The simplified application process for mineral
development licences and/or mining leases is retained and multiple
mining proponents will be permitted.
As many will now be aware, the Queensland Government has
recently announced its intention to sell bauxite leases in the
Aurukun community area in Cape York, far north Queensland. In order
to facilitate this, the Minister for Natural Resources and Mines
has introduced the Mining and Other Legislation Amendment Bill to
the Queensland Parliament, noting the following:
"On 16 September 2012 the Newman LNP Government announced
its plan for the development of the Aurukun bauxite resource in Far
North Queensland... The amendments to the Mineral Resources Act
will make it clear the process for the cancellation of a mineral
development licence and a mining lease and also ensure that the
state is able to enter into arrangements with one or multiple
Aurukun bauxite proponents at the end of the tender
A key concession by the Government is that it will not force
successful proponents to build an alumina refinery as a condition
of being granted a mining lease.
In 1975 an agreement was entered into between the Queensland
Government, Tipperary Corporation, Billiton Aluminium Australia BV
and French company Aluminium Pechiney Holdings Limited (later
acquired by Alcan) in respect of the Aurukun area. The agreement
was given the force of law via the Aurukun Associates Agreement Act
1975 (Qld) and a special bauxite mining lease was granted. The
agreement required construction of an alumina refinery by 31
December 1983. This was not achieved and subsequently the mining
lease was cancelled by the Queensland Government and the Aurukun
Associates Agreement Act 1975 (Qld) was repealed.
The Aluminium Corporation of China (Chalco) was
awarded preferred developer status to mine bauxite deposits in
2007, on the condition that it construct a $2.2 billion alumina
refinery at Abbot Point near Bowen. Chalco's difficulty in
complying with the requirement to construct the refinery, combined
with a poor economic environment for aluminium, resulted in Chalco
surrendering its permit in 2011.
The Queensland Government is now attempting to generate another
round of interest in Aurukun, however it has dispensed with the
requirement that the proponent construct an alumina refinery.
Proposed amendments to the Mineral Resources Act
The Mining and Other Legislation Amendment Bill 2012 proposes
some further, relatively subtle, amendments to those made to the
MRA in 2006, in order to open up the Aurukun area to multiple
proponents and demonstrate the Queensland Government's
commitment to this new sale process.
While the simplified application process for mineral development
licences and/or mining leases is retained, the proposed amendments
will allow for multiple mining proponents, rather
than one "preferred developer" only, in the Aurukun
Sections 231B and 318AAB of the MRA will also provide that a
mineral development licence / mining lease granted in respect of an
Aurukun project may be cancelled, in addition to the normal
cancellation provisions under the MRA (ie. in respect of a mineral
development licence / mining lease generally), where a relevant
Aurukun agreement has been terminated.
The Dictionary in Schedule 2 of the MRA is also to be amended to
account for these subtle changes.
Expressions of interest
The Queensland Government has opened up
an expression of interest process until 15 February 2013. It is
proposed that a short-list of up to five companies will be
requested to provide a detailed proposal, with final proponent(s)
being selected by the end of 2013.
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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