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  • 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
60
0
100
Score: 60
Moderate Risk
The regulatory risk rating for Western Australia may surprise many of those in the industry. Whilst the mining regime is a sophisticated one with map and ground staking, extensive provisions concerning surface rights and private owner conflicts, work expenditure obligations, filing requirements and retention licences, it is also quite a complicated regime that shows its age through patchy revisions that lack elegantly drafted overhauls. Ministerial discretion has a significant impact on the level of risk and the complications of the regime create difficulties for the uninformed and work for the legal advisor.

Corruption Potential Index

Score: 65
Low Corruption Potential

Corruption Risk Index

Score: 95
Very Low Corruption Risk

Regulatory Risk Rating

subject review score
1st Come / 1st Serve The principle operates under the terms of Section 105A of the Mining Act 1978 (MA) which states that the applicant who first complies with the application requirements has the right in priority over every other applicant (s. 105A, MA). The application of the principle is undermined both by the subjective assessment of the application and the extremely broad discretion afforded to the Minister to refuse applications under Section 111A, MA.
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Application Critiera Exploration Licences are granted at the discretion of the Minister, with Section 57, MA stating that the Minister "may" grant a licence on such terms and conditions as may be determined (s. 57, MA). The application must meet the terms of Sections 57 & 58, MA, including requirements to submit a work programme, detail the estimated amount of money to be expended on exploration and submit details of the technical and financial resources available to the applicant (s. 58(1), MA). A recommendation from the mining registrar or warden, who must be “…satisfied that the applicant is able to effectively explore the land…”, is required before the granting of the Exploration Licence (see ss. 57(1)-(3) & 59, MA). Objections can be made to the granting of a licence (s. 59(1), MA). In addition, under Section 111A, MA the Minister has a broad right to refuse or terminate an application is satisfied on reasonable grounds in the public interest that the land should not be disturbed or the application should not be granted (s. 111A, MA). (For details on Prospecting Licence terms – see the Mining Commentary below).
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Duration An Exploration Licence is granted for a period of 5 years, with the possibility of extension for an additional term of 5 years and, subsequently, a further period of 2 years (s. 61(1)-(2), MA). (Note that Prospecting Licences are granted for an initial term of 4 years, renewable for a further 4-year period and a third 4-year period if retention status is held (s. 45(1), MA).
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Right to Renew Renewal is at the discretion of the Minister and shall only be granted if the Minister is satisfied that a prescribed ground for extension exists (s. 61, MA (see also s. 45(1a), MA in relation to Prospecting Licences)). Grounds for extension are provided under Section 23AB of the Mining Regulations 1981 (MR) and include: where work carried out under the licence justifies further exploration; by reasons of difficulties or delays; and where the Minister considers that the land has been sufficiently unworkable. The application must be lodged during the final term of the licence and must be accompanied by the prescribed rent and information in support of the proposed grounds for extension (s. 23A, MR). Land shedding requirements may apply under the terms of Section 65, MA; the holder of an Exploration Licence for more than 10 blocks must surrender 40% of the blocks or the nearest whole number of blocks (s. 65(3), MA).
1
Competing Licences An applicant for a Prospecting Licence or an Exploration Licence cannot overstake another person’s mining tenement (ss. 43(1) & 57(2e), MA); however, certain exceptions do exist. The legislation confers upon the holder(s) of a Miner’s Right the ability to apply for a permit over an existing Exploration Licence on Crown Land or conservation land (s. 40E, MA) but the use is limited and designed to facilitate metal detector and other small-scale exploration activities not in competition with miners (s. 40E(6), MA). A special regime also exists for artisanal gold rights for natural persons (ss. 56A, 70 and 85B, MA). In addition Miscellaneous Licences may be granted over land which is already subject to a mining tenement (s. 91(7)-(8), MA). Such licences are granted for specific purposes, as defined under Section, 42B of the MR. We believe that none of the foregoing detract materially from the exclusivity of the main licencing regime.
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Mineral Coverage An Exploration Licence is not mineral specific (s. 61(2), MA), however the Minister has a broad right to grant the licence on such terms and conditions as may be determined (s. 57(1), MA) – we assume this could allow for a restriction on minerals covered. Notably, Section 110 gives the Minister a public interest discretion to make a Mining Lease mineral specific (s. 110, MA).
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Right to Mine The Minister may grant any person a Mining Lease for land that is not already subject to a mining tenement (ss. 71 & 76, MA). A holder of a Prospecting Licence or Exploration Licence has priority for a Mining Lease and Section75(7) stating that the Minister “shall” grant a Mining Lease to a Prospecting or Exploration Licence holder, subject to the other provisions of the MA (see ss. 49, 67 & 75, MA). A Mining Lease confers on the holder an exclusive right to mine the land subject to the lease (s. 85(3), MA), though as noted above the Minister does have an ability to restrict the lease to certain minerals (s. 110, MA) and an exception applies for applications for Special Prospecting Licences for gold (s. 85B). However, as with the Exploration Licence, the Minister has a broad discretion under Section 111A to terminate or refuse applications for mining tenements if satisfied “on reasonable grounds in the public interest” that the land should not disturbed or the application should not be granted. The wording here is sufficiently vague and, as result, the power of the Minister sufficiently far-reaching as to introduce a considerable risk to the right to mine. It is therefore possible that the holder of an EL could see an application for a mining lease terminated or refused on whatever grounds the Minister can justify under the broad criteria of Section 111A. It is this level of Ministerial discretion that results in a high risk rating in this category. 1
Criteria for Mining Rights For the most part, the criteria for a Mining Lease are objective, though the Minister has significant discretion on grant (s. 71, MA). Along with the prescribed rent and fees, the application must be accompanied by a mining proposal or a statement on mining operations and a mineralisation report prepared by a qualified person (s. 74(1) & (1a), MA). A recommendation from the mining registrar or warden will be made to the Minister (s. 71A). The mining registrar shall recommend the grant of the Mining Lease if satisfied that the applicant has complied with the provisions of the MA (s. 75(3), MA). The Minister shall refuse to grant a Mining Lease if the mineralisation report states that there is no significant mineralisation in the area to which the application relates (s. 75(8), MA). 3
Tenure A Mining Lease is granted for a period of 21 years and may be renewed, as of right, for a further term of 21 years (s. 78(1), MA). The Minister also has the right to renew or further renew a Mining Lease for successive terms upon receipt of an application, providing no term is longer than 21 years (s. 78(2), MA). (See section 29, MR for application requirements). 3
Surface Rights Consent from landowners is required for access or the grant of mining tenements over land used for agricultural purposes or any of the other purposes listed under s. 29(2)(a)-(f), MA (see s. 29, MA). Extensive compensation terms are provided. In the first instance, compensation is to be agreed between the landowner / occupier; where agreement cannot be reached a decision on compensation will be made by the Warden’s Court (s. 123(3), MA). Section 123(4), MA contemplates entitlement to compensation for landowners / occupiers for a wide range of matters including social disruption and loss of earnings. Compensation may also extend to neighbouring landowners / occupiers and those in the “vicinity” of the land (s. 123(5), MA). Compensation must be paid prior to the commencement of operations (s. 35, MA). In certain cases, land may also be expropriated for mining purposes. The land access and use rules are comprehensive and well thought through in relation to balancing competing land users, including private land owners, as evidenced in several provisions (see ss. 20-22, 29-39 and 123(2), MA). 3
Government Take Royalties are payable under the terms of the Table contained in Section 86, MR. The rate of royalty depends on the form in which a mineral is sold and separate rates are applicable for ores, concentrates and final form products (see Table, MR). The specific rate of royalty may be calculated in terms of either the amount per tonne according to quantity produced (this method is generally applicable to industrial and construction minerals), as a percentage of the royalty value of the mineral produced (which ranges between 2.5 to 7.5%), or at a specified rate (see Columns 1-3, Table, Section 86, MR). Royalties in respect of gold are calculated separately, with rates varying between 1.25% and 2.5% of the royalty value of the gold produced depending on when the gold was mined, subject to the first 2,500 ounces produced during each financial year being exempt (see s. 86AA, MR). The holder of a mining tenement must also pay the prescribed rent (s. 108, MA and see Schedule 2, MR). Separate royalties may also be determined under a state agreement act which is made between the Government of Western Australia and the developer of a major resource project in the State. The royalty regime is complicated by it being a gross royalty with areas for potential uncertainty; nevertheless, the range for disputes is not great. 3
Transfer Rights The prior written consent of the Minister (or authorised Department) is required before a Mining Lease may be transferred (s. 82(1)(d), MA). Tenements may be transferred in accordance with Section 75, MR. The right to transfer may be conditional upon any requirements or conditions set by the Minister when granting the ML (s. 71, MA).
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Change of Control Changes of control are not regulated. A tenement holder may authorise activity by a third party which is authorised under the tenement (s. 118A, MA). A mining tenement may be sold and mortgaged (ss. 119, 119A, MA).
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EIA Process The EIA process is set out in very clear terms in the Environmental Protection Act (EPA), which takes precedence over the MA (s. 6(1)). Under the EPA, significant proposals, i.e. those which are likely to have a significant effect on the environment, may be referred to the Environmental Authority for review. The Minister has very wide powers of discretion as to the form, content, timing and procedure of any EIA but will usually follow the EIA Administrative Procedures 2012 (s. 40, EPA). A right to appeal is provided for under Part VII, EPA. 3
Power to Revoke According to Section 97, MA a mining tenement may be revoked by the Minister where there is a breach of a covenant to pay rent or royalty or for a breach of a covenant included in the lease under s. 82. Alternative fines may apply in place of forfeiture at the discretion of the Minister (s. 97(5), MA). As the conditions to which a mining tenement may be subject are known at the time of grant and, on a reading of the relevant terms under s. 82, reasonable and clear, an adequate score is awarded. Were the fines under s. 97(5) a guaranteed alternative in replace of forfeiture of title rather than exercised at the discretion of the Minister, the full award would have been given. (see ss. 97 and 82, MA; see also s. 84A(2) and 115B(2), MA). 3
Age of Legislation 1978, however substantive amendments were made to the MA in 2012. 9
Other Factors The legislation comes across as a patchwork of legislative revisions; the numerous forms of licences and differing means of acquisition (ground vs. map staking) create needless complication in its administration; no doubt a move to a more simplified system involving fewer licencing options and the avoidance of certain details better left in regulations would aid its rating; nevertheless, the legislation doesn't contain other additional provisions that provide serious challenge to the developer or issues which have not been addressed elsewhere in the analysis. 10
Total The regulatory risk rating for Western Australia may surprise many of those in the industry. Whilst the mining regime is a sophisticated one with map and ground staking, extensive provisions concerning surface rights and private owner conflicts, work expenditure obligations, filing requirements and retention licences, it is also quite a complicated regime that shows its age through patchy revisions that lack elegantly drafted overhauls. Ministerial discretion has a significant impact on the level of risk and the complications of the regime create difficulties for the uninformed and work for the legal advisor. 60
Close report

Environmental Overview Commentary plus sign

AUSTRALIA ENVIRONMENTAL COMMENTARY- WESTERN AUSTRALIA

GENERAL

Australia, officially the Commonwealth of Australia, is the world’s sixth largest country by area. Spanning over 7.5 million square kilometres, 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 megadiverse country in spite of the fact that around 70% of the country is reportedly arid or semi-arid.

Western Australia is Australia’s largest state by area, covering around 33% of the country and occupying the entire western third of the Australian mainland. Western Australia has an incredibly diverse landscape encompassing Australia’s largest expanse of outback, over 12,000 km of coastline and, to the southwest, areas of forest and shrublands, where many unique species of flora and fauna can be found. The majority of the state’s population lives in the state capital, Perth, with only around 20% located outside the city and its surrounding areas. Western Australia’s climate varies across the state; the central outback area of the region is hot and very dry, with little rainfall, in the north of the state a tropical climate can be found and monsoons can occur during the wet season, while the southwest coastal areas have a Mediterranean style climate, with hot, dry summers and mild but often wet winters.

The state has an array of flora and fauna and many species found there are endemic to the area. The forest areas are home to several endemic tree species and wildflowers, while the state itself hosts 141 mammal species, 25 of which are unique to Western Australia; over 430 species of reptile; and over 450 bird species. The waters of Western Australia also have an abundance of wildlife and coral reefs and include World Heritage site, Shark Bay. Dolphins, reef sharks, manta rays and whale sharks can be found off the coast, with fish species totalling over 1,500. The state has established multiple national parks in order to conserve and protect this wealth of biodiversity.

Climate change, oil spills and overpopulation are some of the environmental challenges faced by the state.

PRINCIPAL LEGISLATION AND REGULATOR

The principal environmental legislation in Western Australia is the Environmental Protection Act 1986 (EP Act) and its subsequent regulations, the Environmental Protection Regulations 1987 (EP Regulations). The EP Act aims to prevent, control and abate pollution and environmental harm and conserve, preserve, protect and enhance the environment.

The Mining Act 1978 is read and construed subject to the EP Act, with the latter taking precedence over the former in cases where provisions are inconsistent (s. 6 Mining Act).

Other important documentation includes the Environmental Impact Assessment Administrative Procedures 2012 (EIA Procedures), which provide further guidance and clarification on the EIA process contained within the EP Act.

The Environmental Protection Authority (EPA) is an independent body jointly responsible for the administration of the EP Act, along with the Minister for Environment (Minister). The EPA is responsible for conducting environmental impact assessments (EIA); preparing policies for environmental protection; preparing and publishing guidelines for managing environmental impacts; and providing advice to the Minister. The Minister has the ultimate power to approve or reject proposals submitted under the EP Act and is responsible for handling appeals against decisions of the EPA, amongst other things. In addition, the Office of the Environmental Protection Office (OEPA) was created in 2009 with the purpose of supporting the EPA in conducting EIA and monitoring compliance with Ministerial conditions related to approvals, as well as assisting the EPA in relation to policy development. Unlike the EPA the OEPA is accountable to the Minister, as well as the EPA itself.

EIA PROCESS

The EPA has a memorandum of understanding (MOU) with the Department of Mines and Petroleum (DMP), which provides for the referral by the DMP of all environmentally significant mineral, petroleum and geothermal proposals to the EPA. Schedule 1 of the MOU outlines the criteria for referral of onshore mineral proposals and includes a significance test, as well as a table for proposals that concern certain areas of land and the relevant actions to be taken.

According to section 74 of the Mining Act an application for a mining lease must be accompanied by a mining proposal or a statement and mineralisation report in the prescribed form. In the case of the latter, according to s. 6(1a) of the Mining Act, only the applicant can refer a proposal to the EPA and section 38(5) of the EP Act does not apply. In all other cases, and according to the terms of the MOU and s. 38(5) of the EP Act, the DMP, as a decision-making authority, must submit to the EPA any proposal that appears to be a significant proposal or a proposal of a prescribed class. The applicant for the mining lease may also submit such proposal directly to the EPA under s. 38(1). Proposals are defined under the EP Act as any project, plan, programme, policy, operation, undertaking or development or change in land use, or amendment of the foregoing. Upon receipt of a proposal the EPA must decide, generally within 28 days unless further information is required, whether the proposal should be assessed or not; written notice of its decision shall be given to the proponent, the individual who submitted the proposal and the relevant decision-making authority. According to the EIA Procedures, the EPA, in reaching its decision, may have regard to certain factors including the values, sensitivity and quality of the environment which is likely to be impacted; the extent of the likely impacts; the consequence of the likely impacts; the resilience of the environment to cope with the impacts; and public concern about the likely effect of the proposal (See s. 7, EIA Procedures).

If the EPA decides that a proposal should be assessed it must determine a level of assessment. There are two possible levels of assessment outlined by the EIA Procedures Assessment on Proponent Information (API), which if further divided into API Category A and API Category B, or Public Environmental Review (PER). In broad terms the API level of assessment will be used in cases where the environmental acceptability or unacceptability is apparent at the referral stage, while the PER level of assessment will be used in cases where one of the following criteria is met: the proposal is of regional and/or state-wide significance; the proposal has several key environmental factors or issues, some which are complex or of a strategic nature; substantial and detailed assessment of the proposal is required to determine whether, and if so how, the environmental issues could be managed; or the level of public concern about the likely effect of the proposal, if implemented, on the environment, warrants a public review period. The criteria, assessment procedure and information requirements for the different levels of assessment are detailed in full under section 10 of the EIA Procedures.

During the assessment of the proposal a proponent can make a change to the proposal if the consent of the EPA is obtained and the EPA has determined that the change is unlikely to significantly increase any potential impact on the environment (s. 43A). Assessments by the EPA can be terminated if the proponent agrees or if the proponent fails to comply with the requirements of the EPA within a reasonable period (as determined by the EPA).

According to section 15 of the EIA Procedures, the EPA may consider a range of sources in assessing the proposal including information from the referral form; API scoping guideline, ESD, API document or PER document; reports from a public inquiry; advice from government agencies; expert advice; and the proponent’s proposed mitigation measures. Upon completion of the assessment the EPA will prepare an assessment report for the Minister (s. 44(1) EP Act). The assessment report must set out what the EPA considers to be the key environmental factors as identified by the assessment and the recommendations of the EPA in relation to whether or not the proposal should be implemented and any conditions and procedures it should be subject to if it is implemented (s. 44(2)). The EPA must provide the assessment report within six weeks of completion of the assessment of the proposal (s. 44(2b)); alternatively the Minister can request the assessment report within a specified period or before a specified date (s. 44(2c)). The Minister shall publish a copy of the report and provide copies to any other minister who may be concerned with the outcome; any decision-making authority related to the proposal; and to the proponent or person who referred the proposal, where required. The Minister shall then make a final decision on the proposal and, in doing so, must consult with all relevant decision-making authorities and other ministers. If agreement cannot be reached the Minister must refer the matter to the Governor (in cases where disagreement is between government ministers) or an appeals committee as appointed by the Minister (in cases where disagreement is between the Minister and a decision-making authority). If the Minister decides the proposal can be implemented, whether subject to certain conditions or not, he is required to provide a statement setting out the implementation agreement or decision to the EPA; the relevant decision-making authorities; the proponent of the proposal; and the person who referred the proposal; the statement must also be published (see s. 45(5)). Following the publication of the statement, once the Minister is satisfied that there is no reason why a proposal should not be implemented, the Minister shall communicate, in writing, his approval of the implementation of the proposal to the relevant decision-making authority (s. 45(7)). If the Minister decides to reject the proposal the relevant parties shall also be notified (s. 45(8)).

Pursuant to section 41 EP Act, decision-making authorities are prohibited from making any decision that could have the effect of causing or allowing the proposal to be implemented (e.g. granting a mining lease) until informed by the EPA that the proposal shall not be assessed or until the authority receives written notification from the Minister that permits the implementation of the proposal. In addition, under s. 41A, any person who takes action to implement a proposal without the proposal having first been approved commits an offence under the EP Act.

Conditions relating to the implementation of a proposal can be changed under section 46, EP Act.

Decisions of the EPA in relation to the assessment report and its recommendations on proposals can be appealed under section 100 of the EP Act. Appeals must be lodged within 14 days of the publication of the relevant material and communicated in writing to the Minister. The Minister will then direct the EPA accordingly based on his decision. The Minister’s decision is final in relation to appeals against decisions of the EPA. Only the proponent of the proposal may appeal the conditions relating to implementation, as set by the Minister; appeals are still made to the Minister but an appeals committee will be established to handle the appeal and the decision of the committee is final. The actual approval of a proposal cannot be challenged.

Federal environmental legislation may apply to projects which have a significant impact on an area of national environmental significance as prescribed by the Environment Protection and Biodiversity Conservation Act 1999, which is Australia’s primary federal environmental protection legislation; such projects will require an environmental assessment and the approval of the Commonwealth Minister for the Environment before they can proceed.

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Mining Overview Commentary plus sign

AUSTRALIA MINING COMMENTARY- WESTERN AUSTRALIA

GENERAL

Australia, officially the Commonwealth of Australia, is an island country located in Oceania and bordered by the Indian and Pacific oceans. According to statistics from the World Bank and International Monetary Fund, Australia has the 12th largest economy in the world and the 4th largest in Asia based on GDP. Mining is a significant part of the Australian economy and a key industry in the country, contributing around 7% of GDP, with mineral exports accounting for over 50% of Australia’s total goods and services exports.

Western Australia is the largest of Australia’s six states by area but the 4th largest in terms of population and economy, contributing around 16% of Australia’s GDP in 2013-14. The mining and petroleum industry dominates Western Australia’s economy and, according to government statistics, the state accounts for 58% of the country’s total mineral exploration expenditure. Mineral and petroleum exports make up around 89% of the state’s total merchandise exports, with China a primary trading partner.

The strength of the mining industry in Western Australia highlights the wealth of mineral resources in the state, with iron ore, gold, alumina and nickel primary commodities. Other minerals resources include copper, lead, zinc, salt, uranium and diamonds. Iron ore remains the state’s most valuable export, earning over $56 billion in mineral sales in 2012-13; over 95% of Australia’s iron ore deposits are found in Western Australia.

Western Australia is ranked 10th out of the 122 jurisdictions surveyed by the Fraser Institute in its 2014 Policy Perceptions Index, making it the highest ranked state in Australia.

PRINCIPAL LEGISLATION AND REGULATOR

The principal legislation for the mining industry in Western Australia is the Mining Act 1978 (Act) and the Mining Regulations 1981 (Regulations); also relevant are the Mining Amendment Act 2004 and the Mining Amendment Act 2012. Western Australia also uses State Agreements in relation to its resource sector; State Agreements are legal contracts made between the government of Western Australia and project proponents, which are used in relation to major resource projects and specify the rights, obligations, terms and conditions for the project, as well as providing a framework for ongoing relations and cooperation between the state and the project proponents. These agreements are a way for project proponents to bypass certain elements of mining legislation. Agreements are ratified by Acts of the Western Australian parliament and, according to state records, there are currently over 60 of these agreements in place including, BHP Billiton (Termination of Agreements) Agreement Act 2006; Alumina Refinery (Pinjarra) Agreement Act 1969; Wundowie Charcoal Iron Industry Sale Agreement Act 1974; and Diamond (Argyle Diamond Mines Joint Venture) Agreement Act 1981.

The Minister for Mines & Petroleum (Minister) is responsible for the administration of the Act (s. 10(1)). In addition, pursuant to section 11, the Department for Mines and Petroleum (DMP) is responsible for assisting the Minister with the administration of the Act. The DMP is also responsible for ensuring that the resource industry of Western Australia is developed and managed responsibly and sustainably, for the benefit of the state’s citizens. The Act also provides for the appointment of mining registrars (s. 11), who, along with the Minister and the DMP’s Director General of Mines (Director), may grant miner’s rights under the Act (s. 40(c)(1)). Under Part VIII of the Act Warden’s Courts are established, which have jurisdiction to hear and determine actions and disputes relating to mining tenements as specified in section 132(1). The powers of a Warden’s Court are further provided for under section 134 which vests in the courts the power to enforce contracts; determine compensation or damages; and make orders for the cessation or suspension of mining operations, amongst other things.

State Agreements are negotiated on a case-by-case basis and the Minister for State Development is responsible for advising proponents.

Mineral rights in Australia are vested in the Crown in right of the States, except for those on land which was granted before the Crown reserved mineral rights, but this latter point is not of particular relevance in Western Australia (s. 9).

GRANT AND FORMS OF MINERAL TITLE

Under the Act a dealing or interest will not have any legal effect unless formally registered in accordance with section 103(c).

The following types of mining leases and licences are provided for:

  • Prospecting Licence (PL): Grants the holder the exclusive access to carry out prospecting activities on an area no greater than 200 hectares (s. 40 and s. 48). Applications shall occur in the manner prescribed under section 41 and must be accompanied by the first year of rent; holders are permitted to possess multiple PL (s. 40(3)). PL are granted for a period of four years, extendable for a further four years if the Minister is satisfied a prescribed ground for extension exists and, if the PL has retention status, by a further period or periods of four years (s. 45). PL cannot be granted over land that is already subject to a mining tenement (s. 43(1)) and licences are always subject to the conditions listed in section 46, as well as further conditions if the Minister considers them necessary. PL are transferable and PL holders have priority for grant of mining leases for the duration of the licence (s. 49). Holders are required to comply with prescribed expenditure conditions; file reports of work and expenditure as required; and provide the Minister with geological samples as requested (s. 50-51A).

 

  • Exploration Licence (EL): Provides the holder with exclusive access to explore for minerals on an area no more than 70 blocks arranged in the prescribed manner, or 200 blocks if the land has been designated by the Minister under s. 57A(1). EL cannot be granted for land that is already the subject of a mining tenement. Applications must be made in the prescribed form and accompanied by the first year of rent (s. 58); applicants are required to state the technical and financial resources available for exploration activities. EL are granted for a period of 5 years, renewable for a further 5-year period and subsequent 2-year periods, if the Minister is satisfied that a prescribed ground for extension exists (s. 61); following renewal the surrender of 40% of the number of blocks (or the nearest whole number) for which the original EL applied will be required, generally on the 6th anniversary of the licence, under section 65. Persons may be granted more than one EL (s. 57(2g)). Holders are required to comply with expenditure conditions and certain other conditions relating to the licence (s. 63 and s. 63A). EL shall not be transferred, in whole or in part, during the first year unless certain conditions apply or express consent of the Minister is obtained (s. 64) but may be transferred subsequently. EL holders have priority for grant of mining leases for the duration of the licence (s. 67).

 

  • Mining Lease (ML): Grants the holder exclusive right to access the land, carry out mining operations and extract minerals. Persons may hold more than one ML (s. 72). ML cannot be granted on land which is already the subject of a mining tenement. Applications must be in the prescribed form and accompanied by a mining proposal or a statement and a prescribed mineralisation report (s. 74). Land surveys are required in relation to ML but miners do not need to carry out surveys prior to the granting of the licence (s. 80(1)). ML are granted for an initial period of 21 years, renewable for a further 21-year period subject to the conditions of the Act (s. 78(1)). All ML are subject to certain conditions including the conditions and covenants of section 82, which contains provisions for the payment of royalties and expenditure conditions. Under section 110 the Minister has the power to make a ML mineral specific. ML may be transferred.

 

  • Retention Licence (RL): Under the Act, certain EL and PL which were granted at specific times, and all ML holders have the option to apply for a RL in respect of whole or part of the land covered by the original licence. RL grant the holder the right to enter the land and carry out further exploration for minerals (s. 70J). Applications for RL must be made in the prescribed form and must include a statutory declaration that there is an identified mineral resource in the area and mining of that resource is impracticable due to one of the reasons prescribed in section 70C(2). RL are granted for a maximum 5-year period, renewable for a further 5-year period (s. 70E). Holders may be required to submit a programme of work and be subject to such conditions as defined in the Act or set by the Minister. RL may be transferred. RL holders shall have priority for grant of mining leases (s. 70L). In addition, at any time during the term of the RL the Minister can require the RL holder to show cause why a ML should not be applied for and, if cause is not provided or deemed insufficient, require a holder to apply for a ML within 60 days of notice (s. 70M).

All transfers of mining tenements must take place in accordance with s. 75 of the Regulations; mining tenements may also be sold and mortgaged (s. 119 and s. 199A). No mining tenement allows for the prospecting, exploration or mining of iron unless the Minister confirms such activity in writing (s. 111).

The Act also provides for several other types of licence. Special Prospecting Licences (SPL) provided for under section 56A are used for the prospecting of gold. SPL can only be granted to natural persons, allow only for the prospecting of gold, and may be granted on land that is already the subject of a mining tenement, although holders of a primary tenement have the opportunity to object to the granting of a SPL. Holders of a SPL can further apply for a mining lease for gold on the relevant area. General Purpose Leases are also provided for under the Act which allow holders to occupy areas of land, not exceeding 10 hectares, in order to carry out activities associated with mining operations (s. 87). Finally the Act also provides for Miscellaneous Leases, which may be obtained for activities expressly stated within the licence itself (s. 91).

DEVELOPMENT CONSIDERATIONS

In relation to private land, the written consent of the owner and occupier of the land is needed in order to obtain a mining tenement over certain categories of private land, including land used for agriculture (s. 29). This effectively grants private landowners a veto over developments, a matter of particular importance in the south west of the state, which is heavily farmed. Further, section 111A of the Act provides the Minister with a public interest discretion, granting him the authority to refuse or terminate applications for mining tenements. Permits may be obtained for persons wishing to enter private land to search for minerals or mark out mining tenements (s. 30). Permits cannot exceed a term of 30 days and holders must notify the occupier of the land in accordance with section 31 Act. Compensation must also be paid to the owner and occupier of the land and must be agreed before mining operations commence (s. 35). In cases where agreement cannot be reached the Warden’s Court has the power to determine compensation.

Mine closure plans, as defined under section 70(1) are required as part of the ML application process and must be reviewed at certain times (at least every 3 years unless otherwise approved) throughout the duration of the ML (s. 84AA). Rent must be paid under section 108 and royalties must be paid when minerals are obtained from a mining tenement, the rates for which are detailed in the Regulations (see s. 86 Regulations). Additionally, as discussed, mining tenements are issued with expenditure conditions and obligations and non-compliance may result in the forfeiting of the licence.

The Act is read and construed subject to the Environmental Protection Act 1986 (EP Act), with the latter taking precedence if provisions are inconsistent (s. 6 Act). The DMP has an agreement with the Environmental Protection Agency (EPA) which provides for the referral, to the EPA, of all ‘environmentally significant’ proposals. Proposals are reviewed by the EPA in order to determine if an assessment is required; there are two levels of assessment which may be used namely, Assessment on Proponent Information and Public Environmental Review. Following assessment a report will be prepared for consideration by the Minister who has the authority to decide whether the proposal may be implemented or not and whether any conditions will apply. Under the EP Act decision-making authorities, such as the DMP, are prohibited from making decisions which may allow the proposal to be implemented, until informed by the EPA or the Minister as to the status of the proposal (s. 41 EP Act).

Federal environmental legislation may apply to projects which have a significant impact on an area of national environmental significance as prescribed by the Environment Protection and Biodiversity Conservation Act 1999, which is Australia’s primary federal environmental protection legislation; such projects will require an environmental assessment and the approval of the Commonwealth Minister for the Environment before they can proceed.

Finally the Foreign Investment Review Board will be need to be notified in relation to certain investments by foreign persons in Western Australia, as prescribed by the Foreign Acquisitions and Takeovers Act 1975.

ENVIRONMENTAL REGULATION

See Western Australia Environmental Regulation.

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