Area Station Fuel Tank Farm See R032 and R033 12.1(c)(ii) concrete structures, including ground floor and any subsequent floors, retaining walls and columns; - BSO have constructed the XRail facility, Igloos located at the Area Station Workshop and Main Workshop and bunding in Area Station Fuel Tank Farm See R032 and R033

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed Audit findings/recommendations 12.1(c)(iii) framing and roof structure; - BSO have constructed the XRail facility and Igloos located at the Area Workshop and Main Workshop 12.1(c)(iv) fire protection coverings to building elements required to comply with the Building Code of Australia; and - BSO have constructed the XRail facility, Igloos located at the Area Station Workshop and Main Workshop and bunding in Area Station Fuel Tank Farm 12.1(c)(v) mechanical ventilation. - BSO have constructed the XRail facility, Igloos located at the Area Station Workshop and Main Workshop and bunding in Area Station Fuel Tank Farm The certificate/s shall demonstrate at what stage of construction inspections were undertaken. - BSO have constructed the XRail facility, Igloos located at the Area Station Workshop and Main Workshop and bunding in Area Station Fuel Tank Farm Schedule 3 Additional Procedures - - - Notification of Landholders - - - 1. Within 1 month of the date of this modification, the Applicant shall notify the landowners of the land listed in Table 4 of schedule 2 in writing that they have the right to require the Applicant to acquire their land at any stage during the development. 2. If the results of monitoring required in schedule 2 identify that impacts generated by the development are greater than the impact assessment criteria in schedule 2, except where this is predicted in the EA, and except where a negotiated agreement has been entered into in relation to that impact, then the Applicant shall notify the Director-General and the affected landowners and tenants (including tenants of mine owned properties) accordingly, and provide quarterly monitoring results to each of these parties until the results show that the development is complying with the criteria in schedule 2. Letters from BSO dated 23 June 2010 Letters forwarded to landholders within one month - Impacts generated by the development are generally not greater than the impact assessment criteria /noncompliant See R032 and R033 See R032 and R033 See R032 and R033 See R032 and R033 Not Yet Enacted

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation Audit findings/recommendations /noncompliant reviewed Independent Review - - - 3. If a landowner considers the development to be exceeding the impact assessment criteria in schedule 2, then he/she may ask the Director-General in writing for an independent review of the impacts of the development on his/her land. - Landholder has not requested independent review Not Yet Enacted If the Director-General is satisfied that an independent review is warranted, the Applicant shall within 3 months of the Director-General advising that an independent review is warranted: (a) consult with the landowner to determine his/her concerns; (b) commission a suitably qualified, experienced and independent person, whose appointment has been approved by the Director-General, to conduct monitoring on the land, to: determine whether the development is complying with the relevant impact assessment criteria in schedule 2; and identify the source(s) and scale of any impact on the land, and the development s contribution to this impact; and (c) give the Director-General and landowner a copy of the independent review. 4. If the independent review determines that the development is complying with the relevant impact assessment criteria in schedule 2, then the Applicant may discontinue the independent review with the approval of the Director-General. 5. If the independent review determines that the development is not complying with the relevant impact assessment criteria in schedule 2, and that the development is primarily responsible for this non-compliance, then the Applicant shall: (a) implement all reasonable and feasible measures, in consultation with the landowner, to ensure that the development complies with the relevant criteria and conduct further monitoring to determine whether these measures ensure compliance; or (b) secure a written agreement with the landowner to allow exceedences of the criteria in schedule 2, - - Not Yet Enacted - - Not Yet Enacted

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed to the satisfaction of the Director-General. If the Applicant is unable to finalise an agreement with the landowner, then the landowner may refer the matter to the Director-General for resolution. Audit findings/recommendations /noncompliant If the additional monitoring referred to under paragraph (a) above determines that the development is complying with the relevant criteria in schedule 2, then the Applicant may discontinue the independent review with the approval of the Director-General. Land Acquisition - - - 6. Within 3 months of receiving a written request from a landowner with acquisition rights, the Applicant shall make a binding written offer to the landowner based on: 6.(a) the current market value of the landowner s interest in the property at the date of this written request, as if the property was unaffected by the development, having regard to the: existing and permissible use of the land, in accordance with the applicable planning instruments at the date of the written request; and presence of improvements on the property and/or any approved building or structure which has been physically commenced at the date of the landowner s written request, and is due to be completed subsequent to that date, but excluding any improvements that have resulted from the implementation of the additional noise mitigation measures in condition 6.3.4 of schedule 2; 6.(b) the reasonable costs associated with: relocating within the Singleton local government area, or to any other local government area determined by the Director-General; and obtaining legal advice and expert advice for determining the acquisition price of the land, and the terms upon which it is to be acquired; and - - Not Yet Enacted - - Not Yet Enacted - - Not Yet Enacted

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed 6.(c) reasonable compensation for any disturbance caused by the land acquisition process. However, if at the end of this period, the Applicant and landowner cannot agree on the acquisition price of the land, and/or the terms upon which the land is to be acquired, then either party may refer the matter to the Director-General for resolution. Upon receiving such a request, the Director-General shall request the President of the NSW Division of the Australian Property Institute (API) to appoint a qualified independent valuer to: (a) consider submissions from both parties; (b) determine a fair and reasonable acquisition price for the land and/or the terms upon which the land is to be acquired, having regard to the matters referred to in paragraphs (a)-(c) above; (c) prepare a detailed report setting out the reasons for any determination; and (d) provide a copy of the report to both parties and the Director-General. Within 14 days of receiving the independent valuer s report, the Applicant shall make a binding written offer to the landowner to purchase the land at a price not less than the independent valuer s determination. However, if either party disputes the independent valuer s determination, then within 14 days of receiving the independent valuer s report, they may refer the matter to the Director-General for review. Any request for a review must be accompanied by a detailed report setting out the reasons why the party disputes the independent valuer s determination. Following consultation with the independent valuer and both parties, the Director-General shall determine a fair and reasonable acquisition price for the land, having regard to the matters referred to in paragraphs (a)-(c) above, the independent valuer s report and the detailed report of the party Audit findings/recommendations /noncompliant - - Not Yet Enacted - - Not Yet Enacted

BULGA SURFACE OPERATIONS Application No. DA_41-03-99 Condition Subject Documentation reviewed that disputes the independent valuer s determination and any other relevant matters. Within 14 days of the Director-General s determination, the Applicant shall make a binding written offer to the landowner to purchase the land at a price not less than the Director- General s determination. Audit findings/recommendations /noncompliant If the landowner refuses to accept the Applicant s binding written offer under this condition within 6 months of the offer being made, then the Applicant's obligations to acquire the land shall cease, unless the Director-General determines otherwise. 7. The Applicant shall pay all reasonable costs associated with the land acquisition process described in condition 6 above. 8. If the Applicant and landowner agree that only part of the land shall be acquired, then the Applicant shall pay all reasonable costs associated with obtaining Council approval for any plan of subdivision (where permissible), and registration of the plan at the Office of the Registrar-General. - - Not Yet Enacted - - Not Yet Enacted

BULGA SURFACE OPERATIONS Table 2 Bulga Surface Operations Environment Protection Licence Environment Protection Licence 563 Condition Subject Documentation reviewed Audit findings/recommendations /noncompliant 1 Administrative Conditions A1.1 This license authorises the carrying out of the scheduled activities listed below at the premises specified in A2. The activities are listed according to their scheduled activity classification, fee-based activity classification and the scale of the operation. AEMR 2006 AEMR 2007 AEMR 2008 2009 9.1 MTPA 2010 8.6 MTPA 2011 10.0 MTPA Unless otherwise further restricted by a condition of this licence, the scale at which the activity is carried out must not exceed the maximum scale specified in this condition. A2 Premises or plant to which this license applies A2.1 The license applies to the following premises: EPL 563 The exploration and mining lease details do not reflect those held by the Bulga Complex as some leases have been relinquished NC035 Administrative R034: It is recommended that BSO prepare a License Variation to reflect the remaining mining leases held at the facility A3 Information supplied to the EPA

BULGA SURFACE OPERATIONS Environment Protection Licence 563 Condition Subject Documentation reviewed Audit findings/recommendations /noncompliant A3.1 Works and activities must be carried out in accordance with the proposal contained in the license application, except as expressly provided by a condition of this license. EPL 563 Site inspection indicates that works are generally being carried out in accordance with the license application In this condition the reference to "the license application" includes a reference to: a) the applications for any licenses (including former pollution control approvals) which this license replaces under the Protection of the Environment Operations (Savings and Transitional) Regulation 1998; and b) the license information form provided by the licensee to the EPA to assist the EPA in connection with the issuing of this license. 2 Discharges to Air and Water and Applications to Land P1 Location of monitoring/discharge points and areas P1.1 The following points referred to in the table below are identified in this license for the purposes of monitoring and/or the setting of limits for the emission of pollutants to the air from the point. 2009 AEMR 2010 AEMR 2011 AEMR 2010 Annual Return 2011 Annual Return 2009 Bulga Coal Complex operates a comprehensive air quality monitoring system composed of 30 depositional dust gauges, 3 high volume air samplers for total suspended particulates (TSP) and 4 High Volume Air Samplers (HVAS) for particulate matter (PM10). 2010 The air quality monitoring system at the Bulga Coal Complex consists of a combination of 30 Dust Deposition Gauges and 6 High Volume Air Samplers (HVAS). Three of the HVAS used by the Bulga Coal Complex record Total Suspended Particulates (TSP) whilst five record Particulate Matter less than ten microns in diameter (PM10). 2011 The air quality monitoring system at the Bulga Coal Complex consists of a combination of 30 Dust Deposition Gauges and 6 High Volume Air

BULGA SURFACE OPERATIONS Environment Protection Licence 563 Condition Subject Documentation reviewed Audit findings/recommendations Samplers (HVAS). Three of the HVAS used by the Bulga Coal Complex record Total Suspended Particulates (TSP) whilst five record Particulate Matter less than ten microns in diameter (PM10) /noncompliant P1.2 The following points referred to in the table are identified in this license for the purposes of the monitoring and/or the setting of limits for discharges of pollutants to water from the point. - - - P1.3 The following utilisation areas referred to in the table below are identified in this license for the purposes of the monitoring and/or the setting of limits for any application of solids or liquids to the utilisation area. 2009 AEMR 2010 AEMR 2011 AEMR While BSO are licensed to discharge from three points they elect to discharge from one point only. Monitoring location is the HRSTS discharge point on Dam 3 (Swan Lake) 3 Limit Conditions - - - L1 Pollution of waters - - - L1.1 Except as may be expressly provided in any other condition of this license, the licensee must comply with section 120 of the Protection of the Environment Operations Act 1997. Various correspondence between BSO and EPA October 2011 Tailings Incident Prosecution Pending under S120 POEO Act Not Yet Determined L2 Concentration limits L2.1 For each monitoring/discharge point or utilisation area specified in the table\s below (by a point number), the concentration of a pollutant discharged at that point, or applied to that area, must not exceed the concentration limits specified for that pollutant in the 2009 AEMR 2010 AEMR 2011 AEMR Water Quality Monitoring and during HRSTS discharge

BULGA SURFACE OPERATIONS Environment Protection Licence 563 Condition Subject Documentation reviewed table. 2009 Annual Return 2010 Annual Return 2011 Annual Return Audit findings/recommendations /noncompliant L2.2 Where a ph quality limit is specified in the table, the specified percentage of samples must be within the specified ranges. 2009 AEMR 2010 AEMR Water Quality Monitoring and during HRSTS discharge 2011 AEMR 2009 Annual Return 2010 Annual Return 2011 Annual Return L2.3 To avoid any doubt, this condition does not authorise the pollution of waters by any pollutant other than those specified in the table\s. 2009 AEMR 2010 AEMR Water Quality Monitoring and during HRSTS discharge 2011 AEMR 2009 Annual Return 2010 Annual Return 2011 Annual Return L2.4 Water and/or Land Concentration Limits 2009 AEMR 2010 AEMR 2011 AEMR 2009 Annual Return 2010 Annual Return Water Quality Monitoring during HRSTS discharge

BULGA SURFACE OPERATIONS Environment Protection Licence 563 Condition Subject Documentation reviewed 2011 Annual Return Audit findings/recommendations /noncompliant L3 Volume and mass limits L3.1 For each discharge point or utilisation area specified below (by a point number), the volume/mass of: a) liquids discharged to water; or; b) solids or liquids applied to the area; must not exceed the volume/mass limit specified for that discharge point or area. 2009 AEMR 2010 AEMR 2011 AEMR 2009 Annual Return 2010 Annual Return Water flow rate monitoring during HRSTS discharge 2011 Annual Return L4 Waste L4.1 The licensee must not cause, permit or allow any waste to be received at the premises, except the wastes expressly referred to in the column titled "Waste" and meeting the definition, if any, in the column titled "Description" in the table below. Site Inspection The site inspection indicated that there was no evidence of waste being received at the property Any waste received at the premises must only be used for the activities referred to in relation to that waste in the column titled "Activity" in the table below. Any waste received at the premises is subject to those limits or conditions, if any, referred to in relation to that waste contained in the column titled "Other Limits" in the table below. This condition does not limit any other conditions in this license.

BULGA SURFACE OPERATIONS Environment Protection Licence 563 Condition Subject Documentation reviewed Audit findings/recommendations /noncompliant L5 Blasting - - - L5.1 The airblast overpressure level from blasting operations in or on the premises must not exceed: a) 115 db(lin Peak) for more than 5% of the total number of blasts during each reporting period; or. b) 120 db(lin Peak) at any time at any affected residence or noise sensitive location that is not owned by the licensee or subject of a private agreement between the owner of the residence or noise sensitive location and the licensee as to an alternative overpressure level. L5.2 The ground vibration peak particle velocity from blasting operations carried out in or on the premises must not exceed: a) 5mm/second for more than 5% of the total number of blasts carried out on the premises during each reporting period; or b) 10mm/second at any time at any affected residence or noise sensitive location that is not owned by the licensee or subject of a private agreement between the owner of the residence or noise sensitive location and the 2009 AEMR 2010 AEMR 2011 AEMR 2009 AEMR 2010 AEMR 2011 AEMR 2009 was 0.8% of blasts less than 5% 2010 three occasion less than 5% 2011 two occasion less than 5% Exceedance of 115 db (Lin Peak) noise level did not occur for greater than 5% of the total number of blasts over the 12 month period. Measured over blast exceedance of the 120 db (Lin Peak) noise level on 4 April 2009 and 3 November 2009 as reported to NSW EPA. Reinforcement of BVMP with operations has seen a substantial decrease in blast related incidents since 2009, BVMP has also been revised in 2011 No exceedences identified in the blasting monitoring data NC028 R027: Continue to monitor and implement the BVMP

BULGA SURFACE OPERATIONS Environment Protection Licence 563 Condition Subject Documentation reviewed licensee as to an alternative ground vibration level. Audit findings/recommendations /noncompliant 4 Operating Conditions - - - O1 Activities must be carried out in a competent manner - - - O1.1 Licensed activities must be carried out in a competent manner. This includes: a) the processing, handling, movement and storage of materials and substances used to carry out the activity; and Various BSO Management Plans Activities observed during site inspection appeared to be undertaken in a competent manner b) the treatment, storage, processing, reprocessing, transport and disposal of waste generated by the activity. O2 Maintenance of plant and equipment - - - O2.1 All plant and equipment installed at the premises or used in connection with the licensed activity: a) must be maintained in a proper and efficient condition; and b) must be operated in a proper and efficient manner. Various BSO Management Plans associated with plant maintenance Plant and equipment observed during site inspection appeared to be maintained and operated in a proper and efficient competent manner. 8:30am meeting illustrated focus of plant equipment maintenance. Area tank farm recently bunded and oil water separation equipment installed O3 Dust - - - O3.1 The premises must be maintained in a condition which minimises or prevents the emission of dust from the premises. Draft Dust Management Plan dated Dec 2012 Significant areas of rehabilitation recently completed. Use of RST as dust suppressant on haul roads. Site Inspection confirmed premises are maintained in a condition that minimises dust emissions O3.2 All trafficable areas, coal storage areas and vehicle maneuvering areas in or on the premises must be maintained, at all times, in a condition that will minimise the generation, or emission from the premises, of wind-blown or traffic generated dust. Draft Dust Management Plan dated Dec 2012 Use of RST as dust suppressant on haul roads. Main haul roads appeared well maintained. Coal product stockpile water sprinkler dust suppression system observed operating during site inspection. Site inspection confirmed trafficable areas, coal storage areas, open areas and stockpiles were

BULGA SURFACE OPERATIONS Environment Protection Licence 563 Condition Subject Documentation reviewed Audit findings/recommendations maintained in a condition that minimises dust emissions /noncompliant 5 Monitoring and Recording Conditions - - - M1 Monitoring records - - - M1.1 The results of any monitoring required to be conducted by this license or a load calculation protocol must be recorded and retained as set out in this condition. M1.2 All records required to be kept by this license must be: a) in a legible form, or in a form that can readily be reduced to a legible form; b) kept for at least 4 years after the monitoring or event to which they relate took place; and c) produced in a legible form to any authorised officer of the EPA who asks to see them. EMD Monitoring records well maintained in EMD EMD Monitoring records well maintained in EMD M1.3 The following records must be kept in respect of any samples required to be collected for the purposes of this license: a) the date(s) on which the sample was taken; EMD Monitoring records well maintained in EMD, including the date, time, point and name of person recorded on Chain of Custody forms b) the time(s) at which the sample was collected; c) the point at which the sample was taken; and d) the name of the person who collected the sample. M2 Requirement to monitor concentration of pollutants discharged - - - M2.1 For each monitoring/discharge point or utilisation area specified below (by a point number), the licensee must monitor (by sampling and obtaining results by analysis) the concentration of each pollutant specified in Column 1. The licensee must use the sampling method, units of measure, and sample at the frequency, specified opposite in the other columns: - - - M2.2 Air Monitoring Requirements 2009 AEMR 2010 AEMR 2011 AEMR 2009 Annual BSO undertakes types of air quality monitoring on site and at various offsite receptors in accordance with these requirements

BULGA SURFACE OPERATIONS Environment Protection Licence 563 Condition Subject Documentation reviewed Return 2010 Annual Return 2011 Annual Return Quarterly Monitoring Report on website Audit findings/recommendations /noncompliant M2.3 Water and/ or Land Monitoring Requirements 2009 AEMR 2010 AEMR 2011 AEMR 2009 Annual Return 2010 Annual Return 2011 Annual Return Water Quality Monitoring during HRSTS discharge M3 Testing methods- concentration limits M3.1 Monitoring for the concentration of a pollutant emitted to the air required to be conducted by this licence must be done in accordance with: a) any methodology which is required by or under the Act to be used for the testing of the concentration of the pollutant; or Project Management Quality Plan dated 5 May 2008 This PMQP includes a quality assurance/quality control plan for BSO s monitoring program. BSO has the PMQP to be updated next year b) if no such requirement is imposed by or under the Act, any methodology which a condition of this license requires to be used for that testing; or c) if no such requirement is imposed by or under the Act or by a condition of this licence, any methodology approved in writing by the EPA for the purposes of that testing prior to the testing taking place.

BULGA SURFACE OPERATIONS Environment Protection Licence 563 Condition Subject Documentation reviewed Audit findings/recommendations /noncompliant M3.2 Subject to any express provision to the contrary in this licence, monitoring for the concentration of a pollutant discharged to waters or applied to a utilisation area must be done in accordance with the Approved Methods Publication unless another method has been approved by the EPA in writing before any tests are conducted. Note: The Protection of the Environment Operations (Clean Air) Regulation 2010 requires testing for certain purposes to be conducted in accordance with test methods contained in the publication "Approved Methods for the Sampling and Analysis of Air Pollutants in NSW'. Project Management Quality Plan dated 5 May 2008 Audit of CBE by Simon Lewer dated Oct-Dec 2009 This PMQP includes a quality assurance/quality control plan for BSO s monitoring program. Monitoring contractor is audited against the PMQP. BSO has the PMQP to be updated next year M4 Recording of pollution complaints - - - M4.1 The licensee must keep a legible record of all complaints made to the licensee or any employee or agent of the licensee in relation to pollution arising from any activity to which this license applies. Xstrasafe Electronic Database BSO utilise Xstrata s Xstrasafe Electronic Database for the management of complaints. An example of a previous complaint was reviewed via Xstrasafe. M4.2 The record must include details of the following: a) the date and time of the complaint; b) the method by which the complaint was made; c) any personal details of the complainant which were provided by the complainant or, if no such details were provided, a note to that effect; Xstrasafe Electronic Database BSO utilise Xstrata s Xstrasafe Electronic Database for the management of complaints. Complaint records contain the relevant complaint data d) the nature of the complaint; e) the action taken by the licensee in relation to the complaint, including any follow-up contact with the complainant; and f) if no action was taken by the licensee, the reasons why no action was taken. M4.3 The record of a complaint must be kept for at least 4 years after the complaint was made. Xstrasafe Electronic Database Records of complaints are maintained for the life of the facility M4.4 The record must be produced to any authorised officer of the EPA who asks to see them. - Authorised officer of the EPA has not requested complaints records Not Yet Enacted

BULGA SURFACE OPERATIONS Environment Protection Licence 563 Condition Subject Documentation reviewed Audit findings/recommendations /noncompliant M5 Telephone complaints line - - - M5.1 The licensee must operate during its operating hours a telephone complaints line for the purpose of receiving any complaints from members of the public in relation to activities conducted at the premises or by the vehicle or mobile plant, unless otherwise specified in the license. BSO Webpage Cockfighter local newspaper BSO Newsletters 1800 332 693 M5.2 The licensee must notify the public of the complaints line telephone number and the fact that it is a complaints line so that the impacted community knows how to make a complaint. BSO Webpage Cockfighter local newspaper BSO notify the public of the complaints line telephone number via a range of media BSO Newsletters M5.3 The preceding two conditions do not apply until 3 months after: a) the date of the issue of this license or b) if this license is a replacement license within the meaning of the Protection of the Environment Operations (Savings and Transitional) Regulation 1998, the date on which a copy of the licence was served on the licensee under clause 10 of that regulation. - Telephone Complaints Line implemented M6 Requirement to monitor volume or mass - - - M6.1 For each discharge point or utilisation area specified below, the licensee must monitor: a) the volume of liquids discharged to water or applied to the area; b) the mass of solids applied to the area; c) the mass of pollutants emitted to the air; at the frequency and using the method and units of measure, specified below. 2009 AEMR 2010 AEMR 2011 AEMR HRSTS 2009 HRSTS 2010 HRSTS 2011 Water flow rate monitoring during HRSTS discharge M7 Blasting - - - M7.1 To determine compliance with condition(s) L5.1 and L5.2 a) Airblast overpressure and ground vibration levels must be 2009 AEMR Monitoring of over blast and vibration undertaken in accordance with requirements of M7.1

BULGA SURFACE OPERATIONS Environment Protection Licence 563 Condition Subject Documentation reviewed measured at any affected residence or noise sensitive location that is not owner by the licensee or subject of a private agreement between the owner of the residence or noise sensitive location and the licensee as to an alternative overpressure or ground vibration level for all blasts carried out in or on the premises; and b) Instrumentation used to measure the airblast overpressure and ground vibration must meet the requirements of Australian Standard AS 2187.2-2006. 2010 AEMR 2011 AEMR BSO s Website and Quarterly Monitoring Results Audit findings/recommendations /noncompliant M8 Other monitoring and recording conditions - - - M8.1 HRSTS Monitoring The licensee must continuously operate and maintain communication equipment which makes the conductivity and flow measurements, taken at Point 2 available to the "Service provider" Within one hour of those measurements being taken and makes them available in the format specified in the "Hunter River Salinity Trading Scheme Discharge Point Site Equipment" as published by the Department of Land and Water Conservation on 7 May 2002. - Per Coms Simon Lewer of Gauge Industrial, communication equipment provides NSW Office of Water with HRSTS data within one hour M8.2 The licensee must ensure that all monitoring data is within a margin of error of 5% for conductivity measurements and 10% for discharge flow measurement. Hard copies of calibration certificates Calibration certification certificate s for HRSTS conductivity and flow rate monitoring equipment held on site M8.3 The licensee must mark monitoring point 2 with a sign which clearly indicates the name of the licensee, whether the monitoring point is up or down stream of the discharge point and that it is a monitoring point for the Hunter River Salinity Trading Scheme. 6 Reporting Conditions - Observed as marked in previous 2006 audit. Observed during site inspection R1 Annual return documents R1.1 The licensee must complete and supply to the EPA an Annual Return in the approved form comprising: a) a Statement of Compliance; and b) a Monitoring and Complaints Summary. At the end of each reporting period, the EPA will provide to the licensee a copy of the form that must be completed and returned to 2009 Annual Return 2010 Annual Return 2011 Annual Return The Annual Return completed and supplied to the EPA contained a Statement of Compliance and a Monitoring and Complaints Summary

BULGA SURFACE OPERATIONS Environment Protection Licence 563 Condition Subject Documentation reviewed the EPA Audit findings/recommendations /noncompliant R1.2 An Annual Return must be prepared in respect of each reporting period, except as provided below. 2009 Annual Return Documentation complies with requirements Note: The term "reporting period" is defined in the dictionary at the end of this license. Do not complete the Annual Return until after the end of the reporting period. 2010 Annual Return 2011 Annual Return R1.3 Where this license is transferred from the licensee to a new licensee: a) the transferring licensee must prepare an Annual Return for the period commencing on the first day of the reporting period and ending on the date the application for the transfer of the license to the new licensee is granted; and b) the new licensee must prepare an Annual Return for the period commencing on the date the application for the transfer of the license is granted and ending on the last day of the reporting period. - No transfer of licensee to a new licensee Not Applicable Note: An application to transfer a license must be made in the approved form for this purpose. R1.4 Where this license is surrendered by the licensee or revoked by the EPA or Minister, the licensee must prepare an Annual Return in respect of the period commencing on the first day of the reporting period and ending on: a) in relation to the surrender of a license -the date when notice in writing of approval of the surrender is given; or b) in relation to the revocation of the license- the date from which notice revoking the license operates. - The EPL was not surrendered by the licensee or revoked by the EPA or Minister Not Applicable R1.5 The Annual Return for the reporting period must be supplied to the EPA by registered post not later than 60 days after the end of each reporting period or in the case of a transferring license not later than 60 days after the date the transfer was granted (the 'due date'). Annual Return 2009 Annual Return 2010 Given an anniversary date of 20 July for EPL 563, the EPL annual return is due by the 18 th of September each year. Annual return submission date was extended Annual Return Review of past EPL annual return submission dates

BULGA SURFACE OPERATIONS Environment Protection Licence 563 Condition Subject Documentation reviewed 2011 Email Steve Clair dated 16 Sept 2011 Audit findings/recommendations confirms that while returns were submitted in September they were submitted after 60 days. /noncompliant R1.6 The licensee must retain a copy of the Annual Return supplied to the EPA for a period of at least 4 years after the Annual Return was due to be supplied to the EPA. EMD Records maintained on EMD, internal network and hard copies on site R1.7 Within the Annual Return, the Statement of Compliance must be certified and the Monitoring and Complaints Summary must be signed by: a) the license holder; or Annual Return 2009 Annual Return 2010 2011 Annual Return included signature of director and company secretary b) by a person approved in writing by the EPA to sign on behalf of the license holder. Annual Return 2011 R1.8 A person who has been given written approval to certify a certificate of compliance under a license issued under the Pollution Control Act 1970 is taken to be approved for the purpose of this condition until the date of first review of this license. - General condition R2 Notification of environmental harm - - - R2.1 Notifications -must be made by telephoning the Environment Line service on 131 555. - Verbal notification was provided for both tailings Oct 2011 and dirty water March 2011 discharges R2.2 The licensee must provide written details of the notification to the EPA within 7 days of the date on which the incident occurred. Note: The licensee or its employees must notify all relevant authorities of incidents causing or threatening material harm to the environment immediately after the person becomes aware of the incident in accordance with the requirements of Part 5.7 of the Act. Email from EPA dated 23 March 2012 Letter from EPA date 23 March 2012 Bulga Coal Water Discharge 14 March 2011 Letter dated 29 March 2011 EPA provided extension to seven days reporting period to 30 March 2011. Written notification was provided for dirty water event within extended notification period on 29 March 2011. Letter from EPA confirmed written notification by 18 Oct 2011. Email from BSO provided notification report on 18 Oct 2011 Email BSO dated

BULGA SURFACE OPERATIONS Environment Protection Licence 563 Condition Subject Documentation reviewed 29 March 2011 Audit findings/recommendations /noncompliant Letter from EPA date 11 Oct 2011 Email from BSO 18 Oct 2011 Bulga Coal Tailings Line Incident 9 Oct 2011 Letter dated 18 Oct 2011 R3 Written report - - - R3.1 Where an authorised officer of the EPA suspects on reasonable grounds that: a) where this license applies to premises, an event has occurred at the premises; or b) where this license applies to vehicles or mobile plant, an event has occurred in connection with the carrying out of the activities authorised by this license, Letter from EPA date 23 March 2012 Letter from EPA date 11 Oct 2011 EPA required written reports for both tailings and dirty water events and the event has caused, is causing or is likely to cause material harm to the environment (whether the harm occurs on or off premises to which the licence applies), the authorised officer may request a written report of the event. R3.2 The licensee must make all reasonable inquiries in relation to the event and supply the report to the EPA within such time as may be specified in the request. R3.3 The request may require a report which includes any or all of the following information: a) the cause, time and duration of the event; b) the type, volume and concentration of every pollutant discharged as a result of the event; c) the name, address and - See R2.2 above - See R2.2 above

BULGA SURFACE OPERATIONS Environment Protection Licence 563 Condition Subject Documentation reviewed business hours telephone number of employees or agents of the licensee, or a specified class of them, who witnessed the event; d) the name, address and business hours telephone number of every other person (of whom the licensee is aware) who witnessed the event, unless the licensee has been unable to obtain that information after making reasonable effort; e) action taken by the licensee in relation to the event, including any follow-up contact with any complainants; f) details of any measure taken or proposed to be taken to prevent or mitigate against a recurrence of such an event; and g) any other relevant matters. Audit findings/recommendations /noncompliant R3.4 The EPA may make a written request for further details in relation to any of the above matters if it is not satisfied with the report provided by the licensee. The licensee must provide such further details to the EPA within the time specified in the request. - See R2.2 above R4 Other reporting conditions - - - R4.1 Reporting blasting limit exceedence The licensee must report any exceedence of the license blasting limits to the regional office of the EPA as soon as practicable after the exceedence becomes known to the licensee or to one of the licensee's employees or agents. Letter from BSO dated 9 April 2009 Letter from BSO dated 10 Nov 2009 2 blast exceedences in 2009 were reported to EPA R4.2 HRSTS Reporting HRSTS 2009 Reports reviewed during site inspection The licensee must compile a written report of the activities under the Scheme for each scheme year. The scheme year shall run from 1 July to 30 June each year. The written report must be submitted to the EPA's regional office within 60 days after the end of each scheme year and be in a form and manner approved by the EPA. The information will be used by the EPA to compile an annual scheme report. HRSTS 2010 HRSTS 2011 7 General Conditions G1 Copy of license kept at the premises or plant EPL 563 Copy of EPL maintained at premises and on BSO

BULGA SURFACE OPERATIONS Environment Protection Licence 563 Condition Subject Documentation reviewed Audit findings/recommendations website /noncompliant G1.1 A copy of this license must be kept at the premises to which the licence applies. EPL 563 Copy of EPL maintained at premises and on BSO website G1.2 The license must be produced to any authorised officer of the EPA who asks to see it. EPL 563 Copy of EPL maintained at premises and on BSO website G1.3 The license must be available for inspection by any employee or agent of the licensee working at the premises. EPL 563 Copy of EPL maintained at premises and on BSO website 8 Pollution Studies and Reduction Programs - - - U1 Coal Mine Particulate Matter Control Best Practice - - - U1.1 The Licensee must conduct a site specific Best Management Practice (BMP) determination to identify the most practicable means to reduce particle emissions. Coal Mine Particulate Matter Control Best Management Practice Determination dated 20 June 2012 Study has been undertaken U1.2 The Licensee must prepare a report which includes, but is not necessarily limited to, the following: identification, quantification and justification of existing measures that are being used to minimise particle emissions; identification, quantification and justification of best practice measures that could be used to minimise particle emissions; evaluation of the practicability of implementing these best practice measures; and a proposed timeframe for implementing these best practice measures. Coal Mine Particulate Matter Control Best Management Practice Determination dated 20 June 2012 Study has been undertaken In preparing the report, the Licensee must utilise the document entitled Coal Mine Particulate Matter Control Best Practice- Site Specific Determination Guideline- November 2011. U1.3 All cost related information is to be included as Appendix 1 of the Report required by condition U1.2 above. Letter from EPA dated 27 Jan 2012 EPA confirmed costs not required

BULGA SURFACE OPERATIONS Environment Protection Licence 563 Condition Subject Documentation reviewed U1.4 The Report required by condition U1.2 must be submitted by the Licensee to the Office of Environment and Heritage's Regional Manager Hunter, at PO Box 488G, NEWCASTLE WEST 2302 by 29 June 2012. Email from BSO dated 28 June 2012 Audit findings/recommendations Report provided to Environment and Heritage's Regional Manager /noncompliant U1.5 The report required by condition U1.2 above, except for cost related information contained in Appendix 1 of the Report, must be made publicly available by the Licensee on the Licensee's website by 6 July 2012. Email from BSO dated 28 June 2012 Report was submitted U2 Premises Noise Limits - - - U2.1 The licensee must conduct a noise assessment in accordance with the document, 'NSW industrial Noise Policy', (EPA, 2000) for the operations and activities carried out at the licensed premises and submit a report to the Manager, Hunter Region, by no later than 28 September 2012. Pollution Reduction Program Environmental Noise, Global Acoustics dated 28 Sep 2012 Pollution Reduction Report submitted to EPA on 28 Sept 2012 U2.2 The report referred to in condition U2.1 must include, but is not limited to the following: - - - U2.2 (1) Project Specific Noise Levels for the nearest noise sensitive receiver location(s). The project specific noise levels may be sourced from recent documentation submitted in support of a project approval application, or determined specifically in response to this condition, provided that: (a) The source of the project specific noise levels are stated; (b) The project specific noise levels have been derived in accordance with the NSW Industrial Noise Policy (EPA 2000), ("INP"); Pollution Reduction Program Environmental Noise, Global Acoustics dated 28 Sep 2012 Section 3.1 of the PRP Report provides project specific noise levels for the nearest noise sensitive receivers (c) Details are provided of how the project specific noise levels have been derived; and (d) The nearest noise sensitive receiver locations chosen are representative of those potentially most affected by noise from the premises. U2.2 (2) Predicted or measured noise level contributions for the noise sensitive receiver locations identified in U2.2-1 above as a result of Pollution Reduction Section 3.2 of the PRP Report provides Predicted or measured noise level contributions for the noise

BULGA SURFACE OPERATIONS Environment Protection Licence 563 Condition Subject Documentation reviewed all activities and operations carried out at the premises. These may be sourced from recent documentation submitted in support of a project approval or determined specifically in response to this conditions provided that: (a) The source of the predicted or measured noise level(s) are stated; (b) Noise levels have been predicted or measured in accordance with the INP; and (c) Details of how the noise levels have been predicted are provided. Program Environmental Noise, Global Acoustics dated 28 Sep 2012 Audit findings/recommendations sensitive receiver locations /noncompliant U2.2 (3) Noise limits proposed for the location(s) identified in U2.2-1 above, derived with regard to the project specific noise levels and predicted noise level contributions from U2.2-1 and U2.2-2 above, that can be placed on the licence, for all activities and operations carried out at the premises. Pollution Reduction Program Environmental Noise, Global Acoustics dated 28 Sep 2012 Section 3.3 of the PRP Report limits proposed for the sensitive receiver locations U2.2 (4) Details of methods to be used to determine compliance with limits in U2.2-3 above. Pollution Reduction Program Environmental Noise, Global Acoustics dated 28 Sep 2012 Section 3.4 of the PRP Report provides details of methods to be used to determine compliance with limits 9 Special Conditions - - - E1 Hunter River Salinity Trading Scheme - - - E1.1 This license authorises the discharge of saline water into the Hunter River Catchment from an authorised discharge point (or points), in accordance with the Protection of the Environment Operations (Hunter River Salinity Trading Scheme) Regulation 2002. - Point 2 or Swan Lake (Dam 3) discharge E1.2 For the purposes of Clauses 23 and 29 of the Protection of the Environment Operations (Hunter River Salinity Trading Scheme) Regulation 2002 the licensee must apply the conversion factor of HRSTS Calculation Spreadsheet During the site inspection a spread sheet including the conversion factor was reviewed. Factor also audited by Simon Lewer from Lewer

BULGA SURFACE OPERATIONS Environment Protection Licence 563 Condition Subject Documentation reviewed 0.6. Environmental Audit Report from Lewer Gauge Industrial and Environmental dated March 2010 Audit findings/recommendations Gauge Industrial and Environmental /noncompliant

BULGA SURFACE OPERATIONS Table 3 Bulga Surface Operations Mining Lease Mining Lease No. 1547 Condition Subject Documentation reviewed Audit findings/recommendations /noncompliant 1 EXTRACTION OF COAL - - - The lease holder shall extract as large a percentage of the coal in the subject area as is practicable consistent with the provisions of the Coal Mines Regulations Act 1982 and the Regulations thereunder and shall comply with any direction given or which may be given in this regard by the Minister. 2 MINING, REHABILITATION, ENVIRONMENTAL MANAGEMENT PROCESS (MREMP) MINING OPERATIONS PLAN (MOP) 2(1) Mining operations, including mining purposes, must be conducted in accordance with a Mining Operations Plan (the Plan) satisfactory to the Director-General. The Plan together with environmental conditions of development consent and other approvals will form the basis for:- (a) ongoing mining operations and environmental management; and (b) ongoing monitoring of the project. 2(2) The Plan must be prepared in accordance with the Director- General's guidelines current at the time of lodgment. Bulga Coal Surface Operations Mining Operation Plan Jan 2006 to Dec 2012 as amended and approved The MOP and subsequent amendments have been accepted by the DG of DRE - - - Bulga Coal Surface Operations Mining Operation Plan Jan 2006 to Dec 2012 as amended and approved Vaux Pit MOP Letter from DRE dated 12th Dec 2011 MOP Extension Letter from DPI dated 6th June 2012 Bulga Coal Surface Operations Mining Operation Plan The MOP and subsequent amendments have been accepted by the DG of DRE. MOP is periodically revised as required. DRE has approved the extension of the current MOP until December 2013. The MOP is generally consistent with the site EMPs. The MOP provides the basis for implementing environmental management and ongoing monitoring of mining operations MOP appear to be prepared in accordance with Guidelines to the Mining, Rehabilitation and Environmental Management Process EDGO3

BULGA SURFACE OPERATIONS Mining Lease No. 1547 Condition Subject Documentation reviewed Jan 2006 to Dec 2012 as amended and approved 2(3) A Plan must be lodged with the Director-General:- (a) prior to the commencement of operations; (b) subsequently as appropriate prior to the expiry of any current Plan; and (c) in accordance with any direction issued by the Director- General. 2(4) The Plan must present a schedule of proposed mine development for a period of up to seven (7) years and contain diagrams and documentation which identify:- (a) area(s) proposed to be disturbed under the Plan; (b) mining and rehabilitation method(s) to be used and their sequence; (c) (d) (e) (f) areas to be used for disposal of tailings/waste; existing and proposed surface infrastructure; progressive rehabilitation schedules; areas of particular environmental sensitivity; (g) water management systems (including erosion and sediment controls); (h) proposed resource recovery; and Bulga Coal Surface Operations Mining Operation Plan Jan 2006 to Dec 2012 as amended and approved Vaux Pit MOP Letter from DRE dated 12th Dec 2011 MOP Extension Letter from DPI dated 6th June 2012 Bulga Coal Surface Operations Mining Operation Plan Jan 2006 to Dec 2012 as amended and approved Audit findings/recommendations The MOP and subsequent amendments have been accepted by the DG of DRE MOP contains plans which illustrate areas to be disturbed. MOP contains plans which illustrate mining and rehabilitation and their sequence. The MOP contains plans which illustrate disposal of tailings/waste in Deep Pit but did not contain details of the old tailings dam. The MOP contains plans which illustrate existing and proposed surface infrastructure. The MOP contains plans which illustrate areas of particular environmental sensitivity. MOP contains plans which generally illustrate a number of water management systems observed during the site inspection /noncompliant NC036 Administrative R035: BSO should update the MOP to reflect all water management systems on site (including the old tailings dam)

BULGA SURFACE OPERATIONS Mining Lease No. 1547 Condition Subject Documentation reviewed (i) where the mine will cease extraction during the term of the Plan, a closure plan including final rehabilitation objectives/methods and post mining land use/vegetation 2(5) The Plan when lodged will be reviewed by the Department of Mineral Resources. 2(6) The Director-General may within two (2) months of the lodgement of a Plan, require modification and relodgement. 2(7) If a requirement in accordance with clause (6) is not issued within two months of the lodgement of a Plan, lease holder may proceed with implementation of the Plan submitted subject to the lodgement of the required security deposit within the specified time. 2(8) During the life of the Mining Operations Plan, proposed modifications to the Plan must be lodged with the Director-General and will be subject to the review process outlined in clauses (5) - (7) above. Bulga Coal Surface Operations Mining Operation Plan Jan 2006 to Dec 2012 as amended and approved Audit findings/recommendations The MOP and subsequent amendments have been accepted by the DG of DRE - No requirement for modification and relodgement requested by DG - No requirement for modification and relodgement requested by DG Bulga Coal Surface Operations Mining Operation Plan Jan 2006 to Dec 2012 as amended and approved Proposed modifications to MOP have been lodged with Director General and subjected to the review process above 3 ANNUAL ENVIRONMENTAL MANAGEMENT REPORT (AEMR) - - - 3(1) Within 12 months of the commencement of mining operations and thereafter annually or, at such other times as may be allowed by the Director-General, the lease holder must lodge an Annual Environmental Management Report (AEMR) with the Director- General. 3(2) The AEMR must be prepared in accordance with the Director- General's guidelines current at the time of reporting and contain a review and forecast of performance for the preceding and ensuing AEMR 2009 AEMR 2010 AEMR 2011 AEMR 2009 AEMR 2010 AEMRs lodges with DG Addressed in AEMRs /noncompliant Not applicable Not applicable

BULGA SURFACE OPERATIONS Mining Lease No. 1547 Condition Subject Documentation reviewed twelve months in terms of: (a) (b) the accepted Mining Operations Plan; development consent requirements and conditions; (c) Environment Protection Authority and Department of Infrastructure, Planning and Natural Resources licences and approvals; (d) any other statutory environmental requirements; (e) details of any variations to environmental approvals applicable to the lease area. and (f) where relevant, progress towards final rehabilitation objectives. 3(3) After considering an AEMR the Director-General may, by notice in writing, direct the lease holder to undertake operations, remedial actions or supplementary studies in the manner and within the period specified in the notice to ensure that operations on the lease area are conducted in accordance with sound mining and environmental practice. 3(4) The lease holder shall, as and when directed by the Minister, cooperate with the Director-General to conduct and facilitate review of the AEMR involving other government agencies. AEMR 2011 Audit findings/recommendations /noncompliant - No written directions received from Director General Not Yet Enacted - No direction received from the Minister Not Yet Enacted BARRIERS - - - 9 The lease holder shall not work or cause to be worked any seam of coal within the subject area without leaving, if the Minister, so directs, a barrier of such width or a protective pillar or pillars of such size or sizes against any surface improvements of any feature whether natural or artificial. - No direction received from Director General Not Yet Enacted SHAFTS, DRIFTS, ADITS - - - 14 Operations shall be conducted in such a manner as not to cause any danger to persons or stock and the lease holder shall provide and maintain adequate protection to the satisfaction of the Minister around each shaft or excavation opened up or used by the lease holder. Bulga Coal Surface Operations Mining Operation Plan Jan 2006 to Dec 2012 as Site inspection indicated compliance with the MOP and this requirement

BULGA SURFACE OPERATIONS Mining Lease No. 1547 Condition Subject Documentation reviewed amended and approved Audit findings/recommendations /noncompliant DUMPS - - - 15 The lease holder shall comply with any direction, given or which may be given by the Inspector regarding the dumping, depositing or removal of material extracted as well as the stabilisation and revegetation of any dumps of coal, minerals, mine residues, tailings or overburden situated on the subject area or the associated colliery holding. 16 The lease holder shall comply with any direction given or which may be given by the Minister regarding the spraying of coal dumps on the subject area. - No direction received from an Inspector Not Yet Enacted - No direction received from Director General Not Yet Enacted DUST - - - 17 The lease holder shall take such precautions as are necessary to abate any dust nuisance. Bulga Coal Surface Operations Mining Operation Plan Jan 2006 to Dec 2012 as amended and approved Based on available information and site inspection, BUO appears to take necessary precautions to minimise dust nuisance Dust Management Plan dated 21 Dec 2010 MANAGEMENT AND REHABILITATION OF LANDS (GENERAL) - - - 18 The lease holder shall not interfere in any way with any fences on or adjacent to the subject area unless with the prior written approval of the owner thereof or the Minister and subject to such conditions as the Minister may stipulate. - Site inspection confirmed fences on or adjacent to the subject area have not been interfered in any way 19 The lease holder shall observe any instruction given or which may be given by the Minister with a view to minimising or preventing public inconvenience or damage to public or private property. - No direction received from the Minister Not Yet Enacted

BULGA SURFACE OPERATIONS Mining Lease No. 1547 Condition Subject Documentation reviewed 20 If required to do so by the Minister and within such time as may be stipulated by the Minister the lease holder shall carry out to the satisfaction of the Minister surveys of structures, buildings and pipelines on adjacent landholdings to determine the effect of operations on any such structures, buildings and pipelines. Audit findings/recommendations /noncompliant - No direction received from the Minister Not Yet Enacted 21 If so directed by the Minister the lease holder shall rehabilitate to the satisfaction of the Minister any lands within the subject area which may have been disturbed by the lease holder. 22 Upon completion of operations on the surface of the subject area or upon the expiry or sooner determination of this authority or any renewal thereof, the lease holder shall remove from such surface such buildings, machinery, plant, equipment, constructions and works as may be directed by the Minister and such surface shall be rehabilitated and left in a clean, tidy and safe condition to the satisfaction of the Minister. 23 If so directed by the Minister the lease holder shall rehabilitate to the satisfaction of the Minister and within such time as may be allowed by the Minister any lands within the subject area which may have been disturbed by mining or prospecting operations whether such operations were or were not carried out by the lease holder. - No direction received from the Minister Not Yet Enacted - No direction received from the Minister Not Yet Enacted - No direction received from the Minister Not Yet Enacted 24 The lease holder shall take all precautions against causing outbreak of fire on the subject area. Landscape Management Plan dated Sept 2011 Section 10.3.3 of the LMP provides details of the precautions taken by BSO against causing outbreak of fire on the subject area 25 The lease holder shall provide and maintain to the satisfaction of the Minister efficient means to prevent contamination, pollution, erosion or siltation of any river, stream, creek, tributary, lake, dam, reservoir, watercourse or catchment area or any undue interference to fish or their environment and shall observe any instruction given or which may be given by the Minister with a view to preventing or minimising the contamination, pollution, erosion or siltation of any river, stream, creek, tributary, lake, dam, reservoir, watercourse or catchment area or any undue interference to fish or their environment. SWMP dated 30 Sept 2010 Undertaking the measures detailed in the SWMP shall provide efficient means to prevent contamination, pollution, erosion or siltation of any river, stream, creek, tributary, lake, dam, reservoir, watercourse or catchment area or any undue interference to fish or their environment No instruction received from the Minister BLASTING - - -

BULGA SURFACE OPERATIONS Mining Lease No. 1547 Condition Subject Documentation reviewed Audit findings/recommendations /noncompliant 26 The lease holder shall monitor noise and vibration and institute controls, generally in accordance with the recommendations of Australian Standard AS-2187-1993 and ANZEC Guidelines. Blast Management Plan Revision 0.1 BSO monitors noise and vibration monitoring and institute controls to mitigate impacts in accordance with the recommendations of Australian Standard AS- 2187-1993 and ANZEC Guidelines 26(a) Ground Vibration The lease holder shall design all blasts on the basis that the ground vibration peak particle velocity generated by any blasting within the subject area, shall not exceed the levels in or conditions of the. EPA Licence for the mine,_ at any _dwelling or occupied premises not owned by the lease holder, the holder of an authority under the Mining Act, or not subject to a valid agreement with the lease holder, with respect to the effects of blasting. Blast Management Plan Revision 0.1 AEMR 2009 AEMR 2010 AEMR 2011 BSO designs all blasts on the basis that the ground vibration peak particle velocity generated by any blasting within the subject area, shall not exceed the levels in or conditions of EPL 563 26(b) Blast Overpressure The lease holder shall design all blasts on the basis that the blast overpressure noise level generated by any blasting within the subject area, shall not exceed the levels in or conditions of the EPA Licence for the mine, at any dwelling or occupied premises not owned by the lease holder, the holder of an authority under the Mining Act, or not subject to a valid agreement with the lease holder, with respect to the effects of blasting. Blast Management Plan Revision 0.1 AEMR 2009 AEMR 2010 AEMR 2011 BSO designs all blasts on the basis that the blast overpressure noise level generated by any blasting within the subject area, shall not exceed the levels in or conditions of EPL 563. Measured over blast exceedance of the 120 db (Lin Peak) noise level on 4 April 2009 and 3 November 2009 as reported to NSW EPA. Reinforcement of BVMP with operations has seen a substantial decrease in blast related incidents since 2009, BVMP has also been revised in 2011 NC028 R027: Continue to monitor and implement the BVMP TREES (PLANTING AND PROTECTION OF) FLORA AND FAUNA AND ARBOREAL SCREENS - - - 27 If so directed by the Minister, the lease holder shall ensure that operations are carried out in such manner so as to minimise disturbance to flora and fauna within the subject area. Bulga Coal Complex Flora and Fauna Management Plan 19 April 2012 No direction received from the Minister. Flora and Fauna Management Plan provides measures to minimise disturbance to flora and fauna within the subject area 29 The lease holder shall maintain an arboreal screen to the satisfaction of the Minister within such parts of the subject area as may be specified by the Minister and shall plant such trees or shrubs as may be required by the Minister to preserve the arboreal Bulga Coal Complex Flora and Fauna Management Plan No direction received from the Minister. Flora and Fauna Management Plan provides measures to maintain an arboreal screen along Broke and Charlton Roads within the subject area

BULGA SURFACE OPERATIONS Mining Lease No. 1547 Condition Subject Documentation reviewed screen in a condition satisfactory to the Minister. 19 April 2012 30 The lease holder shall conduct operations in such a manner as not to cause or aggravate soil erosion and the lease holder shall observe and perform any instructions given or which may be given by the Minister with a view to minimising or preventing soil erosion. ESCP dated 1 Dec 2012 Audit findings/recommendations Given the significance of the erosion and sediment control issue at Bulga, a standalone ESCP has been prepared for the Bulga Complex ROADS - - - 31 The lease holder shall pay to Singleton Shire Council, Department of Lands or the Chief Executive, Roads and Traffic Authority the cost incurred by such Council or Department or Chief Executive of making good any damage caused by operations carried on by or under the authority of the lease holder to any road adjoining or traversing the surface or the excepted surface, as the case may be of the subject area. PROVIDED HOWEVER that the amount to be paid by the lease holder as aforesaid shall be reduced by such sum of money if any as may be paid to the said Council the Department of Lands or the Chief Executive, Roads and Traffic Authority as the case may be from the Mine Subsidence Compensation Fund constituted under the Mine Subsidence Compensation Act, 1961, in settlement of a claim for compensation for the same damage. 32 In the event of operations being conducted on the surface of any road, track or firetrail traversing the subject area or in the event of such operations causing damage to or interference with any such road, track or firetrail the lease holder, at his own expense, shall if directed to do so by the Minister provide to the satisfaction of the Minister an alternate road, track or firetrail in a position as required by the Minister and shall allow free and uninterrupted access along such alternate road, track or firetrail and, if required to do so by the Minister, the lease holder shall upon completion of operations rehabilitate the surface of the original road, track or firetrail to a condition satisfactory to the Minister. - The Mine Subsidence Board undertakes road repairs as paid by BUO. Repairs to Charlton Road observed during site inspection /noncompliant - No direction received from the Minister Not Yet Enacted 33 CATCHMENT AREAS - - - 33(a) Operations shall be carried out in such a way as not to cause any pollution of the Hunter River Catchment Area. SWMP dated 30 Sept 2010 The site inspection demonstrated use of erosion and sediment control features to reduce sedimentation

BULGA SURFACE OPERATIONS Mining Lease No. 1547 Condition Subject Documentation reviewed ESCP dated 1 Dec 2012 2010 EPL Return 2011 EPL Return Audit findings/recommendations impacts in accordance with the SWMP and ESCP. EPL Returns provide data on the HRSTS discharge water quality /noncompliant 33(b) If the lease holder is using or about to use any process which in the opinion of the Minister is likely to cause contamination of the waters of the said Catchment Area the lease holder shall refrain from using or cease using as the case may require such process within twenty four (24) hours of the receipt by the lease holder of a notice in writing under the hand of the Minister requiring the lease holder to do so. - No notice received from Director General Not Yet Enacted 33(c) The lease holder shall comply with any regulations now in force or hereafter to be in force for the protection from pollution of the said Catchment Area. 2010 EPL Return 2011 EPL Return BSO complies with the requirements of the Protection of the Environment Operations (Hunter River Salinity Trading Scheme) Regulation 2002. EPL Returns provide data on the HRSTS discharge water quality ABORIGINAL OBJECT OR ABORIGINAL PLACE - - - 43 The lease holder shall not knowingly destroy, deface or damage any Aboriginal object or Aboriginal place within the subject area except in accordance with an authority issued under the National Parks and Wildlife Act, 1974, and shall take every precaution in drilling, excavating or disturbing the land against any such destruction, defacement or damage. ACHMP March 2001 Draft ACHMP dated 2012 Indigenous heritage assessments and salvage conducted and authorities obtained under S90 of the National Parks and Wildlife Act, 1974. While BSO are driving the revision of the ACHMP, the current version is over 11 years old NC006 R006: BSO to focus on the timely approval of the ACMP 44 The lease holder shall during each year of the term of the authority: - - - 44(a) ensure that at least 233 workers are efficiently employed on the subject area; or - Per Con Ralph Northey, More than 1,400 workers employed at the Bulga Coal Complex 44(b) expend on operations carried out in the course of prospecting or mining the subject area, an amount of not less than $4,077,500. The Minister may, at any time after a period of two (2) years from the date on which this authority has effect or from the date on which the renewal of this authority has effect, increase or decrease the amount of expenditure or labour required. - More than $4,077,500 has been expended on operations carried out in the course of prospecting or mining the subject area

BULGA SURFACE OPERATIONS Mining Lease No. 1547 Condition Subject Documentation reviewed 45 ADDITIONAL INFORMATION 45(a) 45(b) 45(c) 45(d) The lease holder shall if directed by the Minister and within such time as the Minister may stipulate furnish to the Minister information regarding the ownership of the land within the subject area; information regarding the ownership of the coal within the subject area prior to 1 st January, 1982; an indemnity in a form approved by the Minister indemnifying the Crown and the Minister against any wrong payment effected as a result of incorrect information furnished by the lease holder; information regarding the financial viability of the lease holder and operations within and associated with the subject area; and Audit findings/recommendations - - - /noncompliant - No notice received from Director General Not Yet Enacted - No notice received from Director General Not Yet Enacted - No notice received from Director General Not Yet Enacted - No notice received from Director General Not Yet Enacted 45(e) information regarding shareholdings in the lease holder. - No notice received from Director General Not Yet Enacted SERVICE OF NOTICES - - - 46 Within a period of three (3) months from the date of this authority or a period of three (3) months from the date of service of the notice of renewal, or within such further time as the Director General may allow, the lease holder shall serve on each landholder within the subject area a notice in writing indicating that this authority has been granted or renewed and whether the authority includes the surface. The notice shall be accompanied by an adequate plan and description of the subject area. If there are ten (10) or more landholders affected the lease holder may serve the notice by publication in a newspaper circulating in the region where the subject area is situated. The notice shall indicate that this authority has been granted or renewed, state whether the authority includes the surface and shall contain an adequate plan and description of the subject area. - Verified during 2006 audit 47 INSPECTORS - - - 47(a) Where an Inspector under the Mining Act 1992 is of the opinion that any condition of this authority relating to operations within the subject area, or any provision of the Mining Act, 1992, relating to - No notices received from inspectors Not Yet Enacted

BULGA SURFACE OPERATIONS Mining Lease No. 1547 Condition Subject Documentation reviewed 47(b) 47(c) operations within the subject area, are not being complied with by the lease holder, the Inspector may serve on the lease holder a notice stating that and give particulars of the reason why, and may in such notice direct the lease holder: (i) to cease operations within the subject area in contravention of that condition or Act; and (ii) to carry out within the specified time works necessary to rectify or remedy the situation. The lease holder shall comply with the directions contained in any notice served pursuant to sub paragraph (a) of this condition. The Director General may confirm, vary or revoke any such direction. A notice referred to in his condition may be served on the Colliery Manager. Audit findings/recommendations /noncompliant - No notices received from inspectors Not Yet Enacted - No notices received from inspectors Not Yet Enacted INDEMNITIES - - - 48 The lease holder shall indemnify and keep indemnified the Crown from and against all actions suits and claims and demands of whatsoever nature and all costs charges and expense which may be brought against the lease holder or which the lease holder may incur respect of any accident or injury to any person or property which.may arise out of the construction maintenance or working of any workings now existing or to be made by the lease holder within the boundaries of the subject area or in connection with any of the operations notwithstanding that all other conditions of this authority shall in all respects have been observed by the lease holder or that any such accident or injury shall arise from any act or thing which the lease which the lease holder may be licensed or compelled to do hereunder. 49 The lease holder shall save harmless the Crown from payment of compensation and from and against all claims, actions, suits or demands whatsoever in the event of any damage resulting from mining operations under or near the subject area. - Verified during 2006 audit - Verified during 2006 audit 50 PROSPECTING (GENERAL) - - - 50(a) Where the lease holder desires to commence prospecting - No prospecting proposed Not Applicable

BULGA SURFACE OPERATIONS Mining Lease No. 1547 Condition Subject Documentation reviewed operations in the subject area the lease holder shall notify the Director General in writing and shall comply with such additional conditions as the Minister may impose including any condition requiring the lodgement of an additional bond or other form of security for rehabilitation of the area affected by such operations. 50(b) Where the lease holder notifies the Director General pursuant to sub paragraph (a) of this condition the lease holder shall furnish with that notification details of the type of prospecting methods that would be adopted and the extent and location of the area that would be affected by them. Audit findings/recommendations /noncompliant - No prospecting proposed Not Applicable 51 SECURITY DEPOSIT - - - 51(a) 51(b) 51(c) The lease holder shall, upon request by the Director General, lodge with the Minister the sum of $19,170,000 as security for the fulfillment of the obligations of the lease holder under this authority. In the event that the lease holder fails to fulfill any of the lease holder's obligations under this authority the said sum may be applied at the discretion of the Minister towards the cost of fulfilling such obligations. For the purposes of the clause a lease holder shall be deemed to have failed to fulfill the lease holder's obligations under this authority, if the lease holder fails to comply with any condition or provision of this authority, any provision of the Act or regulations made thereunder or any condition or direction imposed or given pursuant to a condition or provision of this authority or of any provision of the Act or regulations made thereunder. The lease holder must provide the security required by sub-clause (a) hereof in one of the following forms:- (i) cash, or (ii) a security certificate in such form and given by such surety as may from time to time be approved by the Minister. The Minister may at any time after the commencement of this authority or any renewal thereof, vary the amount of security required in accordance with this condition. Letter from DMR Bank Security Deposit Bank Security Deposit Letter accompanying mining lease from Mineral Resources confirmed that the replacement security deposit was received by the Department on 3 May 2004. Security deposits now updated annually, copy of 2011 security deposit with bank observed during site inspection Copy of 2011 security deposit with bank observed during site inspection - No direction received from the Minister, security deposits now updated annually ROYALTY AT ADDITIONAL RATE - - -

BULGA SURFACE OPERATIONS Mining Lease No. 1547 Condition Subject Documentation reviewed 54 The lease holder must in respect of coal recovered by open cut mining methods pay additional royalty to the Minister at the rate prescribed by the Regulation to the Mining Act, 1992. PULSE Printout of Expenditure 2009, 2010 and 2011 Audit findings/recommendations Review of financial records confirms royalty paid for 2009, 2010 and 2011 56 SUBSIDENCE MANAGEMENT - - - 56(a) 56(b) 56(c) 56(d) 56(e) The lease holder shall prepare a Subsidence Management Plan prior to commencing any underground mining operations which will potentially lead to subsidence of the land surface. Underground mining operations which will potentially lead to subsidence include secondary extraction panels such as longwalls or miniwalls, associated first workings (gateroads, installation roads and associated main headings, etc), and pillar extractions, and are otherwise defined by the Guideline for Applications for Subsidence Management Approvals. The lease holder must not commence or undertake underground mining operations that will potentially lead to subsidence other than in accordance with a Subsidence Management Plan approved by the Director-General, an approval under the Coal Mines Regulation Act 1982, or the document New Subsidence Management Plan Approval Process- Transitional Provisions. Subsidence Management Plans are to be prepared in accordance with the Guideline for Applications for Subsidence Management Approvals. Subsidence Management Plans as approved shall form part of the Mining Operations Plan required under Condition 2 and will be subject to the Annual Environmental Management Report process as set out under Condition 3. The SMP is also subject to the requirements for subsidence monitoring and reporting set out in the document New Approval Process for Management of Coal Mining Subsidence - Policy. - BSO manage opencut operations, underground mining operations managed by BUO - BSO manage opencut operations, underground mining operations managed by BUO - BSO manage opencut operations, underground mining operations managed by BUO - BSO manage opencut operations, underground mining operations managed by BUO - BSO manage opencut operations, underground mining operations managed by BUO ADDITIONAL CONDITIONS - - - 57 The lease holder shall comply with any direction given or which may be given by the Minister in relation to the haulage of coal between the face and any coal preparation plant constructed on the subject /noncompliant Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable - No direction received from the Minister Not Yet Enacted

BULGA SURFACE OPERATIONS Mining Lease No. 1547 Condition Subject Documentation reviewed area. 58 The lease holder shall provide and maintain a secure fence to the satisfaction of the Minister along the common boundary between the subject area and the Singleton Army Training Area. 59 The lease holder shall plant quick growing trees and shrubs adjacent to the washing plant and haulage roads within the subject area to reduce noise levels particularly in the vicinity of the Range Warden's cottage and shall comply with any other direction in this regard which may be issued by the Minister. 60 The lease holder shall conduct mining operations on the subject area so as not to interfere with the training activities within the Singleton Army Training Area and in this regard shall maintain light and noise levels along the haulage roads to the satisfaction on the Minister. 61 The leaseholder shall, prior to any proposed activity in regard to methane drainage and capture, notify the Chief Inspector of Coal Mines (Mine Safety Operations and Environment Unit). The Chief Inspector of Coal Mines may impose conditions on such activity relative to each site specific case. Audit findings/recommendations /noncompliant - Site inspection indicated that fencing was secure - Site inspection indicated that quick growing trees and shrubs had been planted - There have been no complaints from the Singleton Army Training Area BHM letter to District Inspector of Coal Mines 4 May 2007 No additional conditions were imposed by the District Inspector of Coal Mines

Report Appendix B Spectrum Acoustics Independent Audit Report

16 January 2013 12755_4642 Mr Wayne Jones Landloch Suite 10, 79 King Street Warners Bay NSW 2284 ENVIRONMENTAL AUDIT (NOISE) BULGA SURFACE OPERATIONS 1. INTRODUCTION This report provides the results of an audit of the noise components of Bulga Surface Operations s Project Approval DA 41-03-99 dated 23 December 1999 (modifications up to and including July 2011) and associated documents. In this document, BCC refers to Bulga Coal Company and BSO refers to Bulga Surface Orerations. 2. Project Approval 41-03-99 Condition Subject Verification Document(s) 1 Compliance status Comments 6.3.1 Acquisition upon request N/A Yes 6.3.2 Land acquisition criteria NMP 2 Appendix 1 Yes 6.3.3 Impact assessment criteria 6.3.4 6.3.5 6.3.6 Additional mitigation measures Cumulative noise assessment criteria Cumulative land acquisition criteria NMP 2 Sec. 4, Appendix 1 ENVRRO4 3 Appendix 1 NMP 2 Appendix 1 NMP 2 Appendix 1 NMP 2 Appendix 1 6.3.7 Continuous improvement NMP 2 Appendix 1 Yes Yes Yes Yes Yes Instructive condition to be enacted as required. Criteria incorporated in relevant documents Criteria incorporated in relevant documents Criteria incorporated in relevant documents Criteria incorporated in relevant documents Criteria incorporated in relevant documents Requirements incorporated in 6.3.8 Noise Management Plan NMP Yes Prepared as required 1 Where the Condition lists criteria but does not prescribe an action, the documents where these criteria are incorporated will be noted. 2 Bulga Coal Complex Noise Management Plan, BUL SD PLN 0032 (Effective from 23/10/12). 3 Noise Management Procedures, ENVPRO4.3.03.03.014 (Effective from 27/08/10). NMP Spectrum Acoustics Pty Limited ABN: 40 106 435 554 1 Roath Street, Cardiff NSW 2285 PO Box 374 Wallsend NSW 2287 Phone: (02) 4954 2276 Fax: (02) 4954 2257

Noise Audit Bulga Coal Complex 3. Condition 6.3.7 (Continuous Improvement) Verification Compliance status Condition Subject Document(s) Comments 6.3.7 (a) Implement best practice noise mitigation NMP Appendix 4 Yes Documented 6.3.7 (b) Upgrade/replace mobile fleet NMP Sec 3.41, SoC 1 Yes Documented 6.3.7 (c) Report effectiveness in AEMR Sec 3.3, 2010 AEMR AEMR Sec 3.3, 2011 Yes Documented 1 Statement of Commitments (SoC) as detailed in the Environmental Assessment, Feb 2010. 4. Condition 6.3.8 (Noise Management Plan) Condition Subject Verification Document(s) Compliance status Comments 6.3.8 (a) Timing of submission NMP Appendix 5 Yes Satisfied Noise monitoring protocol for evaluating compliance with: 6.3.8 (b) - BSO noise impact assessment and land NMP Sec 6.1-6.3 Yes Noise monitoring protocol acquisition criteria; evaluates BCO criteria - Cumulative impact assessment and acquisition criteria. NMP Sec 6.1-6.3 Yes Noise monitoring protocol evaluates cumulative noise Response protocol and contingency plans if noise levels approach: 6.3.8 (b) - BSO noise impact assessment and land NMP Sec 6.32, Yes Response protocol in relation to acquisition criteria; Appendix 4 BCO noise documented. - Cumulative impact assessment and acquisition criteria. N/A No No response protocol in relation to cumulative noise. 5. Condition 6.3.8 (b) (Noise Monitoring Program) Verification Document(s) Compliance Requirement status Comments Real-time monitoring NMP Sec 6.3 Yes Complies (see Note 1) Attended monitoring NMP Sec 6.1 Yes Complies (see Note 2) Low-frequency protocol Noise Monitoring Reports Yes Complies Protocol to determine exceedances Noise Monitoring Reports Yes Complies (see discussion below) Response protocol when noise approaches BSO criteria BUL SD PRO 0094 1 Yes Addresses BSO noise Response protocol when noise No response protocol in relation to non- N/A No approaches cumulative criteria BCO component of cumulative noise. 1 Bulga Surface Operations Noise Management Procedure (Effective from 09/07/12). Doc. No: 12755-4642 January 2013 Page 2

Noise Audit Bulga Coal Complex Note 1: Real-time Monitoring Four (4) real-time directional monitors installed. 1kHz low-pass frequency filtered to eliminate high-frequency non-mine sources. SMS triggers when levels approach criteria. Calibration schedule described. Note 2: Attended Monitoring review of attended monitoring reports Measurement for 15-minutes duration. Night-time only, one night per month, no daytime or evening monitoring. 6. Environment Protection Licence EPL 563 Condition Subject Verification Document(s) Compliance status Comments U2.1 Requirement to conduct noise assessment and PRP 1 Yes Report prepared and submitted. submit to EPA by 28/9/12 Requirements of report prepared under U2.1: U2.2 (1) Develop Project PRP Sec 3.1 Yes Report requirements met. Specific Noise levels U2.2 U2.2 (2) Predict BCC PRP Sec 3.2 Yes See Note 1 noise at receivers U2.2 (3) Proposed noise limits for adoption in EPL U2.2 (4) Details methods PRP Sec 3.3 PRP Sec 3.4 Yes Yes Report requirements met. Report requirements met. to comply with noise limits 1 Pollution Reduction Program Environmental Noise (Global Acoustics 28 Sep 2012). Note 1: Section 3.2.5 of the PRP states the following: The last sentence of this statement provides no formal mechanism by which (already identified) cumulative noise issues would be addressed. A formal framework for specifically addressing cumulative noise impacts should be considered, as will be discussed further in the following section. Doc. No: 12755-4642 January 2013 Page 3

Noise Audit Bulga Coal Complex 7. OBSERVATIONS AND IMPROVEMENT OPPORTUNITIES 7.1 AEMR Noise Data Summary Table 3.1 Yearly Summary of Noise Monitoring Data in the 2010 and 2011 AEMR s contains annual average and maximum values for the LA1, LA10, LAeq and LA90 percentiles. These data do not relate to any of the noise emission criteria, are for total measured noise and not for the Bulga Coal Complex contribution and therefore convey no meaningful information. It is recommended that average and maximum noise levels from the BCC only be included in future summary tables. 7.2 Noise Complaint Trend Noise related complaints dropped from 31 in 2009 to 22 in 2010 and 18 in 2011. This feedback from the community suggests a decrease in the general level of noise impacts. One minor operational noise criterion exceedance from BCC was recorded for each of the 2010 and 2011 reporting periods and in each case, it was shown that the noise level was not a formal breach of operating conditions. 7.3 Compliance Protocol The protocol to determine compliance with the site-specific and cumulative noise assessment and acquisition criteria, as required under Consent Condition 6.3.8 (b), is acceptable but does not quantify noise emissions as reliably as is readily achievable by other methods. The following discussion is informative only and is not intended as formal recommendations. Attended Monitoring The attended monitoring procedure/equipment described in the monitoring reports enables frequency analysis of the overall 15-minute measurements. The procedure adequately identifies the contribution from birds, insects and other high-frequency environmental sources. Frequency analysis is not sufficient, however, to enable accurate separation of sources such as mine noise, traffic, wind and other low-mid frequency emitters with overlapping frequency spectra. The description in Section 5.1 of the monitoring reports admits to the difficulty of using only spectral data to distinguish sources with common emission spectra. Temporal analysis is the recommended method to achieve the best possible separation of these sources and some guidance on temporal analysis techniques is provided below. As a common example, passing vehicles will usually be intermittent in nature and can easily be identified by matching field notes (with times noted) with a time-trace of the measurement at, nominally, 1-second intervals. The individual passages (duration, noise levels) of all vehicles during the measurement period provide the necessary information to calculate the L Aeq(15minute) noise contribution from traffic during the monitoring period. This may be done manually in a spreadsheet or using proprietary software. Doc. No: 12755-4642 January 2013 Page 4

Noise Audit Bulga Coal Complex The above temporal analysis procedure can be used to quantify the noise contributions from other identifiable non-continuous noise sources (including individual dozer tracks, engine revs, etc associated with the mine as well as many environmental/domestic sources). After the non-continuous noise sources have been separated temporally and their contributions to the overall measured LAeq level calculated, there will usually be residual constant or diffuse noise sources such as wind in trees and mine hum that cannot be separated by frequency or temporal analysis. It is then acceptable for the acoustic consultant to make a justified subjective assessment. As an example, it is often noted on field notes that the total level during a break in traffic was 40 db(a) and comprised the mine hum and wind in the trees at what sounded like equal noise levels. In this case, it is justifiable to assign 37 db(a) to both mine hum and wind. The temporal quantification of mine noise, based on these examples, would conclude with logarithmically adding the contributions from identified mine noise sources (impacts, tracks noise, revs, etc) with the general mine hum. The analysis procedure and or apparatus for attended measurements should be revised/updated to incorporate temporal analysis in such a way that the noise contributions from individual sources (including all intermittent and continuous mine-related sources, regardless of frequency) may be more accurately quantified than they currently are. 7.4 Criterion Exceedances 23 August 2010 Measured noise level from BCC was 1 db above noise criterion at the Russell residence. Section 3.2.2 of the 2010 AEMR states the following: This exceedance is not considered significant as Chapter 11 of the DECCW Industrial noise policy deems a development to be in non-compliance only when the monitored noise level is more than 2 db above the statutory noise limit specified in the consent or license condition. The event was therefore not a formal non-compliance. In this case, the AEMR documents actions taken following the 23 August 2010 event. In particular, in response to the 23 August event and other noise related complaints, the NMP was revised to allow for night-time dumping locations at lower elevation and noise bunds. 24 June 2011 Cumulative noise criterion of 40 db(a) was exceeded by 3 db at 2241 Putty Road. The noise was attributed to another mine. This clearly identifies Mount Thorley Warkworth (MTW)in the absence of any other mining source. Doc. No: 12755-4642 January 2013 Page 5

Noise Audit Bulga Coal Complex The level of 43 db(a) from MTW alone is equal to the cumulative acquisition criterion which is of significant concern, especially since this was a night-time measurement during winter, yet there was negligible temperature inversion at the time (0.5 0 C/100m stated in the noise monitoring report). This level is likely to be in excess of MTW s site-specific noise acquisition criterion at this receiver. Such high noise levels, and possibly higher, are likely to be commonly experienced under the prevailing meteorology of the area. Under the current situation, the monitoring for either mine may identify noise criterion breaches due to the other mine but would not trigger any formal requirement to notify the offending mine and have the issue addressed. Section 6.32 of BCC s NMP sets a trigger level of 34dB(A) at which SMS alarms are sent to various BCC personnel. This is 2 db below the BCC assessment criterion at this location, which is the typical trigger level used by several other coal mines. A range of actions is given if the alarm is determined to be related to BCC mining operations as detailed in the BSO Noise Management Procedure BUL SD PRO 0094. In the event of the mine noise not being from BCC, no further actions are given and BUL SD PRO 0094 neither mentions cumulative noise or lists the cumulative noise criteria. A response protocol and contingency plan for action when noise levels are nearing or exceeding the cumulative assessment criteria may readily be implemented by setting a second trigger level of 38 db(a) in the noise monitor, this level being 2 db below the cumulative noise criterion. Upon reaching this level, subject to the same conditions contained in Sec 6.32 of the BCO NMP, SMS alarms would be sent to the relevant personnel from both BCC and MTW. BCC s first response to a trigger is to visit the noise monitor to identify the noise source. Under the above approach, personnel from both mines would confirm the noise source. Each mine would then implement their individual noise management strategies, as required, to achieve compliance with their individual criteria. Each mine achieving their individual criteria (to within the 2 db tolerance) will result in the cumulative noise achieving the cumulative noise criterion (to within the 2 db tolerance). It is strongly recommended that Bulga Surface Operations and Mt Thorley Warkworth develop a cumulative noise monitoring/management strategy to formalise the response protocol and contingency plans in relation to cumulative noise. Alternatively, amendment of Sec 6.32 of BCC NMP to incorporate the above recommendation will bring BCC s NMP into full compliance with consent condition 6.3.8(b). Specific to the 24 June 2011 incident, it is recommended that Sentinex noise and meteorological data from the site in question be analysed over a period 48 hours either side of the incident to quantify cumulative mine noise levels. The results should be compiled in a report for review by EPA and myself (as a part of this audit process). 30 August 2011 A 2 db exceedance of the cumulative noise criterion occurred at the Cobcroft Road monitoring site. As distinct from the 24 June event, BCC was found to be a significant contributor. The acoustic report (and consequently the AEMR) notes that this is not an exceedance in accordance with Chapter 11 of the INP as discussed above for the 24 June event. The AEMR states that an offer was extended to the resident to have Doc. No: 12755-4642 January 2013 Page 6

Noise Audit Bulga Coal Complex an independent noise investigation at their property. This is an appropriate action in line with the consent and NMP. Given that the cumulative noise criterion was exceeded again, and also under a negligible inversion, the recommendations given above for the 24 June event apply. 6 September 2011 A 3 db exceedance of the 45 db(a) sleep disturbance criterion occurred at the Cobcroft Road monitoring site. The source was identified as dozer track noise from BCC but the event was not considered an exceedance due to the 4.1 0 C/100m inversion at the time (the noise criteria apply for inversions up to 4 0 C/100m). This event raises the following two distinct issues. Dozer track Noise Attempts at engineering solutions to significantly reduce dozer track noise have been largely unsuccessful. My personal involvement with several mines has found that maximum track noise levels are around 8 db lower when the machine travels in reverse in first gear, compared with 2nd gear. This management strategy has been adopted at several mines (particularly for dozers operating at high elevation) and some dozers have been physically limited to 1650 rpm in reverse gear on some coal stockpiles. It is recommended that this simple and effective best practice strategy be explicitly included in the NMP and/or associated Management Procedures for implementation if the need arises. Temperature Inversion Strength The noise monitoring reports up to the end of 2010 included meteorological data in Appendix D. Vertical temperature gradient (VTG) strengths were assigned to the various Pasquill stability categories in a way that is consistent with Appendix E of the INP. Noise monitoring reports after 2010 do not contain meteorological data but do assign the same VTG values as the earlier reports (implying the same methodology) except for this one event where a value of 4.1 0 C/100m is assigned. A footnote to Table 4.2 of the report states that additional meteorological data from the Flares Weather Station was provided by BCC to enable calculation of the VTG. It is also noted that since the noise criteria only apply for VTG up to 4 0 C/100m, the event does not constitute an exceedance. The BCC noise consultant has advised that the event coincided with G-class stability conditions. Since this implies VTG > 4. 0 C/100m a default (minimum) value of 4.1 0 C/100m has been assigned. This is in compliance with the INP. As an additional consideration, it is widely known that inversion strengths can considerably exceed the default value of 4 0 C/100m. For example, I have conducted direct measurement studies which have found 90 th percentile nocturnal inversion strengths of 5 0 C/100m at a Hunter Valley mine, 10 0 C/100m in the Bylong Valley and 12 0 C/100m in the Gunnedah Basin. In the absence of any method of accurately determining VTG in the Bulga area, and because the consent nominates a value of VTG as the upper limit of applicability of the noise criteria, it is recommended that a site-specific inversion study be conducted to quantify the 90 th percentile nocturnal inversion strength with a view to replacing the current default maximum value of 4 0 C/100m for applicability of the noise criteria. Doc. No: 12755-4642 January 2013 Page 7

8. Conclusion Noise Audit Bulga Coal Complex This audit has found the Bulga Coal Complex to be operating largely in compliance with conditions 6.3.1 to 6.3.8 of Project Approval DA 41-03-99 dated 23 December 1999 (modifications up to and including July 2011) and associated documents. Only one area of non-compliance was found. Response protocols and contingency action plans for cumulative mining noise have not been specifically included in the NMP as required in the consent. Improvement opportunities have been identified regarding the inclusion of response protocols and contingency action plans for cumulative mining noise in the BCC NMP (or formulation of a cumulative strategy with MTW) and determination of temperature inversion strengths. Informal recommendations have been made to improve the conduct and analysis of attended noise monitoring in order to enable more accurate quantification of noise emissions from the site. Should you require any further information please contact the undersigned. Yours faithfully, SPECTRUM ACOUSTICS PTY LIMITED.. Neil Pennington B.Sc., B.Math. (Hons), MAAS, MASA Director Doc. No: 12755-4642 January 2013 Page 8

Report Appendix C SRL Consulting Air Quality Independent Audit Report

December 2012 Bulga Surface Operations Air Quality Report Number 670.10427 R1 30 January 2013 Landloch PO Box 1102 Warners Bay NSW 2282 Version: Revision 0

Landloch December 2012 Bulga Surface Operations Air Quality Report Number 670.10427 R1 30 January 2013 Revision 0 Page 2 December 2012 Bulga Surface Operations Air Quality PREPARED BY: SLR Consulting Australia Pty Ltd ABN 29 001 584 612 Level 1, 14 Watt Street Newcastle NSW 2300 Australia (PO Box 1768 Newcastle NSW 2300 Australia) T: 61 2 4908 4500 F: 61 2 4908 4501 E: newcastleau@slrconsulting.com www.slrconsulting.com This report has been prepared by SLR Consulting Australia Pty Ltd with all reasonable skill, care and diligence, and taking account of the timescale and resources allocated to it by agreement with the Client. Information reported herein is based on the interpretation of data collected, which has been accepted in good faith as being accurate and valid. This report is for the exclusive use of Landloch and Xstrata. No warranties or guarantees are expressed or should be inferred by any third parties. This report may not be relied upon by other parties without written consent from SLR Consulting. SLR Consulting disclaims any responsibility to the Client and others in respect of any matters outside the agreed scope of the work. DOCUMENT CONTROL Reference Status Date Prepared Checked Authorised 670.10427 R1 Revision 0 30 January 2013 Jason Watson Martin Doyle Jason Watson SLR Consulting Australia Pty Ltd

Landloch December 2012 Bulga Surface Operations Air Quality Report Number 670.10427 R1 30 January 2013 Revision 0 Page 3 Table of Contents 1 INTRODUCTION 4 2 BACKGROUND 4 3 SITE INSPECTION 4 4 INDEPENDENT AIR QUALITY AUDIT 5 4.1 Ministers Conditions of Consent 5 4.2 Environmental Protection Licence (EPL) 5 5 CONCLUSION 15 TABLES Table 1 Air Quality Consent Conditions 6 Table 2 EPL 563 Conditions Air Quality 13 FIGURES NIL APPENDICES Appendix A Jason Watson curriculum vitae Appendix B Consent Conditions and Environmental Protection Licence SLR Consulting Australia Pty Ltd

Landloch December 2012 Bulga Surface Operations Air Quality Report Number 670.10427 R1 30 January 2013 Revision 0 Page 4 1 INTRODUCTION SLR Consulting Australia Pty Ltd (SLR Consulting) has been engaged by Landlock Pty Ltd, on behalf of Bulga Coal Surface Operations (BSO), to conduct an environmental audit with regard to air quality for the period 2009 to 2011 (however data from 2012 has been considered in some instances). The air quality audit was undertaken to determine compliance of operations conducted under Development Approval (DA) 41-03-99 and six subsequent modifications issued by the NSW Department of Planning and Infrastructure (DoP&I). The audit included an assessment of BSO s implementation of the following approvals/documents: Conditions of Approval (CoA) issued with the DA. Environment Protection Licence (EPL 563) issued by the Environmental Protection Authority (EPA) The auditor, Jason Watson, has over 14 years experience in the field of air quality and is the Canberra Office Manager at SLR Consulting. Please find his curriculum vitae attached as Appendix A. 2 BACKGROUND The Bulga Complex includes Bulga Coal Surface Operations, Bulga Underground Operations and the Coal Handling and Preparation Plant. The Bulga Complex is located 15 kilometres (km) southwest of Singleton near the village of Broke in New South Wales. The Bulga Complex produces approximately 16 million tonnes of semi soft coking coal and thermal coal a year, which is railed to the Port of Newcastle for export to China and Japan. The coal is used predominately for steel making and power generation. Coal mining at the Bulga Complex began in 1982 when BHP was granted approval to mine coal, when the facility was known as the Saxonvale Mine. Underground mining commenced at South Bulga in 1994 and Beltana in 2003. Operating as separate business units, Bulga Surface Operations and Bulga Underground Operations are managed by Xstrata Coal. 3 SITE INSPECTION A site inspection of BSO facilities was undertaken by Jason Watson on 5 December 2012 and included observation of: opencut mining operations rehabilitated overburden emplacement areas Area Station workshop old tailings dam typical monitoring points onsite weather station various haul roads and accesses washery product stockpiles SLR Consulting Australia Pty Ltd

Landloch December 2012 Bulga Surface Operations Air Quality Report Number 670.10427 R1 30 January 2013 Revision 0 Page 5 workshop and stores site access road intersections surrounding sensitive receivers 4 INDEPENDENT AIR QUALITY AUDIT 4.1 Ministers Conditions of Consent The relevant consent conditions applicable to Air Quality are provided within DA_41-03-99 Conditions of Consent Schedule 2 Item 6.1 (provided in Appendix B). The key Consent Conditions and determination of compliance have been summarised and are provided in Table 1. 4.2 Environmental Protection Licence (EPL) Conditions relevant to air quality are provided in Licence No. 563 (provided in Appendix B) have been summarised and are provided in Table 2. SLR Consulting Australia Pty Ltd

Landloch December 2012 Bulga Surface Operations Air Quality Report Number 670.10427 R1 30 January 2013 Revision 0 Page 6 Table 1 Air Quality Consent Conditions Condition Subject Documentation Reviewed Audit Findings/recommendations 6.1 Air Quality Management - - - 6.1.1 Dust Management Plan - - - 6.1.1(a) The Applicant shall, prior to commencement of mining operations, prepare a Dust Management Plan detailing air quality safeguards and procedures for dealing with dust emissions to the satisfaction of the Director-General. The management plan shall be updated as required by the Director- General. The plan shall include, but not be limited to, details to: 1 identify dust affected properties and the relevant dust limits consistent with the EIS and any subsequent submissions to the Department; 2 specify the procedures for the dust monitoring program for the purpose of undertaking independent dust investigations; 3 outline the procedure to notify property owners and occupiers likely to be affected by dust from the mine; Draft Dust Management Plan dated Dec 2012 AEMR 2010 AEMR 2011 Beltana EIS (Appendix 10) 2003 The deposited dust limits are not consistent with the AEMRs. Background deposited dust concentrations for each sensitive receiver have historically been established but has been considered within the DMP. Section 7.2 of the DMP attempts to address this requirement. This section makes reference to the condition requirements, but does not specify any procedures. Section 7.2 of the DMP attempts to address this requirement. This section makes reference to the condition requirements, but does not specify any procedures. /noncompliant Non-compliant Non-compliant Non-compliant SLR Consulting Australia Pty Ltd

Landloch December 2012 Bulga Surface Operations Air Quality Report Number 670.10427 R1 30 January 2013 Revision 0 Page 7 4 establish a protocol for handling dust complaints that include recording, reporting and acting on complaints Detailed in Section 7.1 of the DMP 5 record appropriate mechanisms for community consultation; Detailed in Section 7.5. 6 outline mitigation measures to be employed to minimise dust emissions; 7 ensure that equipment is available and used to control dust generation; 8 identify longer term strategies directed towards mitigating dust levels that exceed the OEH target dust criteria; 9 detail locations for dust monitoring and deposition gauges at the residential areas and frequency of monitoring, as agreed with the OEH; 10 continue the baseline monitoring program undertaken prior to development consent Detailed in Section 5.2 Observed during site inspection No evidence of this having been considered Detailed in Table 3. There is no reference to the baseline monitoring program 6.1.2 Air Quality and Dust Monitoring - - - 6.1.2(a) The Applicant shall: - - - 6.1.2(a)(i) undertake monitoring at locations described in the Dust Management Plan; Draft Dust Management Plan dated Dec 2012 Requirement Implemented Non-compliant Non-compliant 6.1.2(a)(ii) 6.1.2(a)(iii) 6.1.2(a)(iv) establish dust deposition and total suspended particulate (TSP) monitoring locations for the mine operations, including sites for monitoring impacts of dust at the nearest non-mine owned residences, and locations as may be determined to be necessary by the Director-General in consultation with the OEH and in accordance with the Dust Management Plan referred to in Condition 6.1(a); provide all results and analysis of air quality monitoring in the AEMR including a determination of the dust deposition rate in gm/m 2 /month, which shall be plotted to provide trend analysis in the AEMR.; 2009 AEMR 2010 AEMR 2011 AEMR 2009 AEMR 2010 AEMR 2011 AEMR Requirement Implemented Requirement Implemented 5 Monitoring of dust deposition and for the concentration of PM 10, total Draft Dust Management Requirement Implemented SLR Consulting Australia Pty Ltd

Landloch December 2012 Bulga Surface Operations Air Quality Report Number 670.10427 R1 30 January 2013 Revision 0 Page 8 suspended particulate (TSP) in ambient air must be carried out at locations agreed to in consultation with the OEH. Plan dated Dec 2012 5 General terms of Approval from OEH 6.1.2(a)(v) Monitoring for the concentration of PM 10, TSP and deposited dust are to be carried out as required to be conducted by the general terms of approval, or in accordance with a license under the Protection of the Environment Operations Act 1997, in relation to the development or in order to comply with a relevant local calculation protocol, must be done in accordance with: any methodology which is required by or under the POEO Act 1997 to be used for the testing of the concentration of the pollutant; or EPL 563 2009 AEMR 2010 AEMR 2011 AEMR Requirement Implemented if no such requirement is imposed by or under the POEO Act 1997, any methodology which the general terms of approval or a condition of the license or the protocol (as the case may be) requires to be used for that testing; or if no such requirement is imposed by or under the POEO Act 1997 or by the general terms of approval or a condition of the license or the protocol (as the case may be), any methodology approved in writing by the OEH for the purposes of that testing prior to the testing taking place. 6.1.2(b) Monitoring of the concentration of PM 10 particulate matter in ambient air must be carried out at locations agreed to in consultation with the OEH. The sampling method, units of measure, interval and frequency of monitoring will be as set out in the Approved Methods for the Sampling and Analysis of Air Pollutants in NSW or its latest version. Draft Dust Management Plan dated Dec 2012 Monitoring is being conducted appropriately. 6.1.2(c) The Applicant shall ensure that the dust and particulate emissions generated from the development do not cause exceedences of the air quality impact assessment criteria listed in Tables 1, 2 and 3 at any residence on, or more than 25 percent of, any privately owned land. Table 1: Long term impact assessment criteria for particulate matter Pollutant Averaging period Criterion 2009 AEMR 2010 AEMR 2011 AEMR There is a discrepancy between the adopted deposited dust criterion between the AEMRs. The 2010 and 2011 AEMRs (Table 3.3) are not consistent with the DMP. Future AEMRs and the criteria detailed in the DMP need to match. Non-compliance. Further investigations need to be undertaken for H1/H1b. H1 was relocated to H1b in February 2012. H1b is still exceeding the PM 10 24-hour PM 10. Investigations also SLR Consulting Australia Pty Ltd

Landloch December 2012 Bulga Surface Operations Air Quality Report Number 670.10427 R1 30 January 2013 Revision 0 Page 9 Total suspended particulate (TSP) matter Particulate matter < 10 µm (PM 10) Annual 90 µg/m 3 Annual 30 µg/m 3 Table 2: Short term impact assessment criteria for particulate matter Pollutant Particulate matter < 10 µm (PM 10) Averaging period Criterion 24 hour 50 µg/m 3 2009 Deposited Dust did not exceed 4g/m2/month criterion. 2009 Annual TSP did not exceed the 90ug/m3 criterion. 2009 Annual PM10 was less than criteria of 30ug/m3. 2009 24hr PM10 exceeded the short term criteria of 50ug/m3 on 12 occasions. Further investigations were conducted to determine the source need to be undertaken at the deposited dust monitoring location E1. This location has exceeded the criterion over a period of 2 years. Table 3: Long term impact assessment criteria for deposited dust Pollutant Deposited dust Averaging period Maximum increase in deposited dust level Maximum total deposited dust level Annual 2 g/m 2 /month 4 g/m 2 /month 2010, One occasion where Deposited Dust exceeded 4g/m2/month criteria. This was at site E1. 2010 Annual TSP was less than criteria of 90ug/m3. 2010 Annual PM10 was less than criteria of 30ug/m3. 2010 24hr PM10 exceeded the short term criteria of 50ug/m3 on 7 occasions. These exceedances were mainly related to site H1. 2011, One occasion where Deposited Dust exceeded 4g/m2/month criteria. This was at site E1. 2011 Annual TSP was less SLR Consulting Australia Pty Ltd

Landloch December 2012 Bulga Surface Operations Air Quality Report Number 670.10427 R1 30 January 2013 Revision 0 Page 10 than criteria of 90ug/m3. 2011 Annual PM10 was less than criteria of 30ug/m3. 2011 24hr PM10 exceeded the short term criteria of 50ug/m3 on 5 occasions, all at site H1. 6.1.2(c) In the event that a landowner or occupier considers that dust from the project is in excess of the OEH criteria for dust levels, at their dwelling, and the Director-General, is satisfied that an investigation is required, the Applicant shall upon the receipt of a written request: 6.1.2(c)(i) consult with the landowner or occupants affected to determine their concerns; 2009 AEMR 2010 AEMR 2011 AEMR Stakeholders consulted appropriately Requirement Implemented. 6.1.2(c)(ii) make arrangements for appropriate independent dust investigations in accordance with the Dust Management Plan, and to the satisfaction of the Director-General, to quantify the impact and determine the source of the effect; 2009 AEMR 2010 AEMR 2011 AEMR Requirement Implemented. 6.1.2(c)(iii) modify the mining activity in accordance with a Dust Management Plan if exceedences are demonstrated to result from the mine related activity. This shall include: introduction of additional controls, either of dust generation from individual sources on the site or on site operations or modify operations, to ensure that the dust criteria are achieved; 2009 AEMR 2010 AEMR 2011 AEMR The AEMR complaints register details actions taken to address all complaints. The actions taken are considered appropriate enter into an agreement with the landowner or provide such forms of benefit or amelioration as may be agreed between the parties as providing acceptable compensation for the dust levels experienced; 6.1.2(c)(iv) conduct follow up investigations to the satisfaction of the Director-General where necessary. 2009 AEMR 2010 AEMR Documented in AEMR 2011 AEMR 6.1.2(d) If the independent dust investigations in sub-clause (d) above confirm that dust limits are in excess of the relevant OEH criteria, the Applicant shall at Condition not relevant in this instance. SLR Consulting Australia Pty Ltd

Landloch December 2012 Bulga Surface Operations Air Quality Report Number 670.10427 R1 30 January 2013 Revision 0 Page 11 6.1.2(e) the written request of the owner acquire the relevant property. Acquisition shall be in accordance with the procedures set out in schedule 3. Further independent investigations shall cease if the Director-General is satisfied that the relevant consent limits or relevant OEH amenity criteria are not being exceeded and are unlikely to be exceeded in the future. 6.1.3 Dust Suppression Control 6.1.3(a) 6.1.3(a)(i) The Applicant shall: maintain and use sufficient equipment with the capacity to apply water to all unsealed trafficked areas at a rate which minimises dust emissions; - - - Draft Dust Management Plan dated Dec 2012 RST Performance Report July 2012 RST Performance Report Aug 2012 RST Performance Report Sept 2012 RST Performance Report Oct 2012 During the site inspection, Jason Watson observed that visual dust emissions from unsealed trafficked areas were negligible. Water trucks were observed in use. BSO are currently trialling the use of RT9 Dust suppressant on haul roads. 6.1.4(a)(ii) ensure the prompt and effective rehabilitation of all disturbed areas to minimise generation of wind erosion dust, in accordance with the requirements of DRE. Draft Dust Management Plan dated Dec 2012 Bulga Coal 2011 Annual Rehabilitation Plan Bulga 2012 Rehabilitation Plan Final Draft Site inspection identified areas where recent rehabilitation works had occurred. This included permanent rehabilitation areas and the seeding of the embankments of a number of overburden stockpiles. 6.1.3(a)(iii) keep the surface of the coal product and stackout stockpiles sufficiently damp to minimise windblown dust; and Draft Dust Management Plan dated Dec 2012 Site Inspection observed the sprinklers were operational. SLR Consulting Australia Pty Ltd

Landloch December 2012 Bulga Surface Operations Air Quality Report Number 670.10427 R1 30 January 2013 Revision 0 Page 12 6.1.3(a)(iv) 6 ensure activities occurring at the mine are carried out in a manner that will minimise emissions of dust from the premises. 6 General Terms of Approval from OEH Draft Dust Management Plan dated Dec 2012 2009 AEMR 2010 AEMR 2011 AEMR Deposited dust monitoring data indicates that at site E1, there is an ongoing dust problem. There is no evidence to indicate that an investigation has been undertaken to understand the cause of the problem. Non-compliant An investigation needs to be undertaken to determine the source and if activates in the area can be modified to reduce dust emissions 8 Monitoring/auditing 8.3 Meteorological The Applicant shall continue meteorological monitoring by utilising and maintaining the existing weather station at the Bulga Complex. The meteorological data shall be particularly used for assessment of noise, dust and blasting impacts on nearby residences. 2009 AEMR 2010 AEMR 2011 AEMR BSO maintain 2 weather stations on site: Bulga Complex (surface operations) and Flares (underground operations). The Bulga Complex weather station provided average availability and reliability. Technical issues were experienced in October and November 2011. Data from Flares was used to supplement the missing data. The Flares weather station provided good availability and reliability The weather stations are calibrated quarterly. SLR Consulting Australia Pty Ltd

Landloch December 2012 Bulga Surface Operations Air Quality Report Number 670.10427 R1 30 January 2013 Revision 0 Page 13 Table 2 EPL 563 Conditions Air Quality Condition Subject Documentation Reviewed P1.1 The following points referred to in the table below are identified in this license for the purposes of monitoring and/or the setting of limits for the emission of pollutants to the air from the point. 2009 AEMR 2010 AEMR 2011 AEMR Audit Finding / recommendations Requirement Implemented / non compliant O3 Dust - - - O3.1 The premises must be maintained in a condition which minimises or prevents the emission of dust from the premises. O3.2 All trafficable areas, coal storage areas and vehicle manoeuvring areas in or on the premises must be maintained, at all times, in a condition that will minimise the generation, or emission from the premises, of wind-blown or traffic generated dust. Draft Dust Management Plan dated Dec 2012 Bulga Coal Complex Coal Mine Particulate Matter Control Best Management Practise Determinate 2011 (PRP) Draft Dust Management Plan dated Dec 2012 Significant areas of rehabilitation recently completed. Use of RST as dust suppressant on haul roads. Development of a PRP Use of RST as dust suppressant on haul roads. Main haul roads appeared well maintained. SLR Consulting Australia Pty Ltd

Landloch December 2012 Bulga Surface Operations Air Quality Report Number 670.10427 R1 30 January 2013 Revision 0 Page 14 M2.2 Air Monitoring Requirements 2009 AEMR 2010 AEMR 2011 AEMR Quarterly Monitoring Report on website Coal product stockpile water sprinkler dust suppression system observed operating during site inspection. Requirement Implemented SLR Consulting Australia Pty Ltd

Landloch December 2012 Bulga Surface Operations Air Quality Report Number 670.10427 R1 30 January 2013 Revision 0 Page 15 5 CONCLUSION SLR Consulting has been engaged by Landlock Pty Ltd, on behalf of Bulga Coal Surface Operations (BSO), to conduct an environmental audit with regard to air quality and included an audit for the period 2009 to 2011. In general, BSO have met their air quality requirements detailed within: Conditions of Approval (CoA) issued with the DA Environment Protection License (EPL 563) issued by the Environmental Protection Authority (EPA) However a number of non-compliances relating to air quality were identified which are detailed in Table 1. These were generally related to the following: The Dust Management Plan does not meet the requirements detailed in the Conditions of Approval. There were a number of exceedances of the Project dust monitoring criteria. There is confusion regarding the correct deposited dust criterion to be applied to the nearest sensitive receivers. SLR Consulting Australia Pty Ltd

Appendix A Report Number 670.10427 R1 Page 1 of 1 Jason Watson CV SLR Consulting Australia Pty Ltd

Jason Watson Principal Environmental Scientist / Canberra Office Manager Curriculum Vitae QUALIFICATIONS Bachelor of Applied Science, specialising in Resource and Environmental Science, University of Canberra Masters in Environmental Science at Macquarie University MEMBERSHIP Member of the Clean Air Society of Australia and New Zealand BACKGROUND Jason Watson has over 13 years experience in the field of environmental science, specialising in air quality modeling and monitoring. Jason has experience in atmospheric dispersion modelling using TAPM, Ausplume v6.0, Calpuff, Calmet and Caline4. More recently, he has been involved in a number of Greenhouse Gas Assessments for major mining projects. Recently, he has managed the air quality review and modeling of 12 mine sites for a major coal mining company. This included liaising with 10 environmental managers, to gather information and direct the production of 12 site specific air assessments. Jason has also directed the development of a real time web based meteorological monitoring system. This has allowed the remote monitoring of meteorological data for environmental managers and operations managers at a number of extractive industry sites. SPECIAL EXPERTISE Air quality/odour modelling using TAPM, Ausplume v6.0, Caline4 Extensive experience in monitoring of water quality, volatile gases, groundwater, meteorology Contaminated site assessments and clearance (soil testing for acid sulphate soils and contamination) Investigations of ambient air quality/odour on behalf of both the public and the private sectors Occupational air quality monitoring (respirable/ inspirable dusts; crystalline silica) Project management and contractor supervision during site remediation works SELECTED PROJECT EXPERIENCE HUB Regional Waste Reprocessing Facility Odour/Air Quality Impact Assessment in support of an EIS for a Waste Reprocessing Facility. Impact Assessment included a comprehensive literature review of odour emission rates from waste reprocessing/landfilling activities. Hidden Valley Gold Mine (Papua New Guinea) Air Quality Impact Assessment undertaken in support of an Environmental Impact Statement. The assessment included an impact assessment of the proposed mine upon nearby villages in the highland areas of Papua New Guinea. Whitehaven Coal Mine, NSW Air Quality Impact Assessment in support of an Environmental Impact Statement for an Open Cut Coal Mine operation. The assessment included the quantification of particulate emissions and their impact upon the adjacent residential receivers. Zeehan Nickel Mine, TAS Air Quality Impact Assessment in support of an Environmental Impact Statement for an underground nickel mine operation. The assessment included the quantification of particulate emissions and their impact upon the adjacent residential receivers. Flying Doctor Mine, Broken Hill Air Quality Impact Assessment undertaken in support of an Environmental Impact Statement. The assessment included the quantification of particulate emissions and their impact upon the adjacent residential receivers. It also included a detailed Greenhouse Gas Assessment. TAPM and Ausplume Modelling East Boggabri Coal Mine, Enfield Asphalt Plant, Ingleburn Concrete Batch Plant, Karuah Hard Rock Quarry, Kulnura Sand Mine, Mars Road Spray Booth Assessment, Woden Valley Bus Interchange. JW CV1 AQ1.doc SLR Consulting Australia Pty Ltd

Appendix B Report Number 670.10427 R1 Page 1 of 1 Consent Conditions and Environmental Protection Licence SLR Consulting Australia Pty Ltd

Development Consent Section 80 of the Environmental Planning & Assessment Act 1979 I, the Minister Assisting the Minister for Infrastructure and Planning (Planning Administration), approve the Development Application referred to in Schedule 1, subject to the conditions in Schedules 3 to 6. These conditions are required to: prevent, minimise, and/or offset adverse environmental impacts; set standards and performance measures for acceptable environmental performance; require regular monitoring and reporting; and provide for the on-going environmental management of the development. Diane Beamer MP Minister Assisting the Minister for Infrastructure and Planning (Planning Administration) Sydney, 2004 File No: S02/02148 Blue type represents April 2006 modification (4-1-2006) Red type represents October 2006 modification (113-9-2006) Green type represents October 2007 modification (1-10-2007) Purple type represents July 2010 modification SCHEDULE 1 Development Application: DA 376-8-2003; Applicant: Consent Authority: Bulga Coal Management Pty Limited; Minister for Infrastructure and Planning; Land: See Appendix 1; Proposed Development: State Significant The development of underground mining operations at the Bulga Complex in general accordance with the Environmental Impact Statement for the Bulga Coal Continued Underground Operations, which includes: underground mining in 4 coal seams, producing up to 14 million tonnes of run-of-mine (ROM) coal a year; processing a maximum of 20 million tonnes of ROM coal a year from the Bulga Complex (which includes open cut and underground mining operations); constructing a range of associated infrastructure, including new amenities, offices, road intersections, coal conveyors, gas drainage plants, and gas drainage and dewatering bores; using, and in some cases upgrading existing infrastructure; and transporting coal to Newcastle Port by rail. The proposal is classified as State significant development, 1

Development: Integrated Development: Designated Development: under section 76A(7) of the Environmental Planning & Assessment Act 1979, because it involves coal-mining related development that requires a new mining lease under section 63 of the Mining Act 1992. The proposal is classified as integrated development, under section 91 of the Environmental Planning & Assessment Act 1979, because it requires additional approvals under the: Protection of the Environment Operations Act 1997; National Parks & Wildlife Act 1974; Water Act 1912; Roads Act 1993; and Mine Subsidence Compensation Act 1961. The proposal is classified as designated development, under section 77A of the Environmental Planning & Assessment Act 1979, because it is for an underground coal mine, and consequently meets the criteria for designated development in schedule 3 of the Environmental Planning & Assessment Regulation 2000. BCA Classification: Class 5: Offices Class 6: Crib room Class 8: Workshop Class 9b: Bathhouse Class 10a: Gas drainage bore infrastructure De-watering bore infrastructure Class 10b: Coal conveyor Coal stockpile Note: 1) To find out when this consent becomes effective, see section 83 of the Environmental Planning & Assessment Act 1979 (EP&A Act); 2) To find out when this consent is liable to lapse, see section 95 of the EP&A Act; and 3) To find out about appeal rights, see section 97 of the EP&A Act. 2

SCHEDULE 2 DEFINITIONS AEMR Annual Environmental Management Report Applicant Bulga Coal Management Pty Limited BCA Building Code of Australia Bulga Mining Complex The development approved under this consent, together with the development approved under the consent for the Bulga Open Cut Coal Mine (DA 41-03-99), considered collectively Bore Any bore or well or excavation or other work connected or proposed to be connected with sources of sub-surface water, and used or proposed to be used or capable of being used to obtain supplies of such water whether the water flows naturally at all times or has to be raised whether wholly or at times by pumping or other artificial means CCC Community Consultative Committee Council Singleton Shire Council DA Development Application Day Day is defined as the period from 7am to 6pm on Monday to Saturday, and 8am to 6pm on Sundays and Public Holidays DECCW Department of Environment, Climate Change and Water Department Department of Planning Director-General Director-General of the Department of Planning, or delegate DII(Minerals) Department of Industry and Investment (Mineral Resources) EIS Environmental Impact Statement for Bulga Coal Continued Underground Operations EP&A Act Environmental Planning and Assessment Act 1979 EP&A Regulation Environmental Planning and Assessment Regulation 2000 Evening Evening is defined as the period from 6pm to 10pm GTA General Term of Approval Land Land means the whole of a lot in a current plan registered at the Land Titles Office at the date of this consent Land Acquisition Criteria Land Acquisition Criteria for air quality impacts and noise impacts are applied at a dwelling and/or a proposed dwelling Material harm to the environment Harm to the environment is material if it involves actual or potential harm to the health or safety of human beings or to ecosystems that is not trivial Minister Minister for Infrastructure and Planning, or delegate MOP Mining Operations Plan MSB Mine Subsidence Board Night Night is defined as the period from 10pm to 7am on Monday to Saturday, and 10pm to 8am on Sundays and Public Holidays NOW NSW Office of Water PCA Principal Certifying Authority appointed under Section 109E of the EP&A Act Privately-owned land Land excluding land owned by a mining company, where: A private agreement does not exist between the Applicant and the land owner; and There are no land acquisition provisions requiring the Applicant to purchase the land upon request from the land owner ROM Coal Run-of-mine coal RTA Roads and Traffic Authority Site Land to which the DA applies Vacant land Vacant land is defined as the whole of the lot in a current plan registered at the Land Titles Office that does not have a dwelling situated on the lot and is permitted to have a dwelling on that lot at the date of this consent. VAM Abatement Unit Ventilation Air Methane Abatement Unit 2007 SEE Statement of Environmental Effects for the Bulga Underground Southern Mining Area Modification Section 96(2) Application to Modify Consent DA 376-8-2003 3

TABLE OF CONTENTS 1. ADMINISTRATIVE CONDITIONS 5 2. SPECIFIC ENVIRONMENTAL CONDITIONS Acquisition Upon Request 7 Subsidence 7 Surface & Ground Water 8 Air Quality 11 Noise 13 Meteorological Monitoring 15 Aboriginal Heritage 16 Heritage 16 Flora & Fauna 17 Traffic & Transport 18 Visual Impact 18 Greenhouse Gas 18 Waste Minimisation 18 Hazards Management 19 Bushfire Management 19 Mine Exit Strategy 19 3. ADDITIONAL PROCEDURES FOR AIR QUALITY & NOISE MANAGEMENT 20 4. ENVIRONMENTAL MANAGEMENT, MONITORING, AUDITING & REPORTING Environmental Management Strategy 23 Environmental Monitoring Program 23 Annual Reporting 23 23 Community Consultative Committee 24 5. APPENDIX 1: SCHEDULE OF LAND 25 6. APPENDIX 2: RECEIVER LOCATION PLANS 28 7. APPENDIX 3: INDEPENDENT DISPUTE RESOLUTION PROCESS 30 4

SCHEDULE 3 ADMINISTRATIVE CONDITIONS Obligation to Minimise Harm to the Environment 1. The Applicant shall implement all practicable measures to prevent and/or minimise any harm to the environment that may result from the construction, operation, or rehabilitation of the development. Terms of Approval 2. The Applicant shall carry out the development generally in accordance with the: (a) DA 376-8-2003; (b) EIS titled Bulga Coal Continued Underground Operations, volumes 1-5, dated July 2003; (c) MOD 4-1-2006 and the letter from Umwelt (Australia) Pty Limited to the Department of Planning titled Section 96(1A) Modification of Bulga Coal Underground Operations (DA 376-8- 2003) Relocation of Men and Materials Drifts, dated 23 December 2005; (d) MOD 113-9-2006 Statement of Environmental Effects titled Coal Handling and Processing Plant Increased Throughput, dated September 2006; and (e) the modification application MOD 19-3-2007 and accompanying Statement of Environmental Effects entitled Statement of Environmental Effects for the Bulga Underground Southern Mining Area Modification Section 96(2) Application to Modify Consent DA 376-8-2003, prepared by Umwelt Environmental Consultants and dated March 2007; (f) the Response to Submissions prepared by Umwelt Environmental Consultants and dated July 2007; (g) the modification application 376-8-2003 MOD 4 and Environmental Assessment prepared by Umwelt (Australia) Pty Limited, dated December 2009, and the response to submissions letter dated 22 April 2010; and (h) the conditions of this consent. 3. If there is any inconsistency between the above documents, the latter document shall prevail over the former to the extent of the inconsistency. However, the conditions of this consent shall prevail over all such documents to the extent of any inconsistency. 4. The Applicant shall comply with any reasonable requirement/s of the Director-General arising from the Department s assessment of: (a) any reports, plans or correspondence that are submitted in accordance with this consent; and (b) the implementation of any actions or measures contained in these reports, plans or correspondence. Management Plans/Monitoring Programs 4A. Within 3 months of any modification to this consent, the Applicant shall review and if necessary revise all strategies/plans/programs required under this consent which are relevant to the modification, to the satisfaction of the Director-General. Limits on Approval 5. This consent lapses 27 years after the date it commences. 6. The Applicant shall not extract more than 14 million tonnes of ROM coal per calendar year from the development by underground mining methods 7. The Applicant shall not process more than 20 million tonnes of ROM coal per calendar year from the Bulga Complex. 7A. The Applicant shall not commence extraction in the Blakefield Seam in the Bulga Southern underground mining area, until the design of the coal transportation system between the Blakefield Seam development headings and the Bulga coal stockpile area, has been finalised and approved by the Minister. Surrender of Consents 8. Within 12 months of the date of this consent, the Applicant shall surrender all existing development consents for underground mining development at the site to the Director-General, in accordance with Clause 97 of the EP&A Regulation. 5

Structural Adequacy 9. The Applicant shall ensure that all new buildings and structures, and any alterations or additions to existing buildings and structures, are constructed in accordance with the relevant requirements of the BCA. Demolition Notes: Under Part 4A of the EP&A Act, the Applicant is required to obtain construction and occupation certificates for the proposed building works. Part 8 of the EP&A Regulation sets out the requirements for the certification of development. The development is located in the Patrick Plains Mine Subsidence District. Under section 15 of the Mine Subsidence Compensation Act 1961, the Applicant is required to obtain the Mine Subsidence Board s approval before constructing or relocating any improvements on the site. 10. The Applicant shall ensure that all demolition work is carried out in accordance with AS 2601-2001: The Demolition of Structures, or its latest version. Operation of Plant and Equipment 11. The Applicant shall ensure that all plant and equipment used at the site, including the rail loop on the site, are: (a) maintained in a proper and efficient condition; and (b) operated in a proper and efficient manner. Community Enhancement Contribution 12. Within 6 months of the date of this consent, or as agreed otherwise by Council, the Applicant shall pay Council up to $15,000 for water quality enhancement works in the Wollombi Brook. If Council has not carried out these enhancement works within 12 months of payment, the Applicant may retrieve the funds from Council. 6

SCHEDULE 4 SPECIFIC ENVIRONMENTAL CONDITIONS ACQUISITION UPON REQUEST 1. Upon receiving a written request for acquisition from the landowner of the land listed in Table 1, the Applicant shall acquire the land in accordance with the procedures in Conditions 9-11 of Schedule 5: Property D - Kennedy Property F - Russell Property H - Cobcroft Wines P/L Property L - Dwyer Estates P/L Property R - Myers 149 E. McInerney 6 I.B. Headley 150 E. McInerney 7 I.B. Headley 151 R.D. & L.M. Lewis 9 I.B. & J.D. Headley 216 R.D. & G.W. Turnbull 10 I.B. & J.D. Headley Table 1: Land subject to acquisition upon request Note: For more information on the alphabetical references to land used in this condition, see Table 4.1 and Figure 4.1 of the EIS, and for more information on the numerical references to land used in this condition, see the figures in Appendix 2. 2. If the Applicant submits a Subsidence Management Plan to the DII(Minerals) that includes longwall mining or subsidence impacts on either of the winery buildings within Property G, and subsequently receives a written request for acquisition from the owner of Property G, then the Applicant shall acquire the land in accordance with the procedures in Conditions 9-11 of Schedule 5. Note: For more information on the alphabetical references to land used in this condition, see Table 4.1 and Figure 4.1 of the EIS. 3. While the land listed in Conditions 1 and 2 are privately-owned, the Applicant shall implement all practicable measures to ensure that the impacts of the development comply with the predictions in the EIS, to the satisfaction of the Director-General. SUBSIDENCE Note: This development will generally be regulated under the new approval process for managing the impacts of coal mining subsidence under the Mining Act 1992, which takes effect on 18 March 2004. The company has made a commitment to prepare and implement individual property subsidence management plans for all landowners that would be affected by subsidence caused by the development. Subsidence Management Plan 4. Before carrying out any underground mining operations that will potentially lead to subsidence of the land surface, the Applicant shall prepare a Subsidence Management Plan for those operations in accordance with the following DII(Minerals) documents (or the most current and updated versions of these documents): New Approval Process for Management of Coal Mining Subsidence - Policy; and Guideline for Applications for Subsidence Management Approvals, to the satisfaction of the Director-General of DII(Minerals). 4(A). In fulfilling condition 4 above, the Applicant must: (a) prepare Subsidence Management Plans for longwall panels SB1 SB7 and SEB1 SEB2. These plans must take into account subsidence predictions arising from any case studies (i.e. empirical data) made available by the DII(Minerals) and be reviewed by an independent expert; (b) submit an independent expert s review of the: subsidence, groundwater and surface water monitoring results (compared with predictions) for panel SB1 (and, where available) panel SB2 to the DII(Minerals) three months prior to the commencement of extraction of panel SB3; remaining subsidence, groundwater and surface water monitoring results (compared with predictions) for panel SB2 to the DII(Minerals) one month prior to the commencement of extraction of panel SB3; and 7

(c) revise the Subsidence Management Plans required under paragraph (a), prior to longwall extraction in panel SB3, if the reviews required under paragraph (b) indicate that the plans should be modified or if directed by the Director-General. Any revised plans must take into account the recalibration of subsidence models using subsidence data available from panels SB1 and SB2 and results of the audit undertaken under condition 5 below. Independent Audit 5. Prior to seeking approval from the DII(Minerals) for a set of longwall panels (excluding the first set of longwall panels included in the first Subsidence Management Plan accepted under this development consent), unless the Director-General directs otherwise, the Applicant shall commission a suitably qualified person, whose appointment has been approved by the Director-General, to conduct an independent audit of the subsidence, surface water, and ground water impacts of the development. The audit shall: (a) review the monitoring data for the development; (b) identify any trends in the monitoring data; (c) examine the subsidence, surface water, and ground water impacts of the development; (d) compare these impacts against the relevant impact assessment criteria and predictions in the EIS; and, if necessary, (e) recommend measures to reduce, mitigate, or remediate these impacts. 6. Within 3 months of commissioning this audit, or as other wise agreed by the Director-General, the Applicant shall submit a copy of the audit report to the Director-General. 7. If the independent audit determines that the subsidence, surface water, and/or ground water impacts resulting from the underground mining operations are greater than those predicted, the Applicant shall: (a) assess the significance of these impacts; (b) investigate measures to minimise these impacts, including modifying subsequent mine plans; and (c) describe what measures would be implemented to reduce, minimise, mitigate or remediate these impacts in the future; to the satisfaction of the Director-General. 1 SURFACE & GROUND WATER Note: The Applicant is required to obtain licences for the development under the Water Act 1912 and the Protection of the Environment Operations Act 1997. Pollution of Waters 8. Except as may be expressly provided by an Environment Protection Licence, the Applicant shall comply with section 120 of the Protection of the Environment Operations Act 1997 during the carrying out of the development. Discharge Limits 9. Except as may be expressly provided by an Environment Protection Licence or the Protection of the Environment Operations (Hunter River Salinity Trading Scheme) Regulation 2002, the Applicant shall: (a) not discharge more than 55 ML/day from the licensed discharge point/s at the development; and (b) ensure that the discharges from any licensed discharge points comply with the limits in Table 2: Pollutant Units of 100 percentile concentration limit measure ph ph 6.5 ph 9.5 Non-filterable residue mg/litre NFR 120 Table 2: Discharge Limits Note: This condition does not authorise the pollution of waters by any other pollutants. 1 Incorporates DECCW GTA 8

Site Water Balance 10. 2 Each year, the Applicant shall: (a) review the site water balance for the development against the predictions in the EIS; (b) re-calculate the site water balance for the development; and (c) report the results of this review in the AEMR. Flood Exclusion Levee 11. The Applicant shall design, construct, maintain, and rehabilitate the Flood Exclusion Levee to the satisfaction of the Director-General. This levee shall: (a) remain stable under a 1 in a 100 year ARI flood event; and (b) not cause an increase in backwater stream heights in Wollombi Brook of greater than 20mm upstream of the confluence of the unnamed watercourse and Wollombi Brook under conditions up to and including a 1 in a 100 year ARI flood event. 12. Within one month of completing the construction of the Flood Exclusion Levee, the Applicant shall submit an as-executed report, certified by a practising registered engineer, to the Director-General. Monitoring 13. The Applicant shall: (a) measure: the volume of water discharged from the site via the licensed discharge points; water use on the site; dam and water structure storage level for dams associated with the mine discharge system; water transfers across the site; and water transfers between the site and surrounding mines; (b) monitor the quality of the surface water: discharged from the licensed discharge point/s at the development; and upstream and downstream of the development; (c) monitor flows in the Wollombi Brook; (d) monitor the volume and quality of water inflows to and from the underground workings; and (e) monitor regional ground water levels and quality in the alluvial, coal seam, and inter-burden aquifers during the development and at least 10 years after mining, and (f) periodically assess groundwater pressure response in the coal measures; in consultation with DECCW and NOW and to the satisfaction of the Director-General. Site Water Management Plan 14. Within 12 months of the date of this consent, the Applicant shall prepare or update the existing Site Water Management Plan for the development in consultation with DECCW, and to the satisfaction of the Director-General. This plan must include: (a) the predicted site water balance; (b) a Surface Water Monitoring Program; (c) a Ground Water Monitoring Program; (d) a Surface and Ground Water Response Plan; and (e) a strategy for decommissioning water management structures on the site. 15. 3 The Surface Water Monitoring Program shall include: (a) detailed baseline data on surface water flows and quality in the Wollombi Brook and Loders Creek; (b) surface water impact assessment criteria; (c) a program to monitor surface water flows and quality in the Wollombi Brook and Loders Creek; and (d) a program to monitor the effectiveness of the Erosion and Sediment Control Plan. 16. The Ground Water Monitoring Program shall include: (a) detailed baseline data on ground water levels and quality, based on statistical analysis, to benchmark the pre-mining natural variation in groundwater levels and quality; (b) ground water impact assessment criteria; 2 These calculations must exclude the clean water system, including any sediment control structures, and any dams in the mine lease area which fall under the Maximum Harvestable Right Dam Capacity; include any dams that are licensable under Section 205 of the Water Act 1912, and water harvested from any non-harvestable rights dam on the mine lease area; address balances of inflows, licensed water extractions, and transfers of water from the site to other sites; include an accounting system for water budgets; and include a salt budget. 3 Incorporates DECCW GTA 9

(c) (d) a program to monitor the volume and quality of ground water seeping into the underground mine workings; and a program to monitor regional ground water levels and quality in the alluvial and coal seam aquifers. 17. The Surface and Ground Water Response Plan shall include: (a) measures to mitigate any adverse impacts on existing water supply bores or wells in either the alluvial or coal measure aquifer systems; (b) measures to remediate any connective cracking between the underground mine workings and any surface water stream channels, floodplain areas, or the alluvial aquifer; (c) measures to address a decrease in throughflow rates caused by the development within the Wollombi Brook/Monkey Place Creek alluvium adjacent to or downstream of the development within the mine lease boundary; and (d) the procedures that would be followed if any unforeseen impacts are detected during the development. Flood Levee Plan 18. Three months prior to the commencement of construction of the flood levee on the northern drainage line, the Applicant shall submit a Flood Exclusion Levee Plan for the Director-General s approval. The Plan shall include: (a) the detailed design and specifications of the levee, including any measures to allow waters to flow through the levee when required; (b) the measures that would be implemented to minimise soil erosion and the potential for the migration of sediments to downstream waters; (c) a construction program for the levee, describing how the work would be staged, and integrated with the proposed works in the Northern Drainage Line; and (d) a program to inspect and maintain the levee and associated revegetation works during the development. Erosion and Sediment Control Plan 19. Three months prior to the commencement of construction works outside the Bulga Complex Water Management System or subsidence remediation, the Applicant shall submit an Erosion and Sediment Control Plan for the Director-General s approval. The Plan shall: (a) be consistent with the requirements of the Department of Housing s Managing Urban Stormwater: Soils and Construction manual; (b) identify activities that could cause soil erosion and generate sediment; (c) (d) describe the location, function, and capacity of erosion and sediment control structures; and describe the measures to minimise soil erosion and the potential for the migration of sediments to downstream waters. Note: The Erosion & Sediment Control Plan should only relate to development that is scheduled to occur outside the mine s dirty water system. Given that this development is likely to be staged, the Department accepts that the Erosion & Sediment Control Plan is likely to be prepared in stages to coincide with the relevant stages of the development. Surface & Sub-surface Investigation & Monitoring Program 20. Within 12 months of the date of this consent, or prior to the commencement of longwall extraction in the approved panels, whichever occurs first, the Applicant shall develop and implement a surface and subsurface investigation and monitoring program to assess the likely fracturing of geological strata and hydraulic property changes above each longwall panel, to the satisfaction of the Director- General. This program shall: (a) assess the impact on groundwater resources and surface expression resulting from underground mining at varying depths; (b) compare the results from all longwall panels against pre-mining baseline geological conditions, in order to assess the level of variability of fracture and changes in hydraulic properties between panels; and (c) be repeated for each coal seam as it is mined. Final Void Management 21. At least 5 years prior to the completion of the development, the Applicant shall evaluate the potential long-term impacts of any final pit voids on groundwater resources, and develop an appropriate management plan to the satisfaction of the Director-General. 10

AIR QUALITY Impact Assessment Criteria 22. The Applicant shall ensure that the air pollution generated by the development does not exceed the criteria listed in Tables 3, 4, and 5 at any privately-owned land. Pollutant Averaging period Criterion Total suspended particulate (TSP) matter Annual 90 µg/m 3 Particulate matter < 10 µm (PM 10) Annual 30 µg/m 3 Table 3: Long term impact assessment criteria for particulate matter Pollutant Averaging period Criterion Particulate matter < 10 µm (PM 10) 24 hour 50 µg/m 3 Table 4: Short term impact assessment criterion for particulate matter Pollutant Averaging period Maximum increase in deposited dust level Maximum total deposited dust level Deposited dust Annual 2 g/m 2 /month 4 g/m 2 /month Table 5: Long term impact assessment criteria for deposited dust Note: Deposited dust is assessed as insoluble solids as defined by Standards Australia, 1991, AS 3580.10.1-1991: Methods for Sampling and Analysis of Ambient Air - Determination of Particulates - Deposited Matter - Gravimetric Method. Land Acquisition Criteria 23. If the air pollution generated by the development exceeds the criteria in Tables 6, 7, and 8 at any privately-owned land, the Applicant shall, upon receiving a written request for acquisition from the landowner, acquire the land in accordance with the procedures in Conditions 9-11 of Schedule 5. Pollutant Averaging period Criterion Total suspended particulate (TSP) matter Annual 90 µg/m 3 Particulate matter < 10 µm (PM 10) Annual 30 µg/m 3 Table 6: Long term land acquisition criteria for particulate matter Pollutant Averaging period Criterion Percentile 1 Basis Particulate matter < 10 µm (PM 10) 24 hour 150 µg/m 3 Particulate matter < 10 µm (PM 10) 24 hour 50 µg/m 3 99 2 Total 3 98.6 Increment 4 Table 7: Short term land acquisition criteria for particulate matter 1 Based on the number of block 24 hour averages in an annual period. 2 Excludes extraordinary events such as bushfires, prescribed burning, dust storms, sea fog, fire incidents, illegal activities or any other activity agreed by the Director-General in consultation with the DECCW. 11

3 Background PM 10 concentrations due to all other sources plus the incremental increase in PM 10 concentrations due to the development alone. 4 Incremental increase in PM 10 concentrations due to the development alone. Pollutant Averaging period Maximum increase in deposited dust level Maximum total deposited dust level Deposited dust Annual 2 g/m 2 /month 4 g/m 2 /month Odour Table 8: Long term land acquisition criteria for deposited dust Note: Deposited dust is assessed as insoluble solids as defined by Standards Australia, 1991, AS 3580.10.1-1991: Methods for Sampling and Analysis of Ambient Air - Determination of Particulates - Deposited Matter - Gravimetric Method. 24. Except as may be expressly provided by an Environment Protection Licence, the Applicant shall not cause or permit the emission of offensive odour beyond the site. 4 Monitoring 25. The Applicant shall monitor (by sampling and obtaining results by analysis) the concentration of each pollutant in Table 9 to the satisfaction of DECCW and the Director-General, using the specified averaging period, frequency, and sampling method: Pollutant Units of Averaging Frequency Sampling method 1 Measure Period TSP µg/m 3 24 hour, annual 1 day in 6 AM-15 Dust Deposition g/m²/month Month, annual Continuous AM-19 Siting - - - AM-1 Table 9: Air quality monitoring 1 NSW EPA, 2001, Approved Methods for the Sampling and Analysis of Air Pollutants in NSW. 2 Standards Australia, 2001, AS3580.9.8-2002, Method for Sampling and Analysis of Ambient Air - Determination of Suspended Particulate Matter - PM 10 Continuous Direct Mass Method using a Tapered Element Oscillating Microbalance Analyser, or any other method that is approved by the DECCW and the Director-General. 26. Within 12 months of this consent, the Applicant shall prepare an Air Quality Monitoring Program, in consultation with DECCW, and to the satisfaction of the Director-General. Post Commissioning Report 27. Within 3 months of commissioning a ventilation shaft discharge vent, the Applicant shall: (a) carry out ventilation shaft monitoring (by sampling and obtaining results by analysis) of the concentration of each parameter in Table 10, using the specified sampling method; and (b) submit the results to DECCW. Parameter Units of Sampling method 1 Measure Solid particles mg/m3 TM-15 Odour OU OM-7 Velocity m/s TM-2 Volumetric flow rate m3/s TM-2 Temperature C TM-2 Moisture % TM-22 Dry gas density kg/m3 TM-23 Molecular weight of stack gases g/g.mol TM-23 Carbon dioxide % TM-24 Selection of sampling positions - TM-1 Table 10: Ventilation Shaft Monitoring 1 NSW EPA, 2001, Approved Methods for the Sampling and Analysis of Air Pollutants in NSW. 4 Incorporates DECCW GTA 12

28. If the results of the ventilation shaft monitoring are outside the range used in the dispersion modelling study in the EIS as modified by the 2007 SEE, the Applicant shall reassess the odour and dust impacts from the ventilation shafts, and submit the results to DECCW. Post Commissioning Report Power Generation Plant and VAM Abatement Unit 28A Within 3 months of commissioning any gas engine within the power generation plant and/or the VAM abatement unit, the Applicant shall: (a) carry out air emissions monitoring (by sampling and obtaining results by analysis) of the concentration of each parameter in Table 11, for the stack serving each gas-fired engine and the stack serving the VAM abatement unit; (b) demonstrate compliance with DECCW s ground level concentration criteria; and (c) submit the results to DECCW. Table 11: Power Generation Plant and VAM Abatement Unit Monitoring Parameter Units of Sampling method 1 Measure Carbon monoxide mg/m3 TM-32 Nitrogen dioxide (NO 2) or nitric oxide (NO) mg/m3 OM-11 or both, as NO 2 equivalent Volatile organic compounds mg/m3 TM-34 Volumetric flow rate m3/s TM-2 Oxygen % TM-25 Moisture % TM-22 Dry gas density kg/m3 TM-23 Molecular weight of stack gases g/g.mol TM-23 Selection of sampling positions - TM-1 1 NSW EPA, 2001, Approved Methods for the Sampling and Analysis of Air Pollutants in NSW. 5 NOISE Land Acquisition Criteria 29. If the noise generated by the development exceeds the criteria in Table 12 at any residence on privately-owned land or on more than 25 per cent of any privately-owned land, the Applicant shall, upon receiving a written request for acquisition from the landowner, acquire the land in accordance with the procedures in conditions 6-8 of schedule 3. Table 12: Land Acquisition Criteria db(a) Day/Evening/Night L Aeq(15 minute) Land 40 All privately owned land, excluding the land listed in Table 1. Notes: Noise generated by the development is to be measured and evaluated in accordance with the relevant procedures and exemptions (including certain meteorological conditions) of the NSW Industrial Noise Policy. These noise limits do not apply on land if the Applicant has a negotiated agreement with the relevant owner/s of that land to generate higher noise levels, and the Applicant has advised the Department in writing of the terms of this agreement. Noise Impact Assessment Criteria 30. The Applicant shall ensure that the noise generated by the development does not exceed the noise impact assessment criteria in Table 13 at any residence on privately-owned land, or on more than 25 percent of any privately-owned land. Table 13: Noise Impact Assessment Criteria db(a) Residence/Land Day Evening Night L Aeq(15 min) L Aeq(15 min) L Aeq(15 min) L A1(1 min) 5 Incorporates DECCW GTAs 13

Day Evening Night Residence/Land L Aeq(15 min) L Aeq(15 min) L Aeq(15 min) L A1(1 min) 249 40 40 40 45 8, 195 39 39 39 45 157, 179, 307 38 38 38 45 1, 2s, 154, 237, 239, 250, 252, 261, 262, 308 37 37 37 45 232 37 37 36 45 97, 153, 163, 169e, 171, 183, 184, 197, 217s, 217m, 217n, 234, 235, 240, 263, 264, 266, 267, 272, 273, 274, 276, 279, 280, 282 36 36 36 45 33, 156w, 230, 281 36 36 35 45 All other privately owned land, excluding the land listed in Table 1. 35 35 35 45 Notes: To interpret the numerical references to land referred to in Tables 1 and 13, see the applicable figures in Appendix 2. Noise generated by the development is to be measured and evaluated in accordance with the relevant procedures and exemptions (including certain meteorological conditions) of the NSW Industrial Noise Policy. These noise limits do not apply at residences or land if the Applicant has a negotiated agreement with the relevant owner/s of that residence or land to generate higher noise levels, and the Applicant has advised the Department in writing of the terms of this agreement. Additional Noise Mitigation Measures 31. Upon receiving a written request from: a landowner of the land listed in Table 1 (unless the landowner has requested acquisition); or a landowner of residence/land 8, 157, 179, 195, 249 or 307 (unless a negotiated agreement is in place); or the owner of any other residence where subsequent operational noise monitoring shows the noise generated by the development is greater than, or equal to, 38 db(a) L Aeq(15 minute) (unless a negotiated agreement is in place), the Applicant shall implement additional noise mitigation measures such as double glazing, insulation, and/or air conditioning at any residence on the land in consultation with the landowner. These additional mitigation measures must be reasonable and feasible. The Applicant shall notify all landowners by 31 July 2010 that they are entitled to receive additional noise mitigation measures in accordance with this condition, to the satisfaction of the Director-General. If within 3 months of receiving such a request from the landowner, the Applicant and the landowner cannot agree on the measures to be implemented, or there is a dispute about the implementation of these measures, then either party may refer the matter to the Director-General for resolution. Cumulative Noise Impact Assessment Criteria 32. The Applicant shall implement all reasonable and feasible measures to ensure that the noise generated by the development combined with the noise generated by other mines does not exceed the amenity criteria in Table 14 at any residence on privately-owned land or on more than 25 per cent of any privately-owned land, to the satisfaction of the Director-General. Table 14: Cumulative Noise Impact Assessment Criteria db(a) L Aeq (period) Location All privately owned land, excluding the land listed in Table 1. Day Evening Night L Aeq(11 hour) L Aeq(4 hour) L Aeq(9 hour) 50 45 40 14

Note: Cumulative noise is to be measured and evaluated in accordance with the relevant procedures and exemptions (including certain meteorological conditions) of the NSW Industrial Noise Policy. Cumulative Land Acquisition Criteria 32A. If the cumulative noise generated by the development combined with the noise generated by other mines exceeds the amenity criteria in Table 15 at any residence on privately owned land, or on more than 25% of privately owned land, then upon receiving a written request from the landowner, the Applicant shall take all reasonable and feasible measures to acquire the land on as equitable basis as possible with the relevant mines, in accordance with the procedures in conditions 9-11 of schedule 5, to the satisfaction of the Director-General. Table 15: Cumulative Land Acquisition Criteria db(a) Location All privately owned land, excluding the land listed in Table 1. Day Evening Night L Aeq(11 hour) L Aeq(4 hour) L Aeq(9 hour) 53 48 43 Notes: For the purpose of this condition, the expression Applicant in conditions 9-11 of schedule 5 should be interpreted as the Applicant and any other relevant mines. Cumulative noise is to be measured and evaluated in accordance with the relevant procedures and exemptions (including certain meteorological conditions) of the NSW Industrial Noise Policy. Continuous Improvement 32B. The Applicant shall: (a) implement all reasonable and feasible best practice noise mitigation measures; (b) progressively upgrade and replace its mobile equipment fleet; (c) report the implementation and effectiveness of these measures in the AEMR, to the satisfaction of the Director-General. Noise Management Plan 32C. The Applicant shall prepare and implement a Noise Management Plan for the development to the satisfaction of the Director-General. This program must: (a) be prepared by a suitably qualified expert whose appointment has been approved by the Director-General, and submitted to the Director-General for approval by 30 August 2010; and (b) include a: combination of unattended and attended monitoring measures; noise monitoring protocol for evaluating the contribution of low frequency noise; noise monitoring protocol for evaluating compliance with the relevant criteria for noise impact assessment, land acquisition, cumulative impact assessment and cumulative acquisition in this consent; and response protocol that will immediately be followed if noise emissions are nearing or exceeding these criteria and a description of what contingency plans will be implemented on site if this occurs. Notes: The management responses to be followed in the event that noise emissions are nearing or exceeding the noise criteria in this consent should be staged in a manner that is commensurate with the level of noise emissions that may occur. Management responses should include relocating, modifying and/or ceasing operations until the exceedance is addressed and rectified. In the event of a breach of the noise criteria in this approval, noise traces for the offending period should be forwarded to the Department and DECCW as soon as practicable following the event. 6 METEOROLOGICAL MONITORING 33. The Applicant shall monitor the parameters specified in Table 16 to the satisfaction of the Director- General, using the specified units of measure, averaging period, frequency, and sampling method in the table. 6 Incorporates DECCW GTA 15

Parameter Units of Averaging period Frequency Sampling measure method 1 Lapse rate ºC/100m 1 hour Continuous Note 2 Rainfall mm/hr 1 hour Continuous AM-4 Sigma Theta @ 10 m 1 hour Continuous AM-2 Siting - - - AM-1 Temperature @ 10 m K 1 hour Continuous AM-4 Temperature @ 2 m K 1 hour Continuous AM-4 Total Solar Radiation @ 10m W/m 2 1 hour Continuous AM-4 Wind Direction @ 10 m 1 hour Continuous AM-2 Wind Speed @ 10 m m/s 1 hour Continuous AM-2 Table 16: Meteorological monitoring 1 NSW EPA, 2001, Approved Methods for the Sampling and Analysis of Air Pollutants in NSW. 2 The Applicant shall calculate lapse rate from measurements made at 2m and 10m. 7 ABORIGINAL CULTURAL HERITAGE Note: The Applicant is required to obtain consent from DECCW under the National Parks Wildlife Act 1974 to destroy Aboriginal sites and objects on the site. Conservation Agreement 34. The Applicant shall protect BCO10 and the associated landscape context within the proposed conservation area east of Wollombi Brook (see Figure 13.3 in the Bulga Coal Continued Underground Operations EIS), and consider options for extending this area to the satisfaction of DECCW. Scarred Tree 35. The Applicant shall protect the scarred tree at Bulga 6 (see Figure 7.2 in Appendix 13 of the Bulga Coal Continued Underground Operations EIS) to the satisfaction of DECCW. Section 90 Consents 36. The Applicant will receive Section 90 consents from DECCW to destroy the following Aboriginal artefact find locations, and the deposits between them: BCO2, BCO21, BMU1, BMU2 (B71 & Saxonvale B), BMU12, BMU17, IF Bulga South, GIF-IF1, GIF-IF2, GIF-IF3, GIF-IF4, BP2, G2, G3, G4, G9, G11, PART BCO1 (Saxonvale A), BCO3, BCO10 (G7, G6, G8, Bulga 7). Salvage 37. The Applicant shall develop a salvage program/s for the following sites in consultation with the Aboriginal community and to the satisfaction of DECCW: BCO2, BCO21, BMU2 (B71 & Saxonvale B), BP2, G2, G3, G4, G9, G11, PART BCO1 (Saxonvale A), BCO3, BCO10 (G7, G6, G8, Bulga 7). Note: The program/s will be considered as part of the Section 90 consent process. Aboriginal Heritage Management Plan 38. The Applicant shall prepare an Aboriginal Heritage Management Plan for the site, in consultation with the Aboriginal community, and to the satisfaction of DECCW. Trust Fund Contribution 39. Within 6 months of the date of this consent, or as agreed otherwise by the Director-General, the Applicant shall contribute $50,000 to the Hunter Aboriginal Cultural Heritage Trust Fund for further investigations into Aboriginal heritage, as defined by the Trust Deed. HERITAGE Note: For more information on the references used in the following conditions see Figure 13.1 of the EIS. Conservation 40. The Applicant shall conserve heritage site BH15 to the satisfaction of the Director-General. 7 Incorporates DECCW GTAs 16

Archival Record 41. The Applicant shall investigate and prepare an archival record of heritage sites BH9 and BH11 in accordance with the requirements of the NSW Heritage Office, and to the satisfaction of the Director- General. Other Measures 42. The Applicant shall: (a) prepare a photographic record of the condition and integrity of heritage site BH13 before, during and after mining; (b) mark BH12 to prevent accidental destruction; and (c) fence and signpost BH7 to the satisfaction of the Director-General. FAUNA & FLORA Habitat Creation and Conservation 43. The Applicant shall: (a) take all practicable measures to minimise vegetation clearing during the development, and wherever practicable, avoid clearing the existing woodland vegetation on site; (b) establish and maintain the proposed flora and fauna corridors on site (see Figure 12.2 of the EIS); (c) investigate the feasibility of extending these corridors into the proposed voluntary conservation area (see Figure 12.2 of the EIS); (d) conserve and maintain the existing Warkworth Sands Woodland ecological community (see Figure 12.1 of the EIS); (e) investigate the potential distribution of the Warkworth Sands Woodland ecological community on company owned land on and adjacent to the site, and consider options for providing long-term protection to the existing and potential areas of the Warkworth Sands Woodland ecological community; (f) Re-establish and maintain riparian vegetation along the northern and southern drainage lines following remedial works (see Figures 7.2 & 7.3 of the EIS); and (g) Create temporary aquatic habitat in the proposed northern diversion channel during creek restoration works (see Figures 7.2 & 7.3 of the EIS), and re-establish and maintain aquatic habitat following remedial works in the northern and southern drainage lines (see Figures 7.2 & 7.3 of the EIS); and (h) Conduct regular flora and fauna monitoring on site during the development, to the satisfaction of the Director-General. Flora & Fauna Management Plan 44. Within 12 months of the date of this consent, the Applicant shall prepare a Flora & Fauna Management Plan for the development, in consultation with the Hunter Coalfield Flora and Fauna Advisory Committee, and to the satisfaction of the Director-General. This plan must include: (a) baseline data of the existing habitat on site; (b) a detailed description of what measures would be implemented to satisfy the requirements in Condition 43; (c) (d) (e) (f) Annual Review performance/completion criteria for the habitat creation and conservation works; the detailed procedures to: salvage and reuse material from the site; clear vegetation on site; control erosion and sediment flows; collect and propagate seeds from the local area; control weeds; control access to certain areas on site; manage any potential conflicts between flora and fauna and Aboriginal heritage a flora and fauna monitoring program; and a description of who would be responsible for monitoring, reviewing, and implementing the plan. 45. The Applicant must: (a) review the performance of the Flora & Fauna Management Plan, annually, in consultation with the Hunter Coalfield Flora & Fauna Advisory Committee; and 17

(b) revise the Flora & Fauna Management Plan, as necessary to take into account any recommendations from the annual review. Hunter Coalfield Flora & Fauna Advisory Committee Contribution 46. The Applicant shall contribute a reasonable amount, up to $5,000, each year towards the operation of the Hunter Coalfield Flora & Fauna Advisory Committee. TRAFFIC & TRANSPORT New Access Intersections Note: The Applicant requires Council approval under the Roads Act 1993 for any works within the public road reserve. 47. 8 The Applicant shall design, construct and maintain the proposed new Type C access intersections with Broke Road to the satisfaction of Council. Conveyors 48. The Applicant shall design and construct the proposed conveyors over Broke Road to the satisfaction of Council. 49. The Applicant shall ensure that all construction work within the transmission line easement is carried out to the satisfaction of Transgrid. VISUAL IMPACT Landscaping & Visual Screening 50. The Applicant shall: (a) landscape the proposed access intersections off Broke Road within 3 months of completing construction works; and (b) maintain and augment as required, the visual screening along Broke Road throughout the life of the development to the satisfaction of the Director-General. Location & Construction of Gas Plants, and Gas & Dewatering Bores 51. The Applicant shall minimise the potential visual impacts associated with locating and constructing the proposed gas plants, and gas and dewatering bores on site to the satisfaction of the Director- General. Lighting Emissions 52. The Applicant shall take all practicable measures to mitigate off-site lighting impacts from the development to the satisfaction of the Director-General. 53. All external lighting associated with the development shall comply with Australian Standard AS4282 (INT) 1995 Control of Obtrusive Effects of Outdoor Lighting. GREENHOUSE GAS 54. The Applicant shall: (a) monitor the greenhouse gas emissions generated by the development; (b) investigate ways to reduce greenhouse gas emissions on site; and (c) report on these investigations in the AEMR, to the satisfaction of the Director-General. WASTE MINIMISATION 55. The Applicant shall minimise the amount of waste generated by the development to the satisfaction of the Director-General. 8 Incorporates RTA GTA 18

HAZARDS MANAGEMENT Spontaneous Combustion 56. The Applicant shall take the necessary measures to prevent, as far as is practical, spontaneous combustion on the site. Dangerous Goods 57. The Applicant shall ensure that the storage, handling, and transport of dangerous goods is done in accordance with the relevant Australian Standards, particularly AS1940 and AS1596, and the Dangerous Goods Code. BUSHFIRE MANAGEMENT 58. The Applicant shall: (a) ensure that the development is suitably equipped to respond to any fires on-site; and (b) assist the Rural Fire Service and emergency services as much as possible if there is a fire onsite during the development. MINE EXIT STRATEGY 59. The Applicant shall work with the Council to investigate the minimisation of adverse socio-economic effects of a significant reduction in local employment levels and closure of the development at the end of its life. 19

SCHEDULE 5 ADDITIONAL PROCEDURES FOR AIR QUALITY, NOISE MANAGEMENT AND SUBSIDENCE MANAGEMENT NOTIFICATION OF LANDOWNERS 1. Within 1 month of the date of this modification, the Applicant shall notify the landowners of the land listed in Table 1 of schedule 4 in writing that they have the right to require the Applicant to acquire their land at any stage during the development. 2. If the results of monitoring required in schedule 4 identify that impacts generated by the development are greater than the impact assessment criteria in schedule 4, except where this is predicted in the EA, and except where a negotiated agreement has been entered into in relation to that impact, then the Applicant shall notify the Director-General and the affected landowners and tenants (including tenants of mine owned properties) accordingly, and provide quarterly monitoring results to each of these parties until the results show that the development is complying with the criteria in schedule 4. 3. Within 6 months of the date of this consent, the Applicant shall develop a procedure in consultation with DECCW and NSW Health, for notifying landowners and tenants referred to in Condition 1. This procedure must ensure that: (a) all existing and future tenants are advised in writing about: air quality impacts likely to occur at the residence during the operational life of the mine; and likely health and amenity impacts associated with exposure to particulate matter; (b) the written advice in (a) is based on current air quality monitoring data, dispersion modelling results, research and literature; and (c) there is an ongoing process for providing current air quality monitoring data, dispersion modelling results, research and literature to the tenants. INDEPENDENT REVIEW 4. If a landowner considers the development to be exceeding the impact assessment criteria in schedule 4, then he/she may ask the Director-General in writing for an independent review of the impacts of the development on his/her land. If the Director-General is satisfied that an independent review is warranted, the Applicant shall within 3 months of the Director-General advising that an independent review is warranted: (a) consult with the landowner to determine his/her concerns; (b) commission a suitably qualified, experienced and independent person, whose appointment has been approved by the Director-General, to conduct monitoring on the land, to: determine whether the development is complying with the relevant impact assessment criteria in schedule 4; and identify the source(s) and scale of any impact on the land, and the development s contribution to this impact; and (c) give the Director-General and landowner a copy of the independent review. 5. If the independent review determines that the development is complying with the relevant impact assessment criteria in schedule 4, then the Applicant may discontinue the independent review with the approval of the Director-General. 6. If the independent review determines that the development is not complying with the relevant impact assessment criteria in schedule 4, and that the development is primarily responsible for this noncompliance, then the Applicant shall: (a) implement all reasonable and feasible measures, in consultation with the landowner, to ensure that the development complies with the relevant criteria and conduct further monitoring to determine whether these measures ensure compliance; or (b) secure a written agreement with the landowner to allow exceedances of the criteria in schedule 4, to the satisfaction of the Director-General. If the Applicant is unable to finalise an agreement with the landowner, then the landowner may refer the matter to the Director-General for resolution. If the additional monitoring referred to under paragraph (a) above determines that the development is complying with the relevant criteria in schedule 4, then the Applicant may discontinue the independent review with the approval of the Director-General. 20

7. If the independent review determines that the development is not complying with the air quality and/or noise impact assessment criteria listed in schedule 4 at the dwelling, but that several mines are responsible for this non-compliance, then the Applicant shall, with the agreement of the landowner and other mine(s) prepare and implement a Cumulative Air Quality and/or Noise Impact Management Plan for the land to the satisfaction of the Director-General. This plan must provide the joint approach to be adopted by the Applicant and other mine(s) to manage cumulative air quality and/or noise impacts at the landowner s dwelling, and the acquisition of any land. If the Applicant is unable to finalise an agreement with the landowner and/or other mine(s), and/or prepare a Cumulative Air Quality and Noise Impact Management Plan, then the Applicant or landowner may refer the matter to the Director-General for resolution. If the matter cannot be resolved within 21 days, the Director-General shall refer the matter to an Independent Dispute Resolution Process. If, following the Independent Dispute Resolution Process, the Director-General decides that the Applicant shall acquire all or part of the landowner s land, then the Applicant shall acquire this land in accordance with the procedures in conditions 9-11 below. 8. If the landowner disputes the results of the independent review (referred to in condition 4), either the Applicant or the landowner may refer the matter to the Director-General for resolution. If the matter cannot be resolved within 21 days, the Director-General shall refer the matter to an Independent Dispute Resolution Process. LAND ACQUISITION 9. Within 3 months of receiving a written request from a landowner with acquisition rights, the Applicant shall make a binding written offer to the landowner based on: (a) the current market value of the landowner s interest in the property at the date of this written request, as if the property was unaffected by the development, having regard to the: existing and permissible use of the land, in accordance with the applicable planning instruments at the date of the written request; and presence of improvements on the property and/or any approved building or structure which has been physically commenced at the date of the landowner s written request, and is due to be completed subsequent to that date, but excluding any improvements that have resulted from the implementation of the additional noise mitigation measures in condition 31 of schedule 4; (b) the reasonable costs associated with: relocating within the Singleton local government area, or to any other local government area determined by the Director-General; and obtaining legal advice and expert advice for determining the acquisition price of the land, and the terms upon which it is to be acquired; and (c) reasonable compensation for any disturbance caused by the land acquisition process. However, if at the end of this period, the Applicant and landowner cannot agree on the acquisition price of the land, and/or the terms upon which the land is to be acquired, then either party may refer the matter to the Director-General for resolution. Upon receiving such a request, the Director-General shall request the President of the NSW Division of the Australian Property Institute (API) to appoint a qualified independent valuer to: (a) consider submissions from both parties; (b) determine a fair and reasonable acquisition price for the land and/or the terms upon which the land is to be acquired, having regard to the matters referred to in paragraphs (a)-(c) above; (c) prepare a detailed report setting out the reasons for any determination; and (d) provide a copy of the report to both parties and the Director-General. Within 14 days of receiving the independent valuer s report, the Applicant shall make a binding written offer to the landowner to purchase the land at a price not less than the independent valuer s determination. However, if either party disputes the independent valuer s determination, then within 14 days of receiving the independent valuer s report, they may refer the matter to the Director-General for review. Any request for a review must be accompanied by a detailed report setting out the reasons why the party disputes the independent valuer s determination. Following consultation with the independent valuer and both parties, the Director-General shall determine a fair and reasonable acquisition price for the land, having regard to the matters referred to in paragraphs (a)-(c) above, the independent valuer s report and the detailed report of the party that disputes the independent valuer s determination and any other relevant matters. 21

Within 14 days of the Director-General s determination, the Applicant shall make a binding written offer to the landowner to purchase the land at a price not less than the Director-General s determination. If the landowner refuses to accept the Applicant s binding written offer under this condition within 6 months of the offer being made, then the Applicant's obligations to acquire the land shall cease, unless the Director-General determines otherwise. 10. The Applicant shall pay all reasonable costs associated with the land acquisition process described in condition 6 above. 11. If the Applicant and landowner agree that only part of the land shall be acquired, then the Applicant shall pay all reasonable costs associated with obtaining Council approval for any plan of subdivision (where permissible), and registration of the plan at the Office of the Registrar-General. 22

SCHEDULE 6 ENVIRONMENTAL MANAGEMENT, MONITORING, AUDITING & REPORTING ENVIRONMENTAL MANAGEMENT STRATEGY 1. Within 12 months of the date of this consent, the Applicant shall prepare and implement an Environmental Management Strategy for the development to the satisfaction of the Director-General. This strategy must: (a) provide the strategic context for environmental management of the development; (b) identify the statutory requirements that apply to the development; (c) describe in general how the environmental performance of the development would be monitored and managed during the development; (d) describe the procedures that would be implemented to: keep the local community and relevant agencies informed about the operation and environmental performance of the development; receive, handle, respond to, and record complaints; resolve any disputes that may arise during the course of the development; respond to any non-compliance; manage cumulative impacts; and respond to emergencies; and (e) describe the role, responsibility, authority, and accountability of all the key personnel involved in environmental management of the development. 2. Within 14 days of the Director-General s approval, the Applicant shall: (a) send copies of the approved strategy to the relevant agencies, Council, and the CCC; and (b) ensure the approved strategy is publicly available during the development. ENVIRONMENTAL MONITORING PROGRAM 3. Within 12 months of the date of this consent, the Applicant shall prepare an Environmental Monitoring Program for the development in consultation with the relevant agencies, and to the satisfaction of the Director-General. This program must consolidate the various monitoring requirements in schedule 4 of this consent into a single document. 4. The Applicant shall regularly review, and if necessary update, this program in consultation with the Director-General. ANNUAL REPORTING 5. The Applicant shall submit an AEMR to the Director-General and the relevant agencies. This report must: (a) identify the standards and performance measures that apply to the development; (b) include a summary of the complaints received during the past year, and compare this to the complaints received in the previous 5 years; (c) include a summary of the monitoring results on the development during the past year, (d) include an analysis of these monitoring results against the relevant: impact assessment criteria; monitoring results from previous years; and predictions in the EIS; (e) identify any trends in the monitoring over the life of the development; (f) identify any non-compliance during the previous year; and (g) describe what actions were, or are being, taken to ensure compliance. INDEPENDENT ENVIRONMENTAL AUDIT 6. Within two years of this approval, and every three years thereafter, unless the Director-General directs otherwise, the Applicant shall commission and pay the full cost of an Independent Environmental Audit of the development. This audit must: (a) be conducted by suitably qualified, experienced and independent team of experts whose appointment has been endorsed by the Director-General; (b) include consultation with the relevant agencies; (c) assess the environmental performance of the development and whether it is complying with the relevant requirements in this approval and any relevant mining lease or EPL (including any strategy, plan or program required under these approvals); (d) review the adequacy of the strategies, plans or programs required under these approvals; and, if appropriate, (e) recommend measures or actions to improve the environmental performance of the development, and/or any strategy/plan/program required under these approvals. 23

Note: This audit team must include experts in the field of subsidence and groundwater management. 7. Within six weeks of completing this audit, or as otherwise agreed by the Director-General, the Applicant shall submit a copy of the audit report to the Director-General, with its response to any recommendations contained in the audit report. 7A. Within three months of submitting the audit report to the Director-General, the Applicant shall review, and if necessary revise the strategies/plans/programs required under this approval, to the satisfaction of the Director-General. COMMUNITY CONSULTATIVE COMMITTEE 8. The Applicant shall ensure that there is a Community Consultative Committee to oversee the environmental performance of the development. This committee shall: (a) be comprised of: 2 representatives from the Applicant, including the person responsible for environmental management at the mine; 1 representative from Council; and at least 3 representatives from the local community, whose appointment has been approved by the Director-General in consultation with the Council; (b) be chaired by the representative from Council; (c) meet at least twice a year; and (d) review and provide advice on the environmental performance of the development, including any construction or environmental management plans, monitoring results, audit reports, or complaints. 9. The Applicant shall, at its own expense: (a) ensure that 2 of its representatives attend the Committee s meetings; (b) provide the Committee with regular information on the environmental performance and management of the development; (c) provide meeting facilities for the Committee; (d) arrange site inspections for the Committee, if necessary; (e) take minutes of the Committee s meetings; (f) make these minutes available to the public for inspection within 14 days of the Committee meeting, or as agreed to by the Committee; (g) respond to any advice or recommendations the Committee may have in relation to the environmental management or performance of the development; (h) forward a copy of the minutes of each Committee meeting, and any responses to the Committee s recommendations to the Director-General within a month of acceptance of the minutes by the Committee. 10. Within three months of approval of MOD 19-3-2007, and thereafter for the life of the development, the Applicant shall: (a) place a copy of any plan/strategy/program required under this approval (or any subsequent revision of these plans/strategies/programs), or the completion of the audits or AEMRs required under this approval, on the Applicant s website; and (b) provide a copy of each document to the agencies relevant to the matters addressed therein. 11. Within three months of approval of MOD 19-3-2007, and thereafter for the life of the development, the Applicant shall: (a) make a summary of monitoring results required under this approval publicly available on its website; and (b) update these results on a regular basis (at least every three months after the establishment of the website). INCIDENT REPORTING 12. Within 24 hours of detecting an exceedance of the limits/performance criteria in this consent, or detecting an incident that causes (or may cause) material harm to the environment, the Applicant shall notify the Department and other relevant agencies of the exceedance/incident. 13. Within 6 days of notifying the Department and other relevant agencies of an exceedance/incident, the Applicant shall provide the department and these agencies with a written report that: (a) describes the date, time and nature of the exceedance/incident; (b) identifies the cause (or likely cause) of the exceedance/incident; (c) describes what action has been taken to date; and (d) describes the proposed measures to address the exceedance/incident. 24

APPENDIX 1 SCHEDULE OF LAND Local Government Area: Counties: Parishes Singleton Shire Northumberland and Hunter Wollombi, Vere, Whybrow, Milbrodale and Broke DP Lot DP Lot Road 14916 174788 A Road 1033019 174788 B part Moffat Street 205613 1 part Ellis Street 205613 2 part Blaxland Street 205613 3 part Adair Street 244826 10 Cobcroft Road 244826 11 part Charlton Road 247398 1 part Fordwich Road 247398 2 part Broke Road (MR 181) 247398 3 Part Butlers Lane 247398 4 closed road between Lot 72 & 73 DP 755270 247398 5 various unnamed crown roads 247398 6 3475md ms 247398 7 10022 4 247398 8 10022 5 247398 9 10022 6 247398 10 10022 7 247398 11 10022 8 247398 12 10022 9 247398 13 10022 10 247398 14 606531 112 247398 15 10022 15 247398 16 10022 16 247398 17 10022 17 247398 18 10022 18 247398 19 62544 1 248448 4 62544 2 248448 5 102103 1 248448 6 102103 2 248448 7 133135 1 248448 8 133135 2 260663 274 133135 3 263943 20 133168 1 435160 1 133168 2 445449 1 133168 3 45581 1 171648 1 47305 1 545559 191 755264 29 545559 192 755264 30 561424 3 755264 31 561424 4 755264 33 561424 5 755264 34 561424 6 755264 35 563668 1 755264 36 564480 1 755264 43 25

DP Lot DP Lot 587986 5 755264 44 599574 4 755264 51 612261 851 755264 52 612261 852 755264 53 615819 4 755264 54 634708 1 755264 56 657988 1 755264 61 662301 1 755264 80 703892 32 755264 81 704474 7 755264 82 705699 11 755264 83 705699 12 755264 85 705699 13 755264 86 723292 1 755264 98 729923 1 755264 103 729952 126 755264 105 745971 1 755264 109 749857 709 755264 111 755264 22 755264 113 755264 23 755264 125 755264 24 755270 37 755264 25 755270 38 755264 26 755270 39 755264 27 755270 40 755264 28 755270 41 755270 43 758164 3/33 755270 44 758164 4/33 755270 45 758164 5/33 755270 46 758164 6/33 755270 48 758164 7/33 755270 49 758164 8/33 755270 50 758164 3/50 755270 51 758164 1/51 755270 52 758164 2/51 755270 57 758164 3/51 755270 59 758164 4/51 755270 60 784032 1 755270 62 800688 30 755270 68 800688 31 755270 69 811613 20 755270 72 811613 21 755270 73 816636 24 755270 74 821150 1 755270 75 822165 1 755270 76 852571 26a 755270 77 852571 26 755270 78 852571 27 755270 79 861535 1 755270 120 861535 2 755270 121 861535 3 26

DP Lot DP Lot 755270 122 861535 4 755270 123 861535 5 755270 125 822165 1 758164 6/21 877447 21 758164 7/21 966407 1 758164 8/21 986831 1 758164 1/33 986831 2 758164 2/33 1007798 3 1007798 4 1015814 1243 1007798 5 1015814 1244 1007798 6 1033019 100 1015814 1241 1033019 101 1015814 1242 27

APPENDIX 2 RECEIVER LOCATION PLANS* 28

* As identified in the Environmental Assessment dated 15 February 2010 and referenced in the development consent for Bulga Open Cut Coal Mine (DA 41-03-99). 29

APPENDIX 3 INDEPENDENT DISPUTE RESOLUTION PROCESS Independent Dispute Resolution Process (Indicative only) Matter referred to Independent Dispute Facilitator appointed by DIPNR in consultation with Council Independent Facilitator meets with parties concerned to discuss dispute Dispute resolved Dispute not resolved Facilitator consults relevant independent experts for advice on technical issues Facilitator meets with relevant parties and experts Dispute resolved Dispute not resolved Facilitator consults DIPNR and final decision made Agreed Outcome 30

Report Audit Photographs

Report Photo 1: Photo illustrating prepared rehabilitation area and well managed condition of main haul road. Photo 2: Truck and shovel operation illustrating well watered haul roads in opencut. Photo 3: Dragline operation with minimal dust generation, blast drilling in foreground. Photo 4: On site camera monitor in BSO environmental management office. Photo 5: Regular watertruck use. Photo 6: Minimal dust generated from truck operations. Page 1

Report Photo 7: Rehabilitation area flume structure with jute lining and rip rap discharge structures. Photo 8: Rehabilitation area following compost application and seeding. Photo 9: Area Station Fuel Farm. Photo 10: Area Station Fuel Farm new bunding. Photo 11: Area Station Fuel Farm new spill containment equipment and signage. Photo 12: Area Station Fuel Farm new oil water separation system. Page 2

Report Photo 13: Old Tailings Dam illustrating the beaching of tailings via risers. Photo 14: Igloo structures at Area Station Workshop. Photo 15: Additional level metering on tailings line dams. Photo 16: CHPP Surge Dam. Photo 17: 3 Hectares of Forest Red Gum Woodland. Photo 18: Improved signage on water management facilities. Page 3

Report Photo 19: Dust suppression water sprays on product stockpile filling. Photo 20: Igloo Structures at Main Workshop. Photo 21: Oil water separation sump at XRail refuelling facility. Photo 22: Oil water separation equipment at XRail refuelling facility. Page 4