BACKGROUND

The Latrobe Valley and Morwell

A brief background of the Latrobe Valley, Morwell and the Hazelwood mine is outlined below to provide the reader with a broader context for the event that is the subject of this Inquiry.

The Latrobe Valley is home to over 70,000 people and is one of four regional cities in Victoria.

The Latrobe Valley has a long history of Indigenous settlement. Due to both the picturesque and productive nature of the land, European exploration and settlement began from the 1830s onwards, mainly for farming and agricultural purposes. Farming and agriculture is still very much a part of the Latrobe Valley today. Since the late nineteenth century the significant brown coal reserves located in the Latrobe Valley have been mined.

The Latrobe Valley coal reserves are unique and are characterised by a relatively thin layer of soil and clay (called ‘overburden’) covering massive coal seams that are on average 100 metres thick. This makes accessing the vast brown coal reserves in the Latrobe Valley relatively easy compared with elsewhere in the world, where there is the opposite ratio of coal to overburden.5

The 1920s saw an influx of migrants settling in the Latrobe Valley, many of whom had fought in World War I and came to the region to take up work in the Old Brown Coal Mine (Latrobe City Council, 2010, p. 7). Prior to World War II, Morwell and other towns in the Latrobe Valley remained predominantly agricultural in nature, with Morwell first established as a railway town as far back as the mid-nineteenth century.

The town of Morwell and its history are closely linked to coal mining. This is obvious today by the physical proximity of the town to the Hazelwood mine and power station. It is important to recognise that although coal mining has played a large role in the history of the Valley, it does not define the town or the people of Morwell. Rather, the development and expansion of coal mining in the area over time has had a direct impact on the people of Morwell due to the town overlaying a significant coal deposit. In the context of the Hazelwood mine and power station being built to the south of Morwell, the town has expanded to the east and to the north. Despite such expansion away from the mine, the southern perimeter of Morwell is still remarkably close to the mine site.

In more recent times, mining in the Latrobe Valley has increased, transforming the landscape from mostly agricultural to industrial. There are now three open cut coal mines in the Latrobe Valley: Yallourn, Loy Yang and Hazelwood. Today the Hazelwood Mine provides approximately 25 per cent of Victoria’s baseline electricity supply (Vines, 2008, p. 26).6 This has created a dramatic contrast in the current landscape, with industrial areas meeting open green plains, as well as townships and people.

The Latrobe Valley community is less prosperous and less healthy overall than the rest of Victoria, even though it contributes significantly to Victoria’s economic wealth. Median household incomes are significantly lower than the Victorian average, and there is a much higher proportion of low income households in the Latrobe Valley than in Victoria at large.

Morwell has an ageing population and the percentage of people living there who need assistance due to a disability is twice the rate for the rest of Victoria. Health outcomes are markedly worse in the Latrobe Valley. The community of the Latrobe Valley has been particularly hard hit by asbestos related disease. There would be few long-term residents who do not know someone who has suffered or died from a lung disease caused by inhalation, decades earlier, of asbestos dust.7

The Latrobe Valley is also a proud, strong and resilient community. Morwell has had a strong sense of community throughout its history. In the very early stages of the town’s establishment, places central to the community’s life and activity, such as schools, churches and a town hall, were built. These amenities are symbolic of the emphasis the community placed (and continues to place) on people and families.

The Latrobe Valley and Morwell have a vibrant well-established community network and a large cohort of volunteers. These aspects of the community were on display this year during the mine fire. They continue to be on display as the community, local business and local government work to clean up and recover from the fire’s effects.

The Latrobe Valley, like much of Victoria and many parts of Australia, has been greatly affected by bushfire. The town of Morwell suffered damaging fires in 1890 and then again in 1912, prompting the creation of the first reticulated supply of water for the town in 1913 (Latrobe City Council, 2010, p. 15). There are fires in the area every summer. Sometimes these fires are catastrophic. Five years ago, on Black Saturday, the Churchill fire claimed 11 lives, injured 35 others and destroyed 145 houses. At one stage the fire threatened the Loy Yang open cut coal mine. On the same day, fires were also burning at Delburn and Bunyip, not far away (Teague, McLeod & Pascoe, 2010, Vol 1, pp. 39-68 & 127-142).

It is not uncommon for there to be multiple significant fires burning in the region at the same time. This was certainly the case on 9 February 2014 when the entire State was facing the most extreme weather conditions of that bushfire season and the worst conditions since Black Saturday (which occurred almost five years to the day on 7 February 2009).

The Hazelwood mine

Coal deposits at Morwell were discovered in the late nineteenth century by the Great Morwell Coal Mining Company, which was established in October 1888 (Vines, 2008, p. 26). The Hazelwood mine site was transferred to the State Electricity Commission of Victoria (SECV) on 1 April 1924 (Vines, 2008, p. 48).

Demand for electricity post World War II meant that the SECV had to expand and increase its operations beyond the Yallourn mine. In 1949, the SECV established the Hazelwood mine, then known as the Morwell Open Cut, in order to supply brown coal to the adjoining briquette works, now part of the Energy Brix Power Station. Mining operations initially commenced in 1955 in what is now known as the east field, bounded at the north by the northern batters.8

The Hazelwood mine was further developed from the late 1950s. Between 1964 and 1971, the Hazelwood Power Station was built and demand for coal from the Hazelwood mine increased dramatically (Latrobe City Council, 2010, p. 30). The Hazelwood pondage was constructed in the early 1970s to establish a supply of cooling water for the Hazelwood Power Station (Latrobe City Council, 2010, p. 16). Mining of the east field continued until about 1980.9 The Hazelwood mine then expanded to the south-west, then to the south-east and then west again, where the operational area of the mine is now situated.10 Under the current proposed mining schedule, mining at the Hazelwood mine will continue to the west and then to the north before the anticipated closure of the mine in 2031.11

In the early to mid-1990s, the Victorian Government privatised the SECV, and its power stations were sold separately to overseas interests. The privatisation of the Hazelwood mine was part of this process.

The Hazelwood mine, including the land on which it operates, is owned by the Hazelwood Power Partnership. Since 7 June 2013, the four partners have been subsidiaries of International Power (Australia) Holdings Pty Ltd. This company is in turn jointly owned by subsidiaries of GDF Suez S.A. (72 per cent ownership) and Mitsui & Co Ltd (28 per cent ownership). GDF Suez S.A. is a global energy company with corporate headquarters in France. Mitsui & Co Ltd is a global trading company with corporate headquarters in Japan.12

The Hazelwood Power Corporation Ltd holds mining licence MIN 5004 and operates the mine. Personnel working at the mine are employed by Hazelwood Power Corporation Ltd. This corporation is also owned by the Hazelwood Power Partnership and thus jointly through subsidiaries by GDF Suez S.A. and Mitsui & Co Ltd.13 In this report, ‘GDF Suez’ refers to the mine owner, operator and licensee of the Hazelwood mine and includes the Hazelwood Power Partnership.

February 2014 is not the first time a fire has occurred in a mine in the Latrobe Valley, nor the first time a fire has occurred at the Hazelwood mine. The first known fire in an open cut mine in the Latrobe Valley was in 1896. Further open cut mine fires occurred at the Hazelwood site, most notably in 1977, 2006 and 2008. The mine fire of 1944 at Yallourn which resulted in the Stretton Royal Commission is also well known. Other fires at the Hazelwood mine are discussed in further chapters of this report.