Australia: Legislation to introduce competitive tendering for resource tenements in Queensland

Resources and Energy Alert: 20 December 2012
Last Updated: 22 December 2012
Article by Martin Klapper and Damian Roe

Following the declaration in January 2012 that a competitive tendering process would be introduced for coal tenements, a new Bill to formalise the process and which will see a similar process implemented for all remaining exploration tenements, was introduced in the Queensland Legislative Assembly on 29 November 2012.

The Mining and Other Legislation Amendment Bill 2012, if passed, will make a number of amendments to legislation affecting resources companies in relation to applications for exploration tenements and various other matters.

The Bill has been referred to the Agriculture, Resources and Environment Committee which has requested written submissions on the Bill by Monday 21 January 2013.

Here, Partner Martin Klapper and Senior Associate Damian Roe outline the purpose and key features of the Bill.

Key Points

The Bill aims to:

  1. introduce a competitive tender process for both exploration permits for coal and exploration permits for minerals;
  2. streamline the approvals process for small scale mining activity; and
  3. amend the definition of "occupier" in resources legislation to "remove a potential ambiguity" in the existing definition.

Competitive Tenders

On 13 January 2012, the Queensland Government declared Restricted Area 394 over the entire State to prohibit the submission of new applications for coal tenements only, while it implemented a competitive tender process in relation to applications for coal exploration permits.

The Mining and Other Legislation Amendment Bill 2012 (the Bill) now formalises this process under which the Minister may invite tenders for an exploration permit for coal and, in addition to the initial intention, this new Bill now introduces a similar process of competitive tenders for exploration tenements for all other minerals.

Whilst no restricted area has been declared for exploration permits for minerals, the Bill provides that the Minister may publish a gazette notice inviting tenders for an exploration permit for minerals for a declared area and such an invitation will prevent a person applying for an exploration permit for minerals over that area other than under the competitive tender process.

Competitive Tender Process

The Bill provides that the Minister may publish a gazette notice inviting tenders for an exploration permit for certain areas. That call for tenders may identify that the tender process involves a cash bid component for the purpose of deciding the preferred tenderer.

A response to the call for tenders must include a description of the proposed program of work for the exploration permit and, if the tender involves a cash bid component, the tenderer's cash bid. The Bill also provides that the Minister may use any process that the Minister considers appropriate to determine the preferred tenderer, including identifying a short list of possible preferred tenderers and inviting them to engage in an additional round of tendering before appointing a preferred tenderer.

Small Scale Mining Activities

The Bill also introduces a number of regulatory reforms designed to cut red tape for small scale mining activity. "Small scale mining activity" is defined to include mining activity that:

  1. is carried out under a mining claim, for corundum, gemstones or other precious stones the area of which is not more than 20 hectares;
  2. is carried out under an exploration permit for minerals the area of which is not more than 4 sub-blocks; or
  3. is carried out under a prospecting permit.

The Bill amends the Environmental Protection Act 1994, the Fossicking Act 1994 and the Mineral Resources Act 1989 to streamline the application process, exempt certain activities from the requirement to obtain an environmental authority and reduce the regulatory cost of conducting small scale mining activity.

Definition of "Occupier"

The Bill also amends the definition of "occupier" in the Mineral Resources Act 1989, Petroleum and Gas (Production and Safety) Act 2004, the Petroleum Act 1923, the Geothermal Energy Act 2010 and the Greenhouse Gas Storage Act 2009 to clarify ambiguity arising from the existing definition.

Under the existing definition there was some confusion whether an occupier of freehold land that was not the holder of a lease registered under the Land Title Act 1994 was an "occupier". The Bill provides that an occupier will be a person who has a "right to occupy under an Act or lease registered under the Land Title Act 1994" or a person who has had a right to occupy given to them by such a person.

This will have implications for resources companies seeking to identify persons whom they will be required to notify and with whom they should negotiate, in relation to accessing land for the purpose of conducting their exploration and mining activities.

Making a Submission

The Mining and Other Legislation Amendment Bill 2012, explanatory notes and submission guidelines are available online here.

Once the Committee has received submissions and announced its findings, HopgoodGanim will provide further analysis of what these changes may mean for you.

© HopgoodGanim Lawyers

Award-winning law firm HopgoodGanim offers commercially-focused advice, coupled with reliable and responsive service, to clients throughout Australia and across international borders.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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