Mining company South32 after admitting to draining drinking water in NSW.

Illawarra Coal Holdings Pty Ltd, a subsidiary of South32, has agreed to pay a record sum following an investigation that uncovered unauthorised water drainage from one of its coal mines in the Sydney water catchment area. 

The probe conducted by the Natural Resources Access Regulator (NRAR) revealed that the Dendrobium mine at Mount Kembla, operated by Illawarra Coal Holdings, drained approximately five megalitres of water per day over a five-year period.

The NRAR found that the surface water lost could have been used to meet Sydney's drinking water needs. 

As a result, South32 has agreed to pay nearly $2.9 million as part of an enforceable undertaking aimed at improving local waterways within the Sydney water catchment.

This penalty sets a new record, as the highest sum previously obtained by the NRAR was approximately $360,000. 

Grant Barnes, NRAR's chief regulatory officer, notes that the water loss occurred in an ecologically sensitive area within Sydney's drinking water catchment.

In addition to the financial penalty, South32 has committed to paying $70,000 to cover the costs of the investigation, legal proceedings, and monitoring. 

The enforceable undertaking also requires the company to invest in new technologies for surface water management and provide annual monitoring reports. 

The incident highlights ongoing concerns about the environmental impact of mining operations in the catchment area. 

WaterNSW, responsible for managing the state's waterways, previously expressed worries about the Dendrobium operation's environmental impacts exceeding predictions. 

The introduction of new rules allows mine operators to obtain licences for incidental surface water losses caused by their activities.

Georgina Woods from Lock the Gate, a research and advocacy group, has criticised these rules, claiming they legalise what was previously illegal water extraction by the Dendrobium mine. 

South32 says it is cooperating with the NRAR and is committed to upholding the enforceable undertaking. 

The company plans to collaborate with the NRAR and other stakeholders to develop a community project related to water in the coming months. 

South32 has also expressed support for the surface water licensing regime introduced by the NSW government earlier this year.