Ambre Energy IAS 15 Feb 08

Felton Hybrid Energy Project
Initial Advice Statement
15 February 2008
Table of Contents
1 Introduction .............................................................................................................................................. 3
1.1 Project Overview .................................................................................................................................. 3
1.2 The Proponent ....................................................................................................................................... 3
1.3 Outline of Proposal ............................................................................................................................... 4
1.4 Purpose and Scope of Initial Advice Statement .................................................................................... 5
2 Description of the Project ....................................................................................................................... 7
2.1 Project Location .................................................................................................................................... 7
2.2 Background to the Project ..................................................................................................................... 7
2.3 Project Justification and Alternatives.................................................................................................... 9
2.4 Project Components ............................................................................................................................ 10
2.5 Felton North Coal Mine ...................................................................................................................... 10
2.6 Coal Preparation.................................................................................................................................. 14
2.7 Processing of Coal using the Hybrid Energy System.......................................................................... 15
2.8 Resources required .............................................................................................................................. 17
2.9 Timeframe for Project ......................................................................................................................... 18
3 Project Benefits and Costs .................................................................................................................. 19
3.1 Project Benefits ................................................................................................................................... 19
3.2 Estimated Project Costs ...................................................................................................................... 19
4 Existing Environment ............................................................................................................................ 20
4.1 Climate ................................................................................................................................................ 20
4.2 Topography ......................................................................................................................................... 20
4.3 Soils and Land Use Suitability ............................................................................................................ 20
4.4 Remnant vegetation............................................................................................................................. 21
4.5 Surface water ...................................................................................................................................... 22
4.6 Ground water ...................................................................................................................................... 22
4.7 Air Quality .......................................................................................................................................... 22
4.8 Noise and Vibration ............................................................................................................................ 22
4.9 Existing ecosystems ............................................................................................................................ 22
5 Measures to Control Potential Environmental Impacts ................................................................... 25
5.1 Air ....................................................................................................................................................... 25
5.2 CO2 Emissions .................................................................................................................................... 25
5.3 Ground Water...................................................................................................................................... 26
5.4 Surface water ...................................................................................................................................... 26
5.5 Water Conservation............................................................................................................................. 27
5.6 Water Quality ...................................................................................................................................... 27
5.7 Hydrology ........................................................................................................................................... 28
5.8 Land Management............................................................................................................................... 28
5.9 Transport ............................................................................................................................................. 30
5.10 Flora and Fauna................................................................................................................................... 31
5.11 Native Title and Cultural Heritage ...................................................................................................... 31
5.12 Visual Amenity ................................................................................................................................... 31
5.13 Environmental Management ............................................................................................................... 32
5.14 Hazards and Risks ............................................................................................................................... 32
6 Stakeholder Consultation ..................................................................................................................... 33
Ambre Energy Limited
ACN 114 812 074
Level 6 Grant Thornton House Tel: +61 (0)7 3009 9180

102 Adelaide Street Fax: +61 (0)7 3009 9181
Brisbane QLD 4000
Australia
Ambre Energy Limited 2

Initial Advice Statement – Felton Hybrid Energy Project
1 Introduction
1.1 Project Overview
Ambre Energy Limited is proposing to build and operate a world-class petrochemical plant
producing synthetic crude oil and dimethyl ether 1 from coal, and co-generating electricity using an
Integrated Gas Combined Cycle (IGCC) system. The project will be designed to be ready for CO2
capture and storage. The project is known as the Felton Hybrid Energy Project and is located near
Felton, 30km south west of Toowoomba; see Figure 1.1.
Felton Hybrid Energy Project
Figure 1.1 - Felton Hybrid Energy Project location
1.2 The Proponent
The Project will be undertaken by a wholly owned subsidiary of Ambre Energy Limited, an unlisted
Australian public company based in Brisbane.
Ambre Energy Limited was formed in June 2005 for the purpose of developing and
commercializing new technologies for the more effective use of coal as a source of energy, and to
1
Dimethyl ether or DME is a simple non-toxic ether (chemical formula CH3OCH3) that is attracting world wide attention
as a potential clean diesel replacement and as a potential fuel for fuel cells.

develop complementary coal mining projects. As of December 2007, it had over 160 shareholders
and had expended over $17 million developing its technologies and projects.
The company has been developing its technologies since its inception, including the evaluation of a
number of potential sites and testing its proprietary Hybrid Energy System on coal, both in large
scale laboratory trials and at its pilot plant facility in Utah, USA. Following this evaluation phase,
the Felton Hybrid Energy Project was selected as the first project to be developed due to low mining
costs, the relatively high reactivity of the coal and the close proximity to infrastructure.
Ambre Energy is committed to creating a project which is sustainable and which meets or exceeds
the expectations of local community and government stakeholders in the areas of environmental,
safety and risk management.
1.3 Outline of Proposal
The Project will be developed in 3 stages:
Stage 1
Stage 1 of the Project will involve the development of two major components. First, a 12 million
tonnes per year (Mtpy) open cut coal mine and coal preparation plant will be developed with a
capacity to produce 6 Mtpy of washed coal. Second, a petrochemical plant will process the washed
coal using Ambre Energy’s Hybrid Energy System (HES) to produce synthetic crude oil.
This Stage 1 of the petrochemical plant will itself be developed in two successive stages. Stage 1A
will involve the construction of a cluster of retorts capable of pyrolysing 2 3 Mtpy of washed coal to
produce 3.6 million barrels per year (10,000 bbl/day) of synthetic crude oil. Synthetic gas (syngas)
will also be produced by the retorts and by subsequent gasification of the spent coal (char)
discharged from the retorts. There is sufficient syngas produced to co-generate all electricity
required for internal consumption (about 30MW) using gas engines. The object is to commission
Stage 1A by the first quarter of 2010.
Stage 1B will double the processing capacity of the HES plant to 6 Mtpy of washed coal, thereby
producing a total of 7.2 million barrels per year (20,000 bbl/day) of synthetic crude oil. A DME
pilot production plant will also be added. The syngas from the retorts and the char gasifiers will first
be fed through the DME pilot plant to produce 100,000 tonnes of DME per year (300 tonnes per
day). Tail gas from the pilot plant will then be used to generate electricity and steam for further
internal energy requirements. Stage 1B is scheduled to be commissioned by the third quarter of
2011.
During Stage 1, Ambre Energy will also investigate, and if viable implement, a land improvement
and commercial forestation program covering the area of its mining leases to offset carbon
emissions from its project and provide valuable soft and hard wood construction timber that might
otherwise be harvested and imported from ecologically vulnerable areas of natural forest in other
parts of the world.
Stage 2
Following the successful commissioning of Stage 1 of the project, a Stage 2 expansion will involve
the construction of:
2
Pyrolysis of coal is the heating of the coal in the absence of oxygen, in this case at relatively low temperatures (less than
600ºC). This process is also described as “retorting” because it is usually carried out in heating vessels of various types,
commonly known as retorts.

¾ a larger char gasification plant capable of gasifying 4 Mtpy of char to provide sufficient
syngas to feed a 2 Mtpy DME Plant; and
¾ a 400 MW IGCC power plant utilising tail gas from the DME Plant.
Stage 3
Stage 3 of the project will involve:
¾ doubling the capacity of the open cut coal mine to 24 Mtpy;
¾ construction of a second 12 Mtpy coal preparation plant;
¾ doubling the production capacity of the petrochemical plant to 14.4 million bbl/yr of
synthetic crude oil, 4 Mtpy of DME and 800 MW of exported power; and
¾ if commercially viable carbon capture and storage (CCS) facilities have been developed,
stripping the CO2 from the syngas produced by the plant and disposing of it in those
facilities. (If CCS facilities are developed at an earlier stage, CO2 stripping and disposal can
commence at that earlier stage.)
1.4 Purpose and Scope of Initial Advice Statement
The purpose of this Initial Advice Statement (IAS) is to provide sufficient information about the
nature and scope of the Project so as to:
• Assist the Queensland Coordinator-General in making a decision on whether to declare the

Project to be a significant project for which an Environmental Impact Statement (EIS) is
required;
• Provide information to and facilitate consultation with governments, key stakeholders,

landowners and the community;
• Allow the determination of the appropriate Environmental Impact Assessment Process and
Development Approval requirements; and
• Assist in the preparation of the draft Terms of Reference for the Project’s EIS.
This IAS addresses the technologies to be used, the potential of the coal resource, and the mining
and processing practices that will be employed to economically enhance the values of the resource
in an environmentally acceptable manner.
Issues that may be considered in determining that the Project warrants being declared a significant
project are:
Complexity of local, State and Federal Government Requirements
The Project will be examined under a variety of local, State and Federal laws and the permitting
process will be complex.
The conversion of coal to gas and hydrocarbons may generate considerable interest from the Federal
as well as the State Government due to its strategic importance and potential environmental impacts.

In addition there will need to be a cooperative decision making process between local and State and
Federal Government Departments.
Potential Environmental Effects
The potential adverse impacts of the Project are:
• Possible disruption of groundwater aquifers in Hodgson Creek alluvials, the Walloon

sandstone and the Tertiary basalts;
• Dust generated from mining processes;
• Odour generated from the processing of the coal;
• Greenhouse gas emissions;
• Social disruption to adjacent farming enterprises;
• Noise generated from mining and processing;
• Increased level of road traffic;
• Visual impact on a rural landscape; and
• Downgrading of agricultural land.
Environmental and Planning Approvals
The Project will need to comply with local, State and Federal legislation. The likely approvals
needed for the Project include those required under the following legislation:
• Federal:
¾ Environment Protection and Biodiversity Conservation Act 1999
• State:
¾ State Development and Public Works Organisation Act 1971
¾ Mineral Resources Act 1989
¾ Environmental Protection Act 1994
¾ Petroleum and Gas (Production and Safety) Act 2004
¾ Coal Mining Safety and Health Act 1999
¾ Integrated Planning Act 1997
¾ Water Act 2000 (for construction of a “Referable Dam”)
¾ Transport Infrastructure Act 1994
¾ Vegetation Management Act 1999
¾ Dangerous Goods Safety Management Act 2001
Potential Effect on Relevant Infrastructure
The Project will impact on local and State Government infrastructure such as roads, water supply
and hydrocarbon transport via pipeline. The potential impacts can be significant and Ambre Energy
is of the opinion that it is important to have the Queensland Coordinator-General’s department as
the lead government agency to coordinate the permitting of the Project.
The EIS for the Project will address these and other possible impacts. Already community
consultation has commenced which has given Ambre Energy an indication of the issues that are of
concern to the local community.

2 Description of the Project
2.1 Project Location
The Project is located at Felton which lies in the Clarence-Moreton Basin in south-east Queensland
to the west of the Great Dividing Range. The basin extends from northern New South Wales
trending northwest to Dalby in Queensland and from Toowoomba in the east to Millmerran in the
west. The Felton North deposit is approximately 30 km south west of Toowoomba and 10 km south
east of Pittsworth, see Figure 2.1.
Figure 2.1 - Felton Hybrid Energy Project location plan
2.2 Background to the Project
The main focus of the Project is the large scale production of a combination of liquids and power
from the proponent’s coal deposits at Felton North.
The development of these coal deposits commenced in October 2006 when a wholly owned
subsidiary of Ambre Energy, Eastern Mining Corporation Pty Ltd (EMC), applied for and was
granted an exploration permit for coal (EPC 1076) over an area of 250 km² in the Felton region. At
the same time, EMC entered into a farm-in agreement with an adjoining EPC holder, Metallica
Minerals Limited, to earn a 75% interest in 180 km² of their exploration permits (EPC 935 and EPC
936). EMC has since acquired 100% ownership of these permits, and has further acquired EPC 1137
and EPC 1138.
During 2007, EMC conducted extensive core drilling programs on the site and identified a potential
deposit of high ash coal (on average 50% ash content) in excess of 900 million tonnes of high
volatile bituminous coal, an ideal source material for coal to liquids projects.

Technologies
The technologies to be used to exploit these deposits include a number of innovative processes such
as Ambre Energy’s proprietary Hybrid Energy System (HES) and a new production process for
dimethyl ether (DME), as well as recognised processes such as those for power generation.
At the heart of the HES is a continuous flow retort capable of pyrolysing coal in large quantities to
produce hydrocarbon liquids aimed at the chemical and transport fuel market. The retorting
technology for low temperature pyrolysis of coal was acquired by Ambre Energy via a joint venture
with U.S. based Oil-Tech, Inc.
This technology allows relatively low cost removal of liquids from the coal feed and also produces a
solid char. The char is still of sufficient quality to produce power and further transport fuels via
gasification.
Ambre Energy has demonstrated the retorting of coal using a pilot test facility in Utah, USA and has
carried out metallurgical test work and processing test work on the coal from the Felton North
deposit. This test work, combined with exploration work and process option studies, has allowed
Ambre Energy to develop a mine plan and processing facility concept that will maximise the
economic returns from the Felton North resource.
The development includes a plant to manufacture DME. DME has attracted much attention around
the world because of the versatility and environmental benefits of this next-generation liquid fuel.
There are a number of large scale DME production plants currently under construction and planned
in the Middle East and China.
Of particular interest is DME’s suitability as a fuel for compression ignition diesel engines,
currently the most efficient engine technology available. Unlike diesel, gasoline or even ethanol,
DME produces almost no particulates upon combustion; in other words, no smoke or soot. It
contains no sulfur and produces very low NOx emissions. Prototype buses and heavy vehicles using
DME have been built in China and Japan, and by Volvo in Europe.
Ambre Energy has claimed a stake in the development of this new clean fuel by funding a project at
the University of Utah to develop a reactor and catalysts for the production of DME from coal (as
well as biomass). The aim is to produce DME more simply and at a lower cost than will be
produced at the plants currently being built in the Middle East and China.
In addition to research into DME production, Ambre Energy has done test work on evaluating the
liquids from the low temperature retort to produce a synthetic crude oil and a pitch product. The
level of processing of the liquids will be tailored to maximise the economic return of the Project and
will include a synthetic crude oil fraction and may contain a pitch fraction and extraction of
chemical values from the liquids.
Exploration
Two drilling programs have successfully been completed over the Felton North deposit area. The
first drilling program was conducted in January 2007 with the second program following in July
2007. The January drilling program consisted of 4 cored boreholes at Millmerran (40km south-west
of Felton North) and 7 cored boreholes within the Felton North deposit area, totalling 795 metres of
HQ core. Figure 2.2 illustrates the typical drilling technology used during exploration at Felton
North.
The second drilling program was focussed solely on further defining the Felton North deposit area,
and involved the completion of 6 chip boreholes and 9 cored boreholes, to produce 360m of core.

Analysis of the two drilling programs indicates a low strip ratio resource with moderate ash, good
volatiles and high hydrogen content. Modified Fischer Assay of the coal indicates high potential
liquid yields from the Felton North coal deposit compared to other coals in Australia. The geology
of the deposit appears to be structurally simple with coal seams dipping gently to the west.
Since the beginning of November 2007, Ambre Energy has undertaken a third major drilling
program to obtain detailed coal washabilty data, coal oxidation line data and other information
required for detailed mine design.
Figure 2.2 - Exploration Drilling at Felton North looking west to Millmerran
2.3 Project Justification and Alternatives
There are a number of important strategic implications of the Project, such as:
• Development of a significant alternative source of crude oil and gas, with the potential to
reduce importation of oil and thereby improve Australia’s balance of trade;
• Development of a relatively low cost coal-to-liquids and coal-to-gas process that can
enhance the economic value of Queensland’s coal deposits, particularly resources which are
currently sub-economic or treated as waste, such as coal washing rejects;
• Maximising economic value from the Felton North coal deposit for the State of Queensland;
• Development of Australia’s first DME production facility and the opportunity for Australia
to play a leading role in the adoption of DME as a next-generation fuel;

• Encouraging the establishment in the Darling Downs region of downstream petrochemical
industries such as the manufacture of olefins and other products that require crude oil as a
feedstock;
• Diversification of the employment opportunities and skill base of people living in regional
Queensland; and
• The potential to exploit the same technology and development concept in other areas within
Australia.
Ambre Energy is continuing to assess alternative projects in the USA in the event that the Felton
Hybrid Energy Project is not able to proceed. In particular there are opportunities to use the HES to
upgrade low quality Gulf Coast lignites as fuel for power stations.
2.4 Project Components
The Project will cover an area of approximately 25 km² of land and will be comprised of a number
of components, as follows:
• Felton North Coal Mine with a production capacity of 24 Mtpy;
• Water pipeline to transport 10 ML/day of waste water up to 80 km from coal seam methane
production operations (located west of the Project site) to the Project site;
• Coal preparation plants capable of washing 24 Mtpy of raw coal to produce 12 Mtpy of
washed coal;
• Clusters of retorts, each capable of retorting 1,000 tonnes per day of washed coal, with a
total retorting capacity of 12 Mtpy;
• Power generating combustion engines utilising retort gas as fuel to produce electricity for
internal needs (60 MW);
• Synthetic crude oil upgrading units capable of upgrading 40,000 barrels per day of synthetic
crude oil;
• Char (spent coal) gasification units capable of gasifying 8 Mtpy of char;
• DME production plant capable of producing 4 Mtpy of DME;
• IGCC power plants capable of producing a total of 800 MW of electricity.
2.5 Felton North Coal Mine
The Resource
A measured, indicated and inferred resource of 900 million tonnes of coal has been identified at the
Felton North deposit. It falls within EPC 935 and comprises Walloon Coal Measures, Marburg
Formation sandstones and ridge capping Tertiary basalt flows. The Walloon Coal Measures consist
of grey siltstones, commonly carbonaceous, and fine to medium grained soft grey lithic sandstones.

Several carbonaceous zones are scattered within these sediments ranging in thickness from tens of
metres to less than a metre. The carbonaceous zones are made up of mudstones (varying in
carbonaceous content), carbonaceous shales, both clean and carbonaceous claystones and various
coal grades. The sediments within these carbonaceous zones merge and coalesce laterally over
relatively short distances.
The underlying Marburg Formation consists principally of cross-bedded medium to coarse quartz
sandstones inter-bedded with grey shale and claystones. The Tertiary basalts were deposited as a
series of flows and exist as capping along remnant ridge lines. Figure 2.3 shows the drill hole
locations of the 2007 exploration programs.
Figure 2.3 - Borehole location Plan
There are 9 seams within the Felton North deposit area, the G, H, T, K, MU, MM, ML, B and BB
seams; see Figure 2.4.
Varying
overburden
G seam 1.9m
8.5m
H seam 0.7m
4.0m
T seam 5.0m
14.5m
K seam 0.7m
4.0m
MU seam 4.7m
MM seam 2.9m
ML seam 4.3m
5.5m
B seam 2.0m
Figure 2.4 - Stratigraphy of the Felton North Deposit.

All 9 seams vary in thickness and quality throughout the deposit. Figure 2.5 illustrates a typical
intersection of M seam.
Figure 2.5 - Typical coal intersection at Felton North.

Core recovered using HQ Diamond wire line technology.
Mine layout and Infrastructure
The Felton North Coal Mine will be a 24 million tonnes per year (Mtpy) open cut mining operation
to be developed in two phases. During Stage 1 of the Project, a mine with a production capacity of
12 Mtpy of run of mine coal will be constructed. Stage 3 of the Project will double the capacity of
the mine to 24 Mtpy. The mine layout and infrastructure are shown on Figure 2.6. With further
design and mine planning the layout may change but the plan basically depicts a realistic impression
of the various operational centres required to extract and process the resource.
The mining operation will be based on the western side of Hodgson Creek where the coal will be
extracted for crushing, washing and transport to the processing plant on the eastern side of Hodgson
Creek. The waste product from the washing, predominantly bentonite clays, will be piped to clay
treatment ponds on the western side of Hodgson Creek for settlement and the recovery of water.
Recycling of water will be a high priority for the Project. Runoff from the stockpile area and
processing plant site will be collected in sediment sumps for recycling to the clay treatment sumps.
The initial clay treatment pond will be constructed on the western side of Hodgson Creek behind a
flood levee, which will protect the mining operation from floods and ensure that runoff from the
mining operations does not enter Hodgson Creek. A similar levee will be constructed on the eastern
side of Hodgson Creek to protect the processing plant infrastructure and also to ensure runoff from

the plant site does not enter Hodgson Creek. For planning purposes and until confirmation is
obtained from hydrological studies of Hodgson Creek, the levees will be set back at least 100m
from Hodgson Creek.
The flood levee on the western side will form the base for the initial overburden dump and the outer
slope will be stabilised with rock mulch and vegetation to provide an erosion resistant cover. This
slope will remain as a permanent feature of the post mining landform while the eastern levee will be
removed during decommissioning of the plant site. Both levees will channel runoff to sediment
sumps for recycling water into the production dams, and smaller sediment sumps will be located at
the base of the outer slopes of the levees to collect runoff during construction of the levees.
The mining operation will commence to the west of the initial clay treatment ponds and progress to
the west.
Figure 2.6 - Open Cut Mine and Infrastructure layout plan
Coal Handling
Coal will be removed by shovel and truck with some selective removal of clay bands greater than
300mm in thickness. The coal and small clay bands will be taken to a central coal preparation plant
for crushing and washing prior to transfer to the processing plant. The larger clay bands will be
transported to the overburden dump located within the open cut mine perimeter.
Tailings
The clay bands liberated from the coal during the washing process will be pumped to the clay
treatment ponds for settling to separate the clays from the water. This will involve stilling the water
in shallow ponds and passing the water through a series of ponds to facilitate the settling process.
Clay Settlement Ponds
When the clay ponds are nearing capacity, further ponds will be developed in the advancing mine
pits. This will involve constructing bunds in the pits to regulate storage and removal of water from
the tailings. The westward advancing overburden dump will progressively cover the ponds that have

been filled with tailings. The consolidation of the tailings at the toe of the dump will force water
from the ponds into the next series of clay ponds.
2.6 Coal Preparation
The run of mine coal is about 50% ash and needs to be washed to less than 30% ash. This is to be
done via 2 coal preparation plants. The first preparation plant will be constructed as part of Stage 1
and will have a capacity to wash 12 Mtpy of run of mine coal to produce 6 Mtpy of washed coal.
Stage 3 will include construction of a second plant of equal capacity.
Waste from the plants will comprise rejects solids and waste water tailings (predominately water
containing fine solids). The tailings will pumped to the clay treatment ponds, where the solids will
settle and the water will be recycled to the coal preparation plants. The reject solids will be stored in
a waste pile and trucked to the mine waste area. The plants will be similar to many other coal
preparation plants in Queensland, using predominantly dense media separation. The coal
preparation plant scheme is shown below in Figure 2.7.
Figure 2.7 – Coal Preparation Plant Scheme

2.7 Processing of Coal using the Hybrid Energy System
The petrochemical plant to process the washed coal will be sited approximately 0.5km to the east of
the main mining area. The plant will be placed in a location that has previously been drilled and
determined to contain no coal.
The plant will be built in 3 stages. The proposed processing configuration maximises the use of the
resource, producing power and a range of liquids that can replace imported crude oil and refined
products. The coal processing scheme is shown below in Figure 2.8 and is described on the
following pages.
Figure 2.8 – Coal Processing Scheme

Drying and Retorting
The washed coal will be dried using a fluidised bed dryer. This unit will use the gas produced by the
downstream retorting and gasification processes as the energy source for the dryer. The dried coal
will then be fed into a cluster of retorts, each capable of processing 1,000 tonnes of coal per day.
The retorts will be Ambre Energy’s patented design comprising a totally enclosed system operating
under negative pressure. The retorts are indirectly heated using electric heating elements in a
flowing bed of coal, and produces a vapour stream and a solid product.
Liquids processing
The vapour from the retort is condensed to produce liquids. The liquids will be further processed to
remove solids and water to produce a synthetic crude oil suitable for the crude oil market. Further
chemical values can be extracted from the liquids if economic conditions support this. The synthetic
crude oil will be sent via pipeline to Brisbane. Stage 1A will include a cluster of retorts with a total
processing capacity of 3 Mtpy of coal to produce 3.6 million barrels per year of synthetic crude oil.
A second cluster of retorts will be built as part of Stage 1B to increase production to 7.2 million
barrels per year. Stage 3 will further increase production to 14.4 million barrels per year.
Gas conditioning and co-generation of power
The gas from the retort will be treated to remove hydrogen sulphide prior to being used as a fuel to
generate electricity for internal use via a gas engine based power station. The retort gas will also be
used as the heat source for drying the incoming coal and to raise steam for process requirements.
The hydrogen sulphide will be absorbed into caustic soda to make sodium hydrogen sulphide, a
product used by base metal mines in Queensland and New South Wales as a flotation reagent.
Consideration will also be given to the future stripping of carbon dioxide from the gas at this point
to take advantage of any viable CCS facilities that emerge.
Gasification including DME production and IGCC power generation
The solids from the retort are of sufficient quality to be gasified in a fluid bed or entrained flow
gasifier system to produce a stream of syngas for DME production and co-generation of power in an
IGCC power station. It is envisaged that Stage 1B of the Project will include a gasifier and a once-
through 300 tonnes per day DME pilot plant. A number of plants have been built using coal to
produce DME in other parts of the world. Ambre Energy is developing an optimised DME reactor
through co-operative research with the University of Utah, which, if successful, will enhance the
existing process technology currently available for DME production.
The tail gas from DME pilot plant will be combined with the retort gas to provide energy for power
and steam requirements within the process plant. Any excess energy will be exported as electricity
to the National Grid.
After successful commissioning of the DME pilot plant, it is envisaged that during Stage 2 a large
scale gasifier will be constructed to provide syngas for a 2 Mtpy DME plant and a 400 MW IGCC
power station. Approximately 75 MW will be used internally and the balance will be exported.
IGCC technology is well proven in similar power stations worldwide. Stage 3 will increase
production to 4 Mtpy of DME and 800 MW of electricity.
Oxygen Plant
An air separation unit will be installed to provide the oxygen required for the gasification process.
This unit will utilise proven technology from a recognised vendor of oxygen plants.

Waste and Emissions Treatment
The tailings from the coal preparation plant will be pumped to the clay treatment ponds. The waste
water from the other processing sections will be treated to a standard to allow addition of this water
to the tailings. Water from the clay treatment ponds will be recycled to the coal preparation plants.
Air emissions will only be generated at 3 points in the process:
• Exhaust from the combustion of gas to dry the washed coal before it is fed into the retorts.
The coal is dried at low temperature – about 250ºC.
• Exhaust from the combustion of syngas in the gas engines generating power for internal
use.
• Exhaust from the IGCC power plants.
2.8 Resources required
Water supply
Project needs for mining and processing are approximately 5,000 ML/yr. It is proposed to build a
water storage dam with a capacity of 10,000 ML.
The water quality required for mining can be waste water from coal seam methane production, run-
off from waste overburden dumps and plant area or recycled town waste water; whereas the
processing plant will require water of reasonable quality for steam generation, which can be
provided by an onsite water treatment plant. Ambre Energy is currently negotiating an agreement
with a large coal seam methane producer to secure supply of 10ML per day (approximately 3,500
ML per year) of waste water from their coal bed methane projects located less than 80 km from
Felton project.
Other potential sources include:
• waste water produced by other coal seam methane producers;
• run off water from waste overburden dumps and the processing plant;
• recycled waste water from towns in the region;
• water entitlements purchased from landholders; and
• other government-controlled sources.
Work force
Stage 1 of Project development will require the following workforce:
• construction - 900 persons for 15 months;
• mining and coal handling - 120 persons ongoing;
• processing plant - 60 persons ongoing; and

• management and technical services - 20 persons ongoing.
Accommodation for construction workers will be provided via a temporary camp. Ongoing workers
have a number of attractive permanent accommodation options in surrounding towns. Where
possible, personnel already living in the region will be invited to apply to fulfil positions available at
the Project.
Transport
Transport requirements are:
• a corridor for conveyor transport of coal across Hodgson Creek and return of solid waste to
the overburden dumps in the mining area;
• road access to transport infrastructure components to site – the existing road corridor is
suitable;
• as the Pittsworth to Felton road traverses the mining area, at some time in the future life of
the Project, this road would require relocation to a mined and rehabilitated section of the
Project area;
• road access to bring workers to site on a continuous roster, requiring transport at night;
• high voltage power transformers, power switch yards and high voltage power lines
connecting the site with the national grid and;
• pipelines for transporting water to site and synthetic crude oil and DME to markets (initially
during commissioning stage, synthetic crude oil and DME might be transported by rail and
road transport).
2.9 Timeframe for Project
Ambre Energy is aiming to obtain all necessary mining leases and approvals for the Project in time
to allow commencement of construction of the Project during the first quarter of 2009. The object is
to commission Stage 1A by the first quarter of 2010. The proposed commissioning timeframe for
subsequent stage is as follows:
Stage 1B Third quarter 2011
Stage 2 First quarter 2013
Stage 3 Third quarter 2014
This timeframe is subject to a number of contingencies, including the timing of governmental

approvals, and access to sufficient capital at the relevant stages.

3 Project Benefits and Costs
3.1 Project Benefits
The Felton Hybrid Energy Project will provide benefits to the local region as well as broader state
and national benefits.
The key benefits include:
• Development of a significant alternative source of crude oil and gas, with the potential to
reduce importation of oil and thereby improve Australia’s balance of trade;
• Development of a relatively low cost coal-to-liquids and coal-to-gas process that can
enhance the economic value of Queensland’s coal deposits, particularly currently sub-
economic resources or waste coal such as coal washing rejects;
• Maximising economic value from the Felton North coal deposit for the State of Queensland;
• Development of Australia’s first DME production facility and the opportunity for Australia
to play a leading role in the adoption of DME as a next-generation fuel;
• Encouraging the establishment in the Darling Downs region of downstream petrochemical

industries such as the manufacture of olefins and other products that require crude oil as a
feedstock;
• Diversification of the employment opportunities and skill base of people living in regional
Queensland; and
• The potential to exploit the same technology and development concept in other areas within
Australia.
Employment Opportunities
Stage 1 of the Project will require the following workforce:
• construction - 900 persons for 15 months;
• mining and coal handling - 120 persons ongoing;
• processing plant - 60 persons ongoing; and
• management and technical services - 20 persons ongoing.
3.2 Estimated Project Costs
Preliminary estimates of capital costs for Stage 1A of the Project are in the order of $783 million.
Ambre Energy plans to own and operate the mine, coal preparation plants and most of the
components of the petrochemical plant. Third parties will be invited to provide and operate the
oxygen plant and power station.

4 Existing Environment
4.1 Climate
The temperature and rainfall statistics for Pittsworth 15km north of Felton East, taken from the
Bureau of Meteorology web site, are listed in the following table:
Statistic J F M A M J J A S O N D An
Temperature 58 years of records 1909-1975

Mean max (0C) 29.9 29.1 27.8 24.7 20.5 17.3 16.5 18.6 22.1 25.6 28.4 29.8 24.2
Mean min (0C) 17.0 16.9 15.4 12.0 8.4 6.1 5.0 5.9 8.7 11.9 14.4 16.1 11.5
Rainfall 120 years of records 1886-2007

Mean (mm) 93.1 76.5 62.4 38.3 40.7 41.2 40.7 30.1 36.6 63.8 75.5 96.3 694.6
Days ≥ 1mm 6.4 5.8 5.5 3.6 3.8 4.2 4.2 3.7 4.1 5.7 6.1 6.8 59.9
Relative humidity 27 years 1938-1975

Mean 9am (%) 65 70 69 66 69 74 70 65 61 57 54 59 65
Table 4.1 – Temperature and Rainfall Statistics for Pittsworth
4.2 Topography
The Project area includes the alluvial plains of Hodgson Creek rising to the low slopes of Walloon
sandstones and finally to the steep slopes of the remnant basalt ridges and plateaus.
The Central Darling Downs Land Management Manual produced by the Department of Natural
Resources and Water has identified the following Land Resources Areas (LRA) in the Project site:
• Older Alluvial Plains: Broad level plains of basaltic alluvium with open grasslands;
• Basaltic Uplands: Undulating rises and rolling low hills rising to steep hills with coolibah
open woodlands; and
• Poplar Box Walloons: Undulating rises and low hills on Walloon sandstone with poplar
box open woodlands.
This manual is restricted to the western side of Hodgson Creek and a soil survey will be conducted
to extend this assessment to the east of Hodgson Creek and to qualify and quantify the soil types of
the total project area to assist in mine and rehabilitation planning.
4.3 Soils and Land Use Suitability
While the soils in the Project area may not have been specifically surveyed, the Land Management
Manual lists the common and associated soils for the various LRAs mapped in the area.
The common soils associated with the LRAs identified in the project area and their land use
suitability are listed in the Table 4.2.

Table 4.2 – Indicative Soils of the Project Area
Land Resource Area Common Soils and Land Use Suitability
Older alluvial plains with Waco soil is deep to very deep (100-180cm) fine, self
black, self mulching cracking mulching, dark cracking clay on basaltic alluvium. This soil
clays. is ideally suited to continual grain cropping with good
nutrition and rotation for weed and disease control.
Basaltic uplands with black Craigmore and Irving soils occur on mid and lower slopes of
to dark brown clay or clay basalt hills and rises. Typically the soils are deep to very
loams on decomposing deep (100-180cm) self mulching brown to brownish black
basalt. Soil depth varies with cracking clays with red brown subsoil on either basalt or
position on the slopes. All basalt colluvium. These soils are ideally suited to continual
the soils are susceptible to grain cropping with good nutrition and rotation for weed and
severe rill and gully erosion. disease control.
Charlton soil occurs on the mid to upper slope on basalt

rises and low hills. The soil is moderately deep (50-100cm),
coarse self mulching, black cracking clay on basalt. The soil
is suited to continual grain cropping with good nutrition and
rotation for weed and disease control.
Beauaraba soil occurs on upper slopes on low basalt hills

and crests of ridges. The soil is very shallow (10-30cm),
very dark, cracking clay overlying basalt. The soils is best
suited to grazing of pastures with limited suitability for
forage and field crops.
Kenmuir soil occurs on steep hillsides and scarps on basalt.

The soil is very shallow (5-25cm) gravelly or stony, brown
loam or clay loam on basalt. The soil is best suited to native
timber production and nature conservation.
Poplar Box Walloons with Elphinstone soil occurs on slopes (2-6%) of gently
black self mulching cracking undulating to undulating plains and rises. The soil is a deep
clays on Walloon sandstone. (100-150cm), fine self mulching, black cracking clay on fine
The soils are susceptible to grained sandstone. The soil is suitable for continual grain
severe sheet, rill and gully and forage cropping.
erosion.
4.4 Remnant vegetation
The majority of the land suited to cultivation has been cleared of vegetation. Remnant vegetation
exists on the upper slope and crest of the basalt hills and plateaus and areas of Walloon sandstone
soils.
The latest Regional Ecosystem map for the area (see Figure 4.3) lists a small area of dominant
endangered ecosystem of 11.3.21 (Queensland bluegrass – see area shaded pink within the Mining

Lease Application area) and there has been a recording north west of the proposed mining area of a
rare plant, Digitaria porrecta, finger panic grass. With the prevailing drought conditions it is difficult
to ascertain if these grasses still persist and vegetation surveys will be conducted to determine if
these grasses are present.
4.5 Surface water
Hodgson Creek starts approximately 15 km south of Toowoomba and travels 30km before flowing
southwest through the Project area where it is flanked by deep alluvial plains. Hodgson Creek then
flows southwest for a further 15km to join the North Branch of the Condamine River. The
catchment at Balgownie (approx 2km downstream from Felton) is approximately 560 km2 with an
annual discharge range of 333-154523Ml over an 18 year period. The hydrology of Hodgson Creek
has not been studied and no assessment has been made on the buffer zones that must be maintained
either side of Hodgson Creek to ensure that properties upstream of the Project are not impacted
adversely during flood events.
4.6 Ground water
The ground water sources in the Project area are the alluvial plains of Hodgson Creek, the Walloon
sandstones, the Hutton (Marburg) sandstones and the basalts. All the groundwater resources in the
area have been allocated for use by landholders. The exploration activities have located
groundwater in the overburden above the coal measures which is not associated with the alluvial of
Hodgson Creek. The quality of this water is suitable for stock but not for irrigation.
4.7 Air Quality
The region surrounding the Project site is rural with intensive cropping, cattle grazing, lot feeding of
cattle and intensive poultry farming. Emissions from these activities will be dust from cultivation
and harvesting activities and odour from cattle lot feeding and poultry farming. The closest EPA
monitoring site is Toowoomba North which may not be applicable to this area, as the land-use on
the outskirts of Toowoomba may differ from the Felton area. Monitoring sites will be established at
appropriate locations around the Project area.
4.8 Noise and Vibration
The agricultural practices in the Project area generate noise typical of a rural community and are
generally accepted by the community. There are currently no industries in the area that generate the
noise and vibration associated with mining activities.
4.9 Existing ecosystems
Flora
Figure 4.3 is a map showing existing ecosystems in the area of the proposed mining leases (the total
area of which is outlined on the map). As indicated in section 4.4, remnant vegetation exists on
basalt ridges. The remnant vegetation areas shaded green are not of concern, but the remnant
vegetation area shaded pink is classified as endangered. The remainder of the landscape has been
intensively farmed.

Fauna
Typical of much of the Darling Downs, native fauna habitats have been greatly impacted by
agricultural development in the Felton East area. Many natural habitats occur as remnants within
this agricultural landscape, and some species of native fauna are able to exploit agricultural land to
varying degrees. Some species are however, locally restricted to, or highly dependent on the
remnants of the natural landscape.
Queensland Parks and Wildlife Service (EPA) records indicate the presence of the following
threatened (rare, vulnerable or endangered) species within 25 km of Felton East, listed under the
Nature Conservation Act 1992 (Queensland) and/or Environment Protection and Biodiversity
Conservation Act 1999 (Australia):
Grey Goshawk
Major Mitchell's Cockatoo
Glossy Black Cockatoo
Painted Honeyeater
Swift Parrot
Lewin's Rail
Powerful Owl
Black-breasted Button-quail
Bulloak Jewel (butterfly)
Spotted-tailed Quoll
Brush-tailed Rock-wallaby
Koala (southeast Queensland)
Long-legged Worm-skink.
These species above are generally associated with native vegetation, and so the remnant natural
habitats around Felton East are of possible significance to them.
In contrast, however, a population of the Grassland Earless Dragon (Tympanocryptis pinguicolla)

was discovered in recent years on the Darling Downs to the east of Pittsworth. This species had
been considered extinct in Queensland until its rediscovery, and is now listed as Endangered
(Nature Conservation Act 1992). All specimens are known from highly modified agricultural land,
typically “small holdings devoted to strip-farming of mixed crops, such as cotton, sorghum, maize
and sunflower interspersed with fallow land. Large areas of native and introduced grasses existing
as headlands, and along drainage lines are a feature of the farmlands where the dragon exists” (EPA,
2008: www.epa.qld.gov.au). It is possible this species might also occur in the Felton East area.

Figure 4.3 – 2003 Regional Ecosystem Map
with Proposed Mining Lease Application Area

5 Measures to Control Potential Environmental Impacts
5.1 Air
Impacts on air quality will be generated by the following activities:
• Dust from the mining operations and coal handling processes;

• Flue gas from the coal drying operation;
• Flue gas from the gas engines generating power for internal use;
• Flue gas from the IGCC power plant;
• Fugitive emissions including odours; and
• Greenhouse gas release from the coal reserves during mining and processing.
Mitigation
Dust generation will be managed by water sprays supplemented by commercially available dust
suppressant agents and by forest plantations established as soon as practically possible within buffer
zone around processing plant and mine.
Flue gas from the drying process may contain particulate coal. This stream will be treated using a
baghouse to ensure emissions are within allowable limits.
Flue gas from the dryer, the gas engines and the power plant will contain standard combustion
products, including NOx. Air emission modelling work, burner design and any post combustion
capture systems required, will be detailed during the design of the Project to ensure air emissions
are within acceptable limits.
Odour has been identified by the project team as a source of community concern. The processes of
coal drying at relatively low temperatures and combustion of the gas from gasification to make
power are not expected to generate odours. Given the community concern however, Ambre Energy
will carry out test work to determine if odours will be present in any of the continuously operating
streams.
With the exception of the dryer, gas engines and power plant flue gases, all other gas and liquid
streams containing the product hydrocarbons are fully enclosed. However, fugitive emissions are
often the source of odour complaints from coal and hydrocarbon processing and these will be
controlled by the development of Standard Operating Procedures to ensure, among other things, that
the air is evacuated and treated before maintenance is conducted.
5.2 CO2 Emissions
Based on test work completed to date and current design parameters, the Project will generate the
following CO2 emissions for each of the 3 main products:
• Synthetic Crude Oil – 120kg of CO2 emission per bbl or 800kg CO2 emission per tonne of
crude oil produced;
• DME – 1,000 kg of CO2 emissions per tonne of DME;
• Power from IGCC power plant – 500kg of CO2 emissions per MWhr of generated power.

Mitigation
The above figures can be significantly reduced by removing CO2 from retort gas and from tail gas
before combusting it in the power plant. The process plant configuration can be tailored for
production of high purity CO2 gas, which can be used by food manufacturers and by the oil industry
for Enhanced Oil Recovery. In addition to potential CO2 recovery and storage, Ambre Energy is
planning to implement the following action to offset CO2 emissions:
• Planting of soft and hard wood plantations within the buffer zone around processing plant
and mine, and on the waste dumps reclaimed after open cut coal mining;
• Planting of carbon sink forest plantations in Australia and in other countries;
• Application of Ambre Energy’s technology and process configurations, including

concentration and capture of CO2, to other coal producing regions such as Indonesia, China
and India.
5.3 Ground Water
Initially mining will intersect ground water resources in the Walloon coal measure and may
intersect groundwater in the alluvials of Hodgson Creek. Eventually aquifers in the basalts may be
intersected.
Mitigation
Groundwater studies will be conducted prior to mining operations commencing to quantify aquifers
and to ascertain the impacts of mining on these aquifers. The water from these resources is fully
allocated to the farming community, and discussions will be held with the Department of Natural
Resources and Water as to the process required to access these resources.
Water extracted by the mining process will be used for such purposes as coal washing and dust
suppression.
5.4 Surface water
The disturbance from the mining operations will generate large amounts of sediment which has the
potential to flow into Hodgson Creek.
Mitigation
As surface water will be a valuable commodity, the emphasis will be on the harvesting of runoff for
re-use rather than simply to still the runoff for sufficient time to allow the sediment to settle. The
first structures to be constructed will be the levees on both sides of Hodgson Creek to retain all
runoff from the construction and mine development sites.
The levees will be located to leave a buffer zone of at least 200m between the levees to
accommodate flood flows in Hodgson Creek. The sizing of the buffer zones is to be validated by a
hydrological study of the flow characteristics of Hodgson Creek. On the western side this levee will
form the initial outer slope of the overburden dump which will progress to the west as the mine
advances. The runoff from the levee construction will be directed into sediment sumps. All runoff
upslope from either levee will be directed into large sumps, constructed to allow access for portable
recycling pumps.

Individual work areas with high sediment yield potential such as the coal preparation plants and coal
stockpiles will be equipped with sediment sumps to remove coarse sediment before flowing to the
larger levee sumps. Graded banks and waterways will be constructed to direct runoff from unmined
areas around the mining and processing operations. This water will be retained in separate dams and
sumps for recycling.
5.5 Water Conservation
Water is required for the mining and coal washing processes as well as the processing of the coal to
produce gas and hydrocarbons. Water is a scarce resource on the Darling Downs and the Project
will impact on the water resources.
Mitigation
Ambre Energy will design the mining and processing to maximise the re-cycling of water as well as
water harvesting from the site. A further conservation measure will be to minimise evaporation
losses by designing the water supply dams to have the least surface area per storage volume. A
water storage dam with a capacity of 10,000 ML and a depth of about 12 metres will be built. Water
from smaller sediments dams will be pumped to this dam, or the smaller dams will be equipped with
water fill points to supply water to water trucks for dust suppression. Dust suppressants will also be
used to improve the efficiency of the dust suppression water.
The use of evaporation blankets on the main storage dams will also be investigated.
5.6 Water Quality
Mining activities will generate large quantities of sediment as will the diverting runoff water around
the operational areas. This sediment has the potential to impact on the quality of water and aquatic
habitat in Hodgson Creek and other small steams flowing from the Project area.
Mitigation
Runoff from the mining activities will be managed through a series of sediment dams and the
stringent requirement to maximise the recycling of water, a resource in short supply.
Re-direction of runoff around the mining activities from Project controlled land also has the
potential to generate large sediment loads from erosion of waterways and cultivated paddocks.
Waterways and diversion banks will be designed and constructed using conservative design criteria
to minimise water velocities, and waterways will be stabilised with grass cover or the placement of
rock mulch to minimise erosion.
Management of land controlled by the Project and not required for mining activities will be
designed to minimise runoff and thus erosion. The land acquired by the company will be
amalgamated into manageable production units. Farming practices will maximise crop stubble
retention or pasture cover and minimum tillage will be practised. Alternatively, forest plantation
options will be evaluated.

5.7 Hydrology
The incursion of the Project onto the flood plains of Hodgson Creek will cause changes to the flow
characteristics during high flow conditions. This may cause raised water levels upstream from the
levees, affecting upstream farming practices on the alluvials and infrastructure such as pump
installation.
Mitigation
A hydrological study will be commissioned to identify the changes in flood levels for various flood
events. This study will identify farming areas that may be affected and will provide a basis for
discussions with upstream landholders. The study will validate the arbitrary 200m Hodgson Creek
corridor or recommend changes to reduce upstream effects.
5.8 Land Management
Overburden Characterisation
As yet the overburden has not been characterised but initial observation of the Walloon sandstone
and the basalts indicates that these materials weather to form good agricultural soils. The mining
techniques will use truck placement of the overburden so that selective handling of overburden will
be used to bury any material that may generate acid or undesirable levels of heavy metals that may
be mobilised by leachate from the dumps. The overburden strata will be analysed to identify strata
that requires selective handling and placement in the dumps.
Select overburden will be used to rock mulch the outer slopes of the levee. This material will be
either basalt or Walloon sandstone or a combination. Initial wetting and drying tests on the Walloon
sandstone indicate that this sandstone is resistant to breakdown by wetting and drying, an indication
of high silica cementing compounds. The sandstone is not as resistant to breaking as is the basalt but
will form an ideal rock to blend with basalt as it will provide both erosion resistance whilst
weathering into a soil. The soil component is essential to ensure that runoff remains on the surface
of the rock mulch rather than eroding the subsurface below the rock.
Topsoil Management
Before development commences on the site, a soil survey will be conducted to identify the
suitability classification of the various soil types as to their potential to produce the range of crops
that have been grown in the past. One of the criteria used to determine the suitability class of a soil
profile is the potential to store plant available water (easily extracted by plant roots) in the profile.
The aim of the rehabilitation program is to return a landform on the mining areas with a similar
proportion of suitability classes as existed pre mining. Thus returning the soil profile is an important
first step.
During the mining operations more intense soil surveys will be conducted to plan topsoil stripping
and storage operations. Topsoil and the subsoils to a depth indicated by the suitability classification
will be stripped separately and replaced in the reverse order on the reshaped overburden dumps.
Where possible the soil profiles will be directly replaced on reshaped spoil.
On the processing plant site generally only the topsoil layer will be removed for storage and
eventual return as the pavement for the product storage area will be placed directly on the subsoil.
Where geotechnical stability is an issue the subsoils may be removed for eventual return before the
topsoil is respread during the rehabilitation of the plant infrastructure site.

Topsoil will be removed by scrapers and stockpiled separately from the subsoil, which will be
removed either by scrapers or by shovel and truck. When the overburden dump is sufficiently
progressed to the west the subsoil and topsoil will be directly respread. Where topsoil and subsoil
has to be stored the sides of the topsoil dumps will be shaped to a 4:1 gradient and the dump surface
cultivated and planted with cereal/grass/legume mix to minimise erosion and to retain biological
activity in the soil.
Overburden Removal and Landform Construction
Overburden will be removed by a conventional shovel and truck operation with the initial
overburden being transported to an external dump that will form the levee approximately 100m west
of Hodgson Creek. The height of the levee/dump will be determined by a life of mine overburden
balance which will determine the surplus of overburden that has to be placed in external dumps.
Initial indications are for a levee at RL 446m advancing to the west forming a plateau with the
surface draining to the west at approximately 0.5%. As the dump progresses over the initial clay
treatment pond, new ponds will be progressively developed in the mined-out pits. At RL445 the
dump will rise at a maximum 10% gradient to meet the smaller of two remnant basalt hills at
RL495. The top of this hill will not be mined.
At approximately 15m vertical intervals a 20m horizontal berm will be constructed between each
10% slope. The resultant landform will have a maximum slopes length of 150-200m to minimise the
erosion potential during the initial re-vegetation phase to stabilise the slopes. The runoff from the
dump will be discharged to natural ground via unmined stable natural waterways or a constructed
waterway lined with rock mulch. During the mining operation all runoff will be directed into
sediment sumps, including the clay treatment ponds.
Revegetation
As the soil profile is respread, care will be taken to reduce compaction from the spreading
equipment by ripping, and to blend the subsoil with the reshaped spoil surface. Topsoil will then be
respread and further ripping will remove compaction and blend the topsoil with the subsoil during
the seeding process.
The initial surface treatment will be to control initial erosion by ripping and planting high rates of
cereal cover crops as well as grasses and deep rooted legumes. Fertilizer will also be applied.
Depending on the season it may be necessary to hay mulch the surface, immediately after seeding,
to both minimise erosion as well as provide shade to reduce water loss from the surface, which will
extend the germination period. The aim is to produce a vegetative cover of at least 70% projected
leaf cover, to effectively control erosion as well as to build up the organic carbon in the soil that
would have been lost during storage.
This vegetative cover will remain for several years after which time cropping trials will be
implemented. These trials will ascertain the suitability of the various rehabilitated landforms to
maintain acceptable erosion losses during fallow period with reduced standing stubble cover after
the crops have been harvested.
Trees will be introduced in some areas only after the slopes have been stabilised with a vegetative
cover. This will involve using seedlings and may require initial irrigation depending on the rainfall
patterns. Experimentation will also be done with direct seeding on areas where rip lines pond
rainfall runoff generated from adjacent tracks and flat areas. These tracks that generate runoff are
generally constructed on the berms.
The acquisition of farming properties can lead to sub standard management of this land with
attendant decline in productivity and weed management and an increase in erosion. This will be a
concern for local landholders who have farmed in this local area, sometimes for generations.

Secondly the development of the Project has the potential to produce rehabilitated landforms with
much lower land suitability criteria than the present criteria.
Mitigation
Land management will involve:
• the farming or commercial forestation of the land acquired by the Project until required by
the mining operations;
• the rehabilitation of the mined land to appropriate land suitability classes;
• the farming or commercial forestation of the rehabilitated land;
• the decommissioning of the final mine voids, infrastructure and processing facilities and the
return of pre mine land suitability to this land; and
• the disposal of the land after decommissioning of the Project.
These issues will be addressed and strategies developed well before construction to ensure that land
acquired by the Project is managed with conservation farming or forestry practices, and the return of
appropriate land suitability classes will be an integral part of the rehabilitation and decommissioning
program. The rehabilitation program outlined in section 5.8, in particular the topsoil and subsoil
management, will ensure that the rehabilitated landform provide a similar proportion of land
suitability classes as now exist.
5.9 Transport
The transport requirements of the Project will involve the following:
• daily commuting of workers, both construction and permanents with 24 hour operation for
permanent workers;
• delivery of construction materials which may include large components requiring escorts;
and
• the movement of large quantities of hydrocarbon liquids and possibly gas from the
petrochemical plant for export or use in a coastal refinery.
Mitigation
The project team will investigate all these issues to ensure that these traffic movements do not cause
unnecessary damage to local or regional roads, and that other options are investigated including rail
or pipeline transport of product.
Risk assessment will be conducted on the various options, including the commuting of permanent
workers. The final selection of the transport options will be driven by firstly, risk assessments and
secondly, economics.

5.10 Flora and Fauna
The remnant native vegetation, predominantly Eucalyptus coolabah and Eucalyptus orgadophila,
will be removed except for the areas of hill tops that will not be mined because of the depth to coal
being too great. A smaller area of Queensland blue grass will also be removed by mining. At this
stage the habitat value of these communities for the native fauna of the area is not known.
Mitigation
The rehabilitation programme will develop landforms with the same or better suitability classes so
that the re-introduction of these tree species will be incorporated into the programme. Further,
where hill tops have already been cleared for pasture, a program to re-introduce native tree species
will be investigated and implemented. Techniques will involve both direct seeding and the use of
tube stock.
A fauna survey will identify the importance of the vegetated areas as fauna habitats, and the re-
establishment of these native tree areas will be linked by tree corridors to similar vegetation
communities adjacent to the project area to facilitate the movement of fauna into the rehabilitated
areas.
5.11 Native Title and Cultural Heritage
The land in the Project is freehold and as such Native Title has been extinguished. The bed of
Hodgson Creek would appear to be open to claim as the freehold blocks do not abut in the centre of
the creek, but a Native Title Search conducted on the 20 August 2007 has identified that there is no
Native Title on this land. Hodgson Creek was included in the area claimed by the Western Wakka
Wakka People on 27 January 1999. This claim has been finalised so that Hodgson Creek is not
under claim.
A cultural heritage survey has not been conducted on the Project area.
Mitigation
Hodgson Creek will be protected by a buffer zone of approximately 200m. A cultural heritage
survey will be conducted over the Project area leading to the development of a Cultural Heritage
Management Plan, depending on the results of the survey.
5.12 Visual Amenity
Due to the topography, the Project site is highly visible from the adjacent public roads and presents
a vista of cultivated paddocks extending up to vegetated hill tops. Due to the small rural population
there is a limited amount of domestic lighting resulting in a clear night sky. This landscape will be
progressively removed while the activities associated with mining and the work areas will be
illuminated continuously.
Mitigation
The progressive loss of the vista will be partially offset by the construction and rehabilitation of the
main levee on the western side of Hodgson Creek which will be approximately 30m in height and
will partially hide the mining operations. Very little else can be done to hide the mining activities
from the Pittsworth–Felton road, although planting of trees may have some effect. The processing

areas will be landscaped and lights will be subject targeted and time limited to minimise annoyance
to offsite dwellings.
5.13 Environmental Management
The strategies and techniques to mitigate environmental impacts will be incorporated in an

Environmental Management System (EMS) to the ISO 14001 standard which will operate from the
start of construction. Separate EMSs will operate for the mining and coal preparation operation on
the Mining Leases, west of Hodgson Creek and the petrochemical processing facility on the
industrial site, east of Hodgson Creek.
5.14 Hazards and Risks
In addition to the potential hazards already identified as being associated with an open cut mining
operation, such as personnel safety, environmental damage, vibration, noise, dust, etc., there are also
potential hazards associated with the production, storage and transportation of hydrocarbon fuels.
Mitigation
There are well established procedures for dealing with hydrocarbon fuels and these will be
identified in detail in the EIS.

6 Stakeholder Consultation
Ambre Energy has started a consultative process with relevant interested parties. A key aspect of
this process is discussions with landowners and community members directly affected by the
Project to identify any areas of concern. This process will continue and includes identification of all
stakeholders, discussion with Local, State and Federal Government representatives, communication
plans and consultation and negotiation on measures required to address compliance and community
concerns.


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Felton Hybrid Energy Project

Initial Advice Statement

Ambre Energy Limited

ACN 114 812 074

Level 6 Grant Thornton House Tel: +61 (0)7 3009 9180

Ambre Energy Limited 2

1.1 Project Overview

Felton Hybrid Energy Project

Figure 1.1 - Felton Hybrid Energy Project location

1.2 The Proponent

Ambre Energy Limited 3

1.3 Outline of Proposal

The Project will be developed in 3 stages:

Ambre Energy Limited 4

Stage 3 of the project will involve:

¾ doubling the capacity of the open cut coal mine to 24 Mtpy;

¾ construction of a second 12 Mtpy coal preparation plant;

1.4 Purpose and Scope of Initial Advice Statement

• Assist the Queensland Coordinator-General in making a decision on whether to declare the

• Provide information to and facilitate consultation with governments, key stakeholders,

Complexity of local, State and Federal Government Requirements

Ambre Energy Limited 5

Potential Environmental Effects

The potential adverse impacts of the Project are:

• Possible disruption of groundwater aquifers in Hodgson Creek alluvials, the Walloon

Environmental and Planning Approvals

Potential Effect on Relevant Infrastructure

Ambre Energy Limited 6

2.1 Project Location

Figure 2.1 - Felton Hybrid Energy Project location plan

2.2 Background to the Project

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Figure 2.2 - Exploration Drilling at Felton North looking west to Millmerran

2.3 Project Justification and Alternatives

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2.4 Project Components

• Felton North Coal Mine with a production capacity of 24 Mtpy;

• Char (spent coal) gasification units capable of gasifying 8 Mtpy of char;

• DME production plant capable of producing 4 Mtpy of DME;

• IGCC power plants capable of producing a total of 800 MW of electricity.

2.5 Felton North Coal Mine

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Figure 2.3 - Borehole location Plan

Figure 2.4 - Stratigraphy of the Felton North Deposit.

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Figure 2.5 - Typical coal intersection at Felton North.

Mine layout and Infrastructure

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Figure 2.6 - Open Cut Mine and Infrastructure layout plan

Clay Settlement Ponds

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2.6 Coal Preparation

Figure 2.7 – Coal Preparation Plant Scheme

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Figure 2.8 – Coal Processing Scheme

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Gas conditioning and co-generation of power

Gasification including DME production and IGCC power generation

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Air emissions will only be generated at 3 points in the process:

• Exhaust from the IGCC power plants.

2.8 Resources required

Other potential sources include: