Severe mine subsidence damage has cost the state of New South Wales $8.7 million in the last five years, a cost which is bound to rise according to mine subsidence expert Professor Phillip Pells.
The Newcastle Herald yesterday revealed that the Mine Subsidence board purchased five subsidence-damaged homes in Lambton last financial year for $3.8 million.
Fourteen homes were damaged when a section of the Old Lambton Colliery Workings collapsed in 2012.
Professor Pells said more compensation will be paid as time passes, as it is inevitable that old mine workings will fail.
“As time goes on pillars collapse and workings collapse and we are going to see ongoing problems with sinkholes,” he said.
“This will continue to occur, that is why the Mine Subsidence Compensation Act was set up, because it was known this type of thing was going to happen on a regular basis.”
At September last year the Mine Subsidence Board owned 21 properties affected by subsidence, at a total cost of $8.7 million.
Pells said the laws relating to compensation for people affected by mine subsidence need to be changed, as the present legal situation only compensates for property improvements such as buildings, rather than the land itself.
“It is far too narrow and the onus is always on the residents to prove, against opposition from the board, that the damage is from mine subsidence,” Pells said.
“It can very, very, very difficult for people who are impacted by sinkholes or subsidence to be looked after or compensated.”
Only 10 per cent of subsidence claims have been compensated in 2011-12, which is 44 of 438 claims.
Earlier this year Newcastle councillor Tim Crakanthorp called on government to identify a better system to address mine subsidence, while also facilitating development in the CBD.
The Hunter branch of the Property Council identified subsidence as the key obstacle for investment in the inner-city, with the costly grouting process required to stabilise old mine workings a significant barrier for developers.
Crakanthorp said grouting old mine workings was crucial.
"The whole of Newcastle's CBD is undermined," he said.
"We've got a compromise there where we get that working again with the state government to look at how we are going to do grouting under the CBD.”
The Property Council of Australia has proposed a developer contribution scheme to fund mine grouting strategies, where the government would contribute up front and the cost of the work would be recouped from developers.
Urban Development Institute of Australia chief executive Stephen Albin said ‘‘Something needs to be done”.
“While we have a lot of benefits out of mining… we need to find a way that the government can assist,’’ he said.