Review of Mining Act & Mining Regulations - State Discussion Paper

Published: | Filed Under: Energy, Resources

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In a Nutshell

The Discussion Paper on the review of the Mining Act and Mining Regulations is a valuable aid for the forthcoming discussions regarding proposed changes to the Act and Regulations covering many of the provisions of the Act and Regulations requiring review.

Submissions on the review of the Act and Regulations are required to be made by 28 February 2017.  In many instances the Discussion Paper seeks input from stakeholders.  If you wish to take up this invitation to make a submission, and require assistance in doing so, please contact our Resources Team members.

Introduction

In late December 2016, the Department of State Development (DSD) issued a lengthy Discussion Paper on the review of the Mining Act and Mining Regulations.

The approach taken in the Discussion Paper is to be welcomed.  It seeks to identify the main issues with the current legislation, proposes ways in which these issues may be dealt with and seeks stakeholder input regarding these issues and other issues identified by those stakeholders.

The Discussion Paper divides its consideration of the provisions of the Act and Regulations into 3 sections:

  • Exploration, Mining, Quarrying, Community and Land Access;
  • Sustainable Futures;
  • The Benefits of a Streamlined, Rigorous and Competitive Regulatory Environment.

We cover each of these sections separately.

Exploration, Mining, Quarrying, Community and Land Access

The Discussion Paper identifies the following issues:

  • The benefits of using simple, accurate terms and language which make sense to everyone - for example, the term “mining tenement“ describing both exploration licences and mining leases;
  • Ensuring the community has the information it needs at the right time and ensuring DSD’s assessment processes are transparent.  DSD “intends to propose measured amendments to the Mining Act that will facilitate greater open access to relevant documents”.  The Department is also considering changes that would allow for earlier disclosure of geological information, if it is not commercially sensitive;
  • Making sure everyone understands land access processes and expectations.  The Discussion Paper raises the question whether there are opportunities to improve the entry to land process. 

In relation to exempt land, DSD’s position is that the current provisions strike the right balance.  However, it is proposed that changes to the Act be made to allow landowners to commence exempt land proceedings (in respect of retention or mining leases) at any time after the close of statutory submissions. In addition, where recourse to court proceedings is required for a determination that a waiver of exemption be granted, it is proposed that jurisdiction be vested in the “appropriate court”.  With respect to this latter proposed change, reinstating the Warden’s Court as an “appropriate court” is to be welcomed.  However, we remain concerned that court processes to resolve access to exempt land are unduly adversarial in circumstances where a mining operator is seeking to establish or maintain a social licence to operate.  Also, the State is left with no remedy to permit a mine of State or national significance in circumstances where a court ultimately determines not to make an order waiving the exemption.

Currently the Mining Act allows for changes to mining lease conditions in only very limited circumstances.  The Discussion Paper recognises that the scope of mining operations may well change over the course of a mine’s life.  Views are sought by DSD regarding a consultation process to give landowners and the community the right to have input on proposed changes.

Sustainable Futures

This section of the Discussion Paper focuses on a number of proposals to improve environmental regulation and compliance under the Act.  These proposals extend to the following preventative and reactive compliance measures:

  • allowing the Minister to condition PEPRs to preclude operations starting until certain conditions have been met, for example,  any security bond has been paid or a compliance direction satisfied;
  • prohibiting/delaying the expiry or surrender of a tenement until all environmental and other obligations are complied with;
  • incorporating clear provisions in the Mining Act allowing for a mining operator to be pursued for environmental damage after the tenement has expired;
  • delaying approval of PEPRs or other approvals if an operator has non-compliant operations elsewhere in the State or other non-compliances under the Act;
  • improving government and industry environmental accountability and transparency by allowing for publication of (more extensive) government and operator documents;
  • improving industry accountability by requiring timely payment of amounts payable under the Act and providing for a discretionary power to prohibit tenement renewals etc. until all amounts are paid;
  • improving accountability for mine closures;
  • introducing a leading practice financial assurance model which:
    • covers financial and environmental liability and risk (preferably in a way that also generates revenue for rehabilitation of legacy sites);
    • incentivises progressive compliance and rehabilitation; and
    • is flexible and cost-effective for operators.

          The Discussion Paper suggests that a model combining company/mine specific financial instruments and a pooled fund may be the preferable option;

  • the possible introduction of a legal mechanism to allow for the transfer to approved third parties of ongoing monitoring and maintenance obligations in relation to mine assets which are not capable of being removed from the mine site post mine closure.

The Benefits of a Streamlined, Rigorous and Competitive Regulatory Environment

The Discussion Paper makes a number of proposals in this regard:

  • a greater use of on-line usage for tenement applications, transfers etc., subject to data protection and this use ensuring faster and better service delivery;
  • broadening the scope of documents which may be registered under the Act, to include contracts and non-proprietary interests in tenements;
  • amending the caveat provisions by moving to a system which recognises absolute caveats, caveats by consent and subject to claim caveats; the last category prohibiting all dealings, including surrenders.  In addition it is proposed that the Mining Registrar no longer reviews caveats to determine whether there is a caveatable interest, rather leaving it to the parties to determine this;
  • DSD is seeking input on ways the current “one window” to Government processes can be improved;
  • ensuring that the Act reflects a modern, flexible tenement structure, including:

For exploration licences:

  • revision and possible extension of the period for which ELs may be granted and providing continuity of tenure in lieu of the current subsequent ELs;
  • ensuring secure flow-on tenure and expenditure compliance;
  • flexible forfeiture and licence transfer mechanisms;
  • overlapping mineral specific ELs;
  • size and shape of ELs, amalgamation of ELAs and subdivision of ELs;
  • improving DSD’s administration of the ERA process;
  • removing the requirement for Ministerial consultation at the time of renewal of an EL in or adjacent to a specially protected area.  Initial consultation at the grant and PEPR approval stages should suffice;
  • allowing an operator to apply to the court for forfeiture of an EL held by a different operator – a “use it or lose it” forfeiture process.

For mineral claims:

  • the Discussion Paper queries whether mineral claims should be removed from the Act, subject to this not leading to increased approval times.

For minerals and extractive minerals leases:

  • introducing a combined lease for both minerals and extractive minerals;
  • allowing multiple leases over the same area for different minerals;
  • whether the permissible term of leases should more accurately reflect a project’s mine life rather than a fixed maximum of 21 years (subject to renewal rights).

For miscellaneous purposes licences:

  • the Discussion Paper queries what changes/improvements can be made to the MPL framework or, alternatively, whether relevant operations could be approved under the associated mining lease.

For retention leases:

  • the Discussion Paper queries whether retention leases should be replaced by allowing ELs to be converted to “retention status”.

Other matters:

  • improvements that could be made to the special mining enterprise provisions of the Act;
  • proposals to decrease assessment times;
  • changes to the Act to facilitate changes to ML conditions during a project’s mine life;
  • replacing the current different processes for surrender, cancellation and suspension of different tenement types with a single consistent process for surrender and a single consistent process for suspensions and cancellation;
  • streamlining Ministerial, Director of Mines and Mining Registrar delegation processes;
  • opportunities to “better balance” DSD’s cost recovery model;
  • amending the point of reference for determining the value of minerals for royalty purposes to the contract price for the first sale (in an arm’s length transaction).

In many instances the Discussion Paper seeks input from stakeholders, including resources companies regarding the proposals in the Discussion Paper.  If you intend to take up this opportunity and make a submission we would welcome the opportunity to assist you.  Submissions are required to be made by 28 February 2017.

Contacts

If you have any queries regarding this alert, please contact:

This Alert is intended as an alert only. It does not purport to be comprehensive advice. Readers should seek professional advice before acting in relation to these matters.