On 24 October 2019, the Statutes Amendment (Mineral Resources) Act 2019 (SA) received the Governor’s assent, after passing through both Houses of Parliament without being altered in either House. The resulting changes to the Mining Act are expected to modernise the Mining Act and improve the way it both regulates and facilitates mining projects. The changes also have a strong focus on the ongoing communication and relationships between explorers and operators and the relevant landowners. A commencement date for the amendments has not yet been set, but here’s a reminder of some of the key changes that are on the way...
Amendment of the Mining Act
The passage of the Statutes Amendment (Mineral Resources) Act 2019 (SA) (Amending Act) through Parliament in October 2019 is the culmination of an extensive process to modernise and improve the Mining Act 1971 (SA) (Mining Act), that began with the launch of the Leading Practice Mining Acts Review in 2016.
The Amending Act will make substantial changes to the Mining Act when it ultimately comes into effect. However, the date of commencement has not yet been proclaimed.
We understand that consultation on accompanying new Mining Regulations is proposed to be undertaken shortly, with commencement of the amendments to follow completion of that process.
Given the passage of time since publication of the recommendations from the Leading Practice Review, and circulation of the first drafts of the proposed amendments, this alert is a quick reminder of the key changes that have been incorporated into the Amending Act.
The maximum term of exploration licences will be increased from 5 years to 6 years.
Importantly, exploration licences will be able to be renewed (over the entirety of the licence area) for a further 6 years (giving a total term of 12 years). A renewed licence can be further renewed for a period of 6 years (giving a total term of 18 years) but the area of the licence must be reduced by 50% for the final 6-year period. To that end, the concept of subsequent exploration licences will be removed from the Mining Act.
The Amending Act will introduce retention status for exploration licences, for a period of up to 6 years. This will operate in a similar manner to retention leases.
The Amending Act also clarifies the processes involving applications for exploration licences, including how multiple applications in respect of the same area will be considered. It also allows for the surrender of portion of an exploration licence and grant of a new exploration licence over the surrendered area to a nominated third party as a result of an agreement between the existing and new tenement holders.
The 21-year limit on the initial term of a mining lease and a miscellaneous purposes licence will be removed.
New Division 7 of new Part 8B sets out a process for holders of a mining lease, retention lease or MPL to obtain approval from the Minister to make changes to the operations authorised by the tenement, including by way of changes to the tenement conditions. This may involve public consultation, at the discretion of the Minister.
The original recommendation of the Review Team was for the term “exempt land” to be changed to “restricted access land.”While this change has not been incorporated, the Amending Act will make some important changes to the definition of what constitutes “exempt land”.
Firstly, the current 400 metre buffer around residences is being replaced with a more granular “prescribed distance”.
For low impact operations, the prescribed distance is reduced to 200 meters. For advanced exploration operations, the prescribed distance is 400 metres (as per the current regime). For all other “authorised operations” (which include exploration, mining and ancillary operations), the prescribed distance is increased to 600 meters, or a distance set by the Regulations (which have not yet been released for consultation).
“Low impact exploration operations” are exploration activities (other than those involving declared equipment) which are not reasonably expected to have any significant adverse impact on the environment, or which will reduce the impact of exploration on the environment, or which are otherwise prescribed as “low impact exploration operations” by the Minister or the Regulations.
“Advanced exploration operations” are exploration activities involving declared equipment, those which are reasonably expected to have a significant adverse impact on the environment, and those prescribed as “advanced exploration operations” by the Minister or the Regulations.
Secondly, the threshold value for a building or structure used for an industrial or commercial purpose (which triggers a buffer of 150 metres, regardless of the nature of the mining operations being proposed or undertaken) will be increased from $200 to a “prescribed amount” of $2,500, or a greater amount if specified in the Regulations (which have not yet been released for consultation).
Section 9AA of the Mining Act will be expanded to allow a landowner to make the first approach to a tenement applicant, with a proposal for the conditions under which the landowner may agree to waive the benefit of their exempt land. At present, the Mining Act only contemplates that the first approach will be made by the tenement applicant.
Similarly, both the tenement applicant and the landowner will have the right to make an application to the ERD Court for an order in circumstances where they have been unable to reach agreement on the terms of the waiver.
The notice period for notices of entry will be increased from 21 days to 42 days.
Additional notices of entry will be required for advanced exploration operations (eg use of declared equipment) where those operations are not covered in an earlier notice of entry, and in advance of an application for a mineral lease, retention lease or miscellaneous purposes licence.
The extent of assistance to be provided by mining companies to landowners for the reasonable costs of obtaining legal assistance will be increased from $500 to $2,500, indexed annually via the Mining Regulations.
The Amending Act will create a significantly expanded Mining Register that will provide for a broader range of documents and information about mining tenements to be formally recorded and available to the public.
The new provisions also allow for a party to have a mortgage or other form of charge over a mineral tenement listed on the Mining Register.
The new Mining Register provisions will allow a person who claims to have an interest in a mineral tenement to lodge a “caveat” on the Mining Register. The caveat may either (a) forbid the registration of any transfer, mortgage or voluntary surrender affecting a specified interest in the mineral tenement (an absolute caveat) or (b) forbid the registration of any transfer, mortgage or voluntary surrender affecting the mineral tenement unless the transfer, mortgage or surrender (as the case may be) expressly states that it is to be subject to the interest claimed by the caveator (a claim caveat).
The approach to the calculation of royalties will be updated, with additional alternative methods available for calculating market value.
Authorised officers will have additional powers to search and examine land and vehicles, but these may only be exercised with a warrant from the court.
This Alert is intended as general information only. It does not purport to be comprehensive advice or legal advice. Readers must seek professional advice before acting in relation to these matters.