not registered yet? Register
Register for free access
Already registered? Login
flag
  • GDP, US$bn: 1,257.9
  • GDP per capita, US$: 53,657.3
  • Population, mn: 24.0
  • Inflation, CPI ave: 1.3
  • FX, LCY/US$: 1.3
  • Budget Balance, % of GDP: -2.0
  • Mining GVA, US$bn: 73.9
  • Mining Industry Value, US$bn: 127.7
Country: Australia
Regulatory Risk Rating
54
0
100
Score: 54
Substantial Risk
South Australia demonstrates the outcome of a mediocre law being paired with a very high quality system of governance. Though the success of Australia's mining industry may suggest otherwise, this is by no means an example for other countries to follow. A rogue Minister could do some damage with this law in hand and investors should be thankful that such a scenario remains highly unlikely.

Corruption Potential Index

Score: 40
Very High Corruption Potential

Corruption Risk Index

Score: 92
Very Low Corruption Risk

Regulatory Risk Rating

Please subscribe below to view this content.

Mining Overview Commentary plus sign

SOUTH AUSTRALIA - MINING REGULATIONS

GENERAL

Australia, officially the Commonwealth of Australia, is located in the Oceania region and is bordered by the Indian and Pacific Oceans. According to the World Bank, Australia has the 14th largest economy by GDP in the world. Mining is a significant part of the Australian economy and a key industry in the country; in 2016 the sector contributed around 7% of GDP, with mineral exports accounting for approximately 41% of Australia’s total goods and service exports (Australian Government).

South Australia, one of the six Australian states, is located in the southern-central part of the country and is bordered by Western Australia to the west, the Northern Territory to the north, Queensland to the north-east, New South Wales to the east and Victoria to the south-east, with a southern coastline on the Indian Ocean. In 2016 South Australia’s gross state product (GSP) was $100,331 million (AUD), which constituted 6.1% of Australia’s GDP (Australian Government). GSP growth in 2016 was 1.9% (Australian Government), the second lowest growth rate in the country (equal to Western Australia and greater than Tasmania). Between 2010-2015 GSP growth averaged at 1.62%, whilst GDP growth during the same period averaged at 2.7% (Government of South Australia).

The state has a diverse economy, with no individual industry contributing more than 10% of GSP (South Australian Centre for Economic Studies). The largest sectors by contribution to GSP in 2016 were: healthcare and social assistance (9.3%); financial and insurance services (7.1%); manufacturing (6.9%); construction (6.7%); and public administration and safety (6.4%) (South Australian Centre for Economic Studies). Mining was responsible for 3.7% of GSP in the same year. The main exports include wine, copper and wheat; Asia Pacific is the primary export destination, with almost half of all exports sent to the region.

South Australia has a wealth of mineral resources and is a major global producer of iron ore, coal, copper, uranium, and zircon (Government of South Australia). The state also produces lead, silver, zinc and various industrial and extractive materials (Government of South Australia). The minerals and petroleum industry generated $3.8 billion (AUD) in exports for South Australia from July 2016 to July 2017, making it the state’s largest export sector along with agriculture and food (Government of South Australia). BHP Billiton’s Olympic Dam mine, located around 500km north of Adelaide, is the world’s largest uranium deposit, fourth largest remaining copper deposit and the fifth largest gold deposit (South Australian Chamber of Mines and Energy).

South Australia was ranked 21st out of 104 jurisdictions in the Fraser Institute’s 2016 Policy Perceptions Index.

PRINCIPAL LEGISLATION AND REGULATOR

The regulation of mining activities and mineral rights in Australia is the responsibility of the state governments. The principal legislation for the mining industry in South Australia is the Mining Act 1971 (MA), which regulates mining activities and the granting of rights, and the Mining Regulations 2011 (MR). Other relevant legislation includes: the Planning, Development and Infrastructure Act 2016 (PDIA); the Development Regulations 2008 (DR); the Environment Protection Act 1993 (EPA); the Native Title (South Australia) Act 1994; the Mines and Works Inspection Act 1920 (MWIA); the Roxby Downs (Indenture Ratification) Act 1982; and the Opal Mining Act 1995 (OMA). Also of relevance are the multiple guidelines published by the South Australian government, which provide additional direction on various stages of the application processes for mineral rights, as well as on the execution of mining activities.

The Mineral Resources Division (MRD), which sits within the Department of the Premier and Cabinet of South Australia, is responsible for the management of the state’s minerals sector and develops and administers the MA on behalf of the Minister for Mineral Resources and Energy (Minister). The MRD is comprised of various branches, including the Mineral Tenements and Exploration Branch, which is responsible for the administration and grant of mineral exploration and mining titles; the Mining Regulation Branch, which is the principal regulator for mining operations under the MA and OPA and is responsible for the assessment of mining proposals and the approval of Mining Lease conditions; and the Mining Projects Branch which works with industry stakeholders, the government and the community, to facilitate major mining developments in the state. Each branch is headed by a Director of the same title. In addition, the Mining Registrar, established in accordance with section 13 of the MA, maintains the register of claims, leases, licenses and instruments issued under the MA (s. 15A, MA).

All minerals in South Australia are vested in the Crown (s. 16(1), MA).

GRANTS AND FORMS OF MINERAL TITLE

Mineral rights, collectively known as mining tenements, are granted on application. In the case of individuals, applicants must be over the age of 16 (s. 78, MA). Prospecting activities may be carried out in the state without any form of mining tenement, though certain restrictions apply (s. 20, MA).

The following types of mining tenements are provided for in the MA:

  • Exploration Licence (EL): grants the holder the right to carry out exploratory operations as described in the licence (s. 28(2), MA). Applications for ELs must be made in a manner and form determined by the Minister, must be lodged with the relevant Director and accompanied by the application fee (s. 29(1)-(2), MA). The application must include a statement outlining the proposed exploratory operations and estimated expenditure, as well as a statement of the technical and financial resources available to the applicant (s. 29(2), MA). Before granting an EL the Minister will publish a notice in the Gazette and in a state and (where possible) local newspaper (s. 28(5), MA). The Minister may refuse an application on public interest grounds or such other grounds as considered appropriate (s. 29(8), MA). EL may be granted subject to terms and conditions specified by the Minister (s. 30(1), MA; see also r. 47, MR). The EL area may not exceed 1,000 km² (20 km2 in relation to an opal development area) unless the Minister decides a greater area is justified (s. 30AA, MA). An EL is granted for a term of up to five years; where the EL is granted for a period of less than five years a right of renewal may be included in the licence terms but the aggregate term cannot exceed five years (s. 30A, MA). On expiry a new EL may be granted, applications for which must be submitted at least three months prior to the expiry of the existing EL (s. 30AB(1)-(2), MA).

 

  • Mineral Claim (MC): to obtain a mining right the holder of an EL must first register a MC, which grants an exclusive right to prospect and explore for minerals on the land and to apply for a Mining Lease or a Retention Lease over the area (s. 25(1), MA). Within 14 days of pegging (see section 21, MA & r. 12, MR) an application must be made to the Mining Registrar, accompanied by the application fee (ss. 21(6)-(7) & 21(10), MA; see also r. 13(2), MR). The area of the MC must not exceed 250 hectares, unless otherwise approved by the Minister (s. 23, MA and r. 10, MR). Applications may only be rejected on limited grounds (s. 24(2) & (4), MA). MCs are issued for 12 months; where an application for a Mining Lease or a Retention Lease is not submitted within the 12-month period, or the application is rejected, the MC shall lapse (s. 26(2), MA). Where a MC lapses, the holder shall be prohibited from making a new claim over the area for a period of two years, unless an authorisation is obtained from the Minister or Warden’s Court (s. 27, MA).

 

  • Retention Lease (RL): an RL may be granted to the holder of an MC where the Minister is of the opinion that: the applicant is justified in not proceeding immediately with mining operations; sufficient investigation has not been carried out to determine the terms and conditions of a Mining Lease; or, in the case of radioactive minerals, the application should be deferred (s. 41A(2), MA). An RL confers on the holder the exclusive right to apply for a Mining Lease; RL holders also have the right to carry out prospecting activities and, where specified in the licence, mining operations (s. 41F, MA). RLs are granted for an initial period of up to five years, renewable for a further period of up to five years (s. 41D(1)-(3), MA). Rental fees may apply (s. 41E(1), MA).

 

  • Mining Lease (ML): grants the holder the exclusive right to conduct mining operations and to sell, dispose, or use for commercial or industrial purposes, the minerals recovered (s. 39(1), MA). The Minister may grant a ML to the holder of a MC or RL (s. 34(1), MA). The application for an ML shall be accompanied by a mining proposal which must: detail the operations to be carried out; contain an assessment of the environmental impacts, as well as proposed mitigation measures; include information on criteria to measure environmental outcomes; and provide details of any consultations undertaken in relation to mining operations (s. 35(1), MA; see also r. 30, MR). Application fees apply (see Schedule 2, MR). MLs are granted for an initial period of up to 21 years, renewable for a further period of up to 21 years (s. 38(1)-(2), MA). MLs are granted subject to the terms and conditions of the MA and any other terms and conditions specified by the Minister (s. 34(4), MA).

 

Note that in respect of ELs, MLs and RLs the Minister may add, vary or revoke a term or condition of the mining tenement at any time, subject to the holder having the right to appeal the Minister’s decision to the Environment, Resources and Development Court (see s. 30(5)-(6), 34(9)-(11) & 41A(6)-(8), MA).

MCs are non transferable (s. 26(1), MA). Other mining tenements are transferable, in whole or in part, providing the written consent of the Minister is obtained (see r. 44 & 58, MR).

DEVELOPMENT CONSIDERATIONS

Mining operators must enter into agreements with landowners authorising entry to the land (s. 58(a), MA). Where agreement has not been reached a notice of entry must be given at least 21 days prior to access (s. 58A(1) & 58A(7), MA). Objections by landowners may be lodged with the court, which has the power to decide if operations should go ahead and / or the conditions of use (s. 58A(3), MA). Landowners may also be entitled to compensation (s. 61, MA). In certain circumstances, landowners may make applications to the Land and Valuation Court, which can issue orders transferring land to the mining tenement holder, subject to the payment of compensation (s. 62A, MA).

Holders of mining tenements must have a Program for Environment Protection and Rehabilitation (PEPR) in force before carrying out mining operations (s. 70B(1), MA). PEPR must be submitted to the Minister for approval, who may require alterations (s. 70B(5), MA). Proposed projects may also be submitted to the Minister for Planning for advice and, where the operations are thought to be of major social, economic or environmental importance, an Environmental Impact Statement (EIS) may be required (see s. 160, PDIA). For further details see ‘Environmental Overview Commentary’.

The MA contains specific provisions in relation to mining activities on native title land (see Part 9B, MA). Mining tenements may not be granted over native title land unless: the mining operations are authorised by an agreement or determination in terms of Part 9B; an indigenous land use agreement registered under the Native Title Act 1993 provides that the statutory rights to negotiate are not intended to apply in relation to the mining operations; or a declaration is made to the effect that the land is not subject to native title (s. 63H, MA).

The government is entitled to a royalty based on specific percentages of gross sales (s. 17, MA); a reduced royalty for new mines may be determined (s. 17A, MA).

The Statutes Amendment (Leading Practice in Mining) Bill 2017 was released to the public in October and will be debated in the Parliament of South Australia over the next two years. The Bill proposes to amend the MA as well as the OMA and the MWIA.

ENVIRONMENTAL REGULATION

See South Australia - Environmental Overview Commentary.

Submit A Revision

If you would like to submit a revision or correction to this commentary click here.

Environmental Overview Commentary plus sign

SOUTH AUSTRALIA - ENVIRONMENTAL REGULATIONS

GENERAL

Australia, officially the Commonwealth of Australia, is the world’s sixth largest country by area. Spanning over 7.5 million km2, the country is comprised of six states: New South Wales, Queensland, South Australia, Tasmania, Victoria and Western Australia, and ten territories, two of which (Australian Capital Territory and the Northern Territory) are located on the mainland. Australia is recognised as a mega-diverse country in spite of the fact that around 70% of the country is reportedly arid or semi-arid.

South Australia is located in the south-central part of the country and is bordered by Western Australia, the Northern Territory, Queensland, New South Wales, Victoria and the Indian Ocean. With a population of approximately 1.721 million, South Australia is the fifth largest state by population (Australian Bureau of Statistics); around 75% of the population reside in the capital city, Adelaide. South Australia has an area of 983,482 km², which constitutes 12.7% of the country and makes it the fourth largest state or territory by geographic area (Australian Government).

South Australia is predominately flat, arid to semi-arid land, though low mountain ranges can be found in the north-west and south-east of the state. The state’s southern coastline on the Indian Ocean is home to the Great Australian Bight, characterised by large cliffs which run along the coast up to the border with Western Australia. Several vast salt lakes, including Australia’s largest – Lake Eyre, are found across South Australia’s remote plains. The Murray River, Australia’s longest, runs from New South Wales into Victoria before reaching South Australia, where it eventually meets the Indian Ocean. The southern part of South Australia enjoys a Mediterranean climate, which gives way to a desert climate in the state’s interior regions.

South Australia is home to a wide variety of animal and plant species. Acacia species, cypress pines, beefwood, bluebush, saltbush and porcupine grass are common in the arid or semi-arid regions (Encyclopaedia Britannica). In terms of fauna some 482 bird and 190 mammal species have been recorded in the state since European settlement, as have numerous species of amphibians, fish, and reptiles (Department of Environment, Water and Natural Resources). Notable amongst them are the various marsupial species (such as kangaroos, the southern hairy-nosed wombat, brush-tailed possums, and wallabies), echidnas, and some of the world’s most venomous snakes, such as the inland taipan, eastern brown snake and the death adder.

South Australia faces several environmental challenges including concerns around the state’s water quantity and quality, the impacts of climate change and population growth (Environment Protection Authority).

PRINCIPAL LEGISLATION AND REGULATOR

In Australia, environmental protection is largely the responsibility of the state governments. In South Australia, the environmental assessment (EA) process for mining operations is primarily regulated by the Mining Act 1971 (MA); the Mining Regulations 2011 (MR); the Planning, Development and Infrastructure Act 2016 (PDIA); and the Development Regulations 2008 (DR). The Environment Protection Act 1993 (EPA) and the Environment Protection Regulations 2009 (EPR) may also be applicable to certain mining activities. Other relevant legislation includes: the Environment Protection and Biodiversity Conservation Act 1999 (EPBCA); the Natural Resources Management Act 2004; the National Parks and Wildlife Act 1972; the Native Vegetation Act 1991 and the River Murray Act 2003. Also of relevance are the various government guidelines, which provide additional direction on several aspects of the EA process.

The Mineral Resources Division (MRD) administers the MA and manages the EA process in respect of mining operations. The Minister for Mineral Resources and Energy (Minister) is responsible for approving Programs for Environment Protection and Rehabilitation, known as PEPRs, which form a key aspect of EAs (s. 70B(5), MA). The Minister for Planning is responsible for the administration of the PDIA and offers advice to the MRD in relation to environmental assessment matters.

Federal legislation may also apply to projects which have a significant impact on areas of national environmental significance. Such operations must be assessed and approved by the Commonwealth Environment Minister and an EA may be required. Pursuant to section 45 of the EPBCA, South Australia and the Commonwealth of Australia have entered into a bilateral agreement, with the aim of providing an efficient system and avoiding duplication in the EA process.

EIA PROCESS

An application for a Mining Lease (ML) must be accompanied by a mining proposal that sets out an assessment of the environmental impacts of the proposed mining operations; an outline of the measures that the applicant proposes to take to manage, limit or remedy such impacts; and a statement of the environmental outcomes that are expected to occur (s. 35(1), MA; see also: r. 30(1), MR and MG2a - Preparation of a Mining Proposal and Management Plan for Metallic and Industrial Minerals in South Australia). The application must also be accompanied by a draft statement detailing the criteria to be adopted to measure expected environmental outcomes (s. 35(1), MA). Consultations will be held with the public and other relevant parties as part of the application process; such consultations are not specific to environmental issues but to the granting of the ML more generally (see s. 35A, MA). In determining the terms and conditions to which a ML shall be subject, the Minister shall give consideration to the protection of any aspect of the environment that may affected by activities under the lease (s. 34(6)(a), MA).

Holders of mining tenements, including Exploration Licences and ML, may not carry out mining operations unless a compliant PEPR is in force (s. 70B(1), MA). In the case of MLs the PEPR must be provided within 12 months of the granting of the lease (r. 65(10), MR). PEPRs must be submitted to the Minister for approval and must contain the prescribed information, including specifics of the proposed mining operations, information on the expected environmental outcomes (accompanied by details of the steps to manage, limit or remedy adverse environmental impacts), and the criteria to measure such outcomes (see s. 70B(2) - (4), MA and r. 65, MR). Information on consultations carried out in connection with the proposed operations, concerns which arose as a result of such consultations and measures taken to address them must also be included (r. 65(1)(c), MR). More extensive content requirements apply when the PEPR relates to activities under a ML (see r. 65(2), MR). (For detailed guidance see MG2b - Preparation of a PEPR for Metallic and Industrial Minerals in South Australia and MG8 - Preparation of a PEPR for Low Impact Mineral Exploration in South Australia).

The Minister may approve the PEPR without alteration, or may require alterations following consultation with the tenement holder (s. 70B(5), MA). The tenement holder may apply to the Environment Resources and Development Court (within 28 days) to request a review of the Minister’s decision to require alterations (s. 70B(6)-(7), MA). The MA does not appear to grant the Minister a right to refuse a PEPR – only to require alterations. Approved PEPRs may be reviewed by the holder or at the direction of the Minister (s. 70C(1)-(2), MA). As a matter of policy, a review and update of a PEPR will generally be required at least every seven years; in certain circumstances an earlier review will be requested, including if there has been a change of operator or lease owner in the event of a mining tenement transfer (see MG1 - Guidelines for Miners Mining Approval Processes in South Australia). Reviews must be carried out within three months (r. 68, MR). At the request of the Minister, environmental outcomes may also be audited (r. 67, MR).

The Minister may refer an application for a mining tenement to the Minister for Planning for advice (s. 160(2), PDIA); activities in certain areas must be referred to the Minister for Planning for advice as mandatory under the terms of the DR (which remain in force in spite of the fact the Development Act 1993 has been replaced by the PDIA) (see r. 84(1), DR). If the Minister for Planning or the MRD are of the opinion that operations conducted in pursuance of a mining production tenement are of major social, economic or environmental importance, the need for an Environmental Impact Statement (EIS) and an Assessment Report may be determined (s. 160(4), PDIA). The MRD may also, with the support of the Minister for Planning, require that proposed developments associated with mining operations be considered under the same assessment process (s. 160(7), PDIA). The EIS process is detailed under section 113, PDIA. All EIS must include a statement of the expected environmental, social and economic effects of the development and must be prepared in accordance with a practice direction (s. 113 (1)-(4), PDIA). Consultations will be carried out as part of the EIS process and the project proponent must prepare written responses to matters raised by the Minister for Planning as a result of such consultations (s. 113(5), PDIA). After consultations have been completed, the State Planning Commission will prepare an Assessment Report (s. 113(9)-(10), PDIA).

Following the submission and consideration of the EIS and accompanying Assessment Report or, where an EIS has not been completed, a report from the MRD submitted in connection with a request for advice, the Minister for Planning shall advise the MRD on the necessary steps to be taken, including whether or not the mining production tenement should be granted and any environmental conditions which should apply (s. 160(5), PDIA). If the MRD does not agree with the advice of the Minister for Planning the matter must be referred to the Governor (s. 160(6), PDIA).

Certain activities specified under Schedule 1 of the EPA, which are not regulated under the terms of the MA, may require an Environmental Authorisation. Applications for Environmental Authorisations must be made to the EPA Authority (s. 38(1), EPA). The EPA Authority has indicated that it will accept the PEPR as the supporting document for such applications (see MG1 - Guidelines for Miners Mining Approval Processes in South Australia).

In relation to rehabilitation, the Minister may require the holder of a mining tenement to enter into a bond that satisfies the obligations to rehabilitate land disturbed by mining operations (s. 62, MA).

Submit A Revision

If you would like to submit a revision or correction to this commentary click here.

Technical Documents plus sign

Please subscribe to read this content.