APPENDIX 2 - UNDERGROUND MINING INDUSTRY PROFILE

New Zealand

Underground mining is a very small sector. There are seven operating underground mines - five coal mines, and two metalliferous (gold/silver) mines, employing around 300-350 employees. There are applications in train for some smaller underground coal mines, and there are a number of inactive coal mines (i.e. with permits, but not operating). In around the last six years there has been a dramatic reduction in the number of small underground coal operators.

Coal mining is centred in Huntly and the West Coast. It is dominated by the state-owned operator, Solid Energy. Solid Energy operates the Huntly East, Spring Creek and Terrace mines. Another large operator, Pike River Coal, has recently commenced operations on the West Coast.

There are several smaller mines. A smaller operator, Roa Mining, operates the Roa mine, with 33 workers. Black Reef Mine Ltd is still under a prohibition notice, Wellman is a 1-person development some way from production, and the department has recently received notice of a 2-person operation looking to start up around Greymouth.

Metalliferous mining is centred in Waihi and Otago, with two large operators: Newmont Waihi Gold (Favona underground mine), and Oceana Gold Limited (Fraser underground mine).

Under the Crown Minerals Act 1991, Crown Minerals receives plans of underground workings and/or annual summary reports detailing mining activities undertaken. They also carry out regular site visits to mines, maintain databases of all mines and quarries, and are establishing a GIS database of underground mine workings for resource management purposes.

Before numbers reduced, small operators made up the bulk of operators, and produced only around 10% of the coal and gold.

Production is growing in underground mining. 2006 was a record year for coal production, producing 5.767 million tonnes, half a million tones more than in 2005. Gold production increased slightly from 2005, to 10,618kg. The total value of industrial mineral production in 2006 was $558m, a 14.3% increase from 2005. Underground mining produces only a portion of this revenue (for coal this is around 14%).

Australia

Australia has a large mining industry, including underground coal mining - in size and as a proportion of the national economy. It provides our most important reference point for safety and health information and systems.

There is a significant flow of personnel between New Zealand and Australia, predominantly to Australia. There is also a flow of capital, as a number of large operators in New Zealand are Australian or international companies.

Workplace health and safety laws for mining are applied at a State level, and the states have adopted variations of a performance based model. A summary of the New South Wales (NSW), Queensland and Victorian frameworks was provided in the discussion paper.

NSW has a more prescriptive framework. It requires a comprehensive health and safety management system with specified components, including: systems (such as an inspection programme), and major hazard management plans, notification of high-risk activities, and licensing for certain activities.

Queensland requires a health and safety management system, which is similar to New Zealand's HSE Act system. An underground mine is required to have a principal hazard management plan, which covers at least some listed items. This is supported by very comprehensive regulations.

Victorian regulations require a safety management system to be documented, and sets out the content. It requires a safety assessment for major hazards, including methodology, nature, likelihood, severity of potential harm, and reasons for adopting/rejecting controls. This is similar to the HSE Act hazard identification, but sets it out greater detail.

The Australian experiences are useful for the review of the New Zealand regulatory framework, but the different systems mean it is not possible to "harmonise" with Australia. A Federal project is currently underway in Australia to review the scope for harmonising state health and safety laws, including mining. Australia also has extensive best-practice technical standards and guidance material, that New Zealand can and does drawn on heavily.

Mining fatalities in 2006

Two fatalities in 2006 were the impetus for the review of the underground mining framework. These occurred in smaller mines:

• Tiller mine, operated by Black Reef Mine Ltd - on 8 March 2006, Mr Robert James McGowan, died of impact/crush injuries to his neck, chest, spine and limbs following an inundation of water. This was a small mine, worked by only two-three people. The department took prosecutions against: the operator, the mine manager, and another whose details are suppressed. This matter was sub judice during the review, but the Court has made findings and sentencing decisions - although there are appeals. More information is now in the public domain and may inform this review.
• Roa mine, operated by Roa Mining Company Ltd (who is one of the submitters on the discussion paper; and it appears that one of the worker submitters was a survivor of this incident) - on 8 September 2006, Mr Bernard Green was crushed by a sudden roof fall. This is a larger mine, operated by the Roa Mining Company Ltd, which employs around 33 staff. There was no prosecution.

These two incidents illustrated potential issues for smaller mines, especially the Black Reef case. In the Black Reef case, the Court's findings highlighted some key safety issues: the value of a health and safety system from the outset, the importance of accurate mine plans and plans of old workings; potentially a particular need for mines to use external experts; and technical issues around the risk of inundation - drilling ahead, and practice regarding safety margins and barriers with old workings. The Roa Mine case highlighted the value of having a safety system. The investigation noted the absence of supporting technical guidance for underground mining.

Mining injury information

There are no statistics specifically for underground mining, but there is injury data for the mining industry as a whole. The mining injury and fatality incidence rate, at 0.9 per 1,000 full-time equivalent (FTE) employees has remained relatively stable over the last 10 to 15 years (both in New Zealand and Australia), with metalliferous mining trending gradually down, and coal mining staying relatively constant.

Of all industry groups, mining consistently had the highest incidence of injury claims from 2002 to 2005, and was second highest in 2006, with 165 claims per 1,000 FTEs compared to the general incidence rate of 126. It also has a high incidence of "entitlement" claims (i.e. claims for weekly compensation for time off work) at 25 compared to 17 for all industries (this rate is exceeded by, but reasonably close to, rates for other high hazard industries - agriculture, manufacturing, transport and construction). Mining has a similar injury claims profile to other industries in terms of the nature of claims.

Injury claims are not a good measure for high hazard industries, as they do not take account of the potential for catastrophic incidents and loss of life (low probability, high consequence incidents). A visiting Australian professor (and expert in high hazard industry occupational safety and health), Andrew Hopkins from the Australian National University, confirmed this, saying that if employers focus on addressing injury claims, they reduce slips, trips and falls, they become "systematically complacent" about the major hazards.

Since its origins in the mid 1800s, underground coal mining has been categorised by major incidents. Looking at multiple fatality incidents in the period 1850 to 1998, there have been 204 fatalities (19% of a 1,096 total mining industry fatalities).

On average these occurred every 13 years, and it has now been 16 years since the HSE Act, and 10 years since the last multiple fatality incident. It is useful to remember that multiple fatalities may only occur many years apart.

In the last 50 years, there were fewer fatalities per multiple fatality incident, suggesting major improvements to safety practices:

Date	Fatalities	Mine	Yrs between fatalities
1958	4	Westhaven	3
1967	19	Strongman	9
1985	4	Boatmans	18
1998	3	Mt Davy	13

There are also high numbers of single fatalities. A 1995 seminar paper, A summary of the evolution of coal mining safety legislation, together with a traditional viewpoint (by WP Brazil, of the Francis Mining Company for the Coal Producers Federation of New Zealand Inc) noted the high number of miners who "met a solitary death". Looking at total fatalities, there has been a marked drop in mining industry fatalities in latter years - a 41% drop in the 10 years before and after the HSE Act came into force. The following table shows how total mining fatalities have reduced by 80% in the last 50 years:

Period	Fatalities
1957-1966	85
1967-1976	95 (includes 19 multiple fatalities, Strongman mine)
1977-1986	58
1987-1996	31
1997-2006	17

There are clear themes to causes of multiple fatality incidents - most involve explosions, caused by ignited mine gasses. In early cases there was a greater danger where lighting was from naked flames, and a number of explosions were caused by cigarettes, and these things have changed with time. Even today, using explosives and shot firing still have regulatory requirements under the existing framework. Other causes of multiple fatalities are: flooding from old mine workings, inadequate ventilation, and collapse (and the Tiller and Roa mine fatalities in 2006 involved collapse and flooding). All the causes of multiple fatality incidents are well-known major hazards.

Historically, multiple mine fatalities led to reviews of safety practices, and usually some regulatory change.

Background on safety case regimes

• A safety case regime is emerging within performance-based legislative frameworks as best practice for regulating large, high risk/low probability industries that involve public safety risk (such as oil and gas exploration, nuclear, and it has been recommended for mining in Australia) ^[3]. Safety case models (or similar) apply in New Zealand for the rail, civil aviation and maritime sectors. The difference between a safety case option and requiring a documented safety system is the need for the regulator to approve the safety case before operations commence. It is generally recognised that a governmental commitment to resourcing the regulator is essential, and without this safety case regimes do not work effectively.

Background on check inspectors

Check inspectors were described slightly differently by submitters, but the basic concept is an elected experienced, qualified and trained miner who would have all or some of the following roles:

• to immediately order the withdrawal of employees from the mine or part of the mine believed to be dangerous to life or injurious to health (as determined by the inspector), or order immediate discontinuance of any dangerous practice, or order evacuation of the mine in emergency situations
• to inspect the mine every two weeks or a miner's request regarding a dangerous condition or practice, and report in writing to the mine manager
• to support health and safety representatives and committees in the development of safety cases and make recommendations to the department regarding granting/withdrawing any high risk activity license.

This is very similar to the workmen's (or "check") inspector provided in s173 of the former Coal Mines Act, which was the pre-HSE Act form of employee participation in underground mining. Workmen's inspectors were appointed by workers at their own cost, and had experience and qualification requirements. They had the power to inspect mines, but could not order workers to withdraw from the mine/part of the mine or cease any dangerous practice. They could request the manager to withdraw miners, or remedy/discontinue any dangerous practice (s188). If the manager did not act on this request, the check inspector could make the same request to a mines inspector.

Employee participation requirements in the HSE Act as enacted were high level, and did not include any sector-specific arrangements. The EPMU requested inclusion of check inspectors during the 1998 consultation on the Mining Underground Regulations, but they were not included.

The HSE Act provisions for employee participation were expanded in 2002. The general duty to provide reasonable opportunities for employee participation applies to everyone. The provisions requiring an employee participation system apply automatically to organisations with 30 or more employees, and to smaller organisations if any employee requests employee participation. Parties may make their own arrangements, or there is a default mechanism (of health and safety representatives/committees) if this is not agreed. The provisions are flexible, and could allow an agreed sector-specific arrangement. The 2002 amendments also allow trained health and safety representatives to issue hazard notices (which may be notified to an inspector), and to advise an employee, in the context of employee's ability to refuse unsafe work, if any work they are required to perform is likely to cause serious harm.

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