WA miners and explorers should review their current and proposed mining projects
The Mining Amendment Act 2012 (WA) (MAA) makes a number of significant amendments to the Mining Act 1978 (WA) including, among other things, extending the period for compulsory partial surrender of an exploration licence to six years, providing applicants for mining leases with the option of lodging a resource report which complies with the JORC Code and has been reported to the ASX, and allowing mining to be carried out on Commonwealth land.
The MAA received Royal Assent on 29 November 2012, but a commencement date has not yet been finalised or announced by the Parliament of WA (the Department of Mines and Petroleum had suggested a possible commencement date of January 2013). An outcome of a statutory review into the operation and effectiveness of the Mining Amendment Act 2004 (WA), the MAA introduces primarily minor administrative amendments, along with some significant changes, with the aim of enhancing the effective operation of the Mining Act and Regulations.
Key amendments to the Mining Act include:
The current requirement to surrender a portion of an exploration licence by the end of five years after the date on which an exploration licence is granted has been extended to six years. This gives explorers another year to conduct exploration activities before they must surrender ground. The maximum discrete areas to remain following compulsory partial surrender will increase to six areas from three. However, any exploration licence granted in respect of 10 blocks or less will not be subject to the compulsory partial surrender requirement. Further, the compulsory partial surrender requirement will not apply to a licence with retention status approved (section 65 of the Mining Act).
Mining lease applications
Currently, an application for a mining lease must be accompanied by either a mining proposal or a mining operations statement and mineralisation report. Applicants may instead lodge a "resource report" (setting out details of the mineral resources in respect of the land) which complies with the JORC Code and has been reported to the ASX (section 74 of the Mining Act).
There will no longer be a requirement to mark out a miscellaneous licence (section 93 of the Mining Act). Also, section 91 of the Mining Act has been amended to broaden the intended use of a miscellaneous licence to mining generally, rather than limiting its connection with "mining operations".
Definition of "mining operations"
The definition of "mining operations" has been broadened to ensure that new methods of mining are regulated. Mining operations will include the process of burning coal underground to obtain gas which is a method not presently governed by any jurisdiction (section 8 of the Mining Act).
A definition of "Commonwealth land" is inserted into section 8 that includes land over which the Commonwealth holds a freehold or leasehold interest or land that is otherwise vested in the Commonwealth.
On commencement of the MAA, Commonwealth land will fall within the jurisdiction of the Mining Act. As a result, mining can be carried out on Commonwealth land upon the written consent of the WA Minister for Mines and Petroleum and the agreement of the Commonwealth Minister for Sustainability, Environment, Water, Population and Communities(section 25A65 of the Mining Act). The State will not have the power to resume Commonwealth land (section 21 of the Mining Act).
Within three months from the commencement of the MAA, an applicant for an exploration licence which currently encroaches onto Commonwealth land has a right to mark out or apply for a mining tenement in respect of the land the subject of the existing application. Applications will be treated in the order of priority established by the existing (ineffective) licence applications (section 18, Division 2, Second Schedule of the Mining Act).
Other amendments to the Mining Act include:
- an extension of the time limit for prosecuting an offence under the Mining Act from three to 12 months (section 18 of Division 2, Second Schedule of the Mining Act);
- the automatic issue of a hard copy licence document being dispensed with (however, a licence document or lease instrument may still be obtained upon request and on the payment of a prescribed fee) (section 116 of the Mining Act);
- an increase in monetary penalties for various breaches of the Mining Act along with the introduction of larger penalties for companies (sections 96 and 96A of the Mining Act); and
- a warden having a right to declare an interest (direct/indirect) to the parties in the matter being heard before him/her and the parties having a right to decide whether or not to agree to the matter proceeding before that warden (section 15 of the Mining Act).
In light of these changes to the Mining Act coming into effect as early as January this year, miners and explorers should review their current and proposed mining projects and consider how the changes will impact on the operation and future planning of these projects. Though the amendments are mostly administrative in nature, many of the amendments are a sensible response to calls for reform by various stakeholders and agencies within the mining industry over a number of years to enhance the effective operation of the Mining Act.
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. Persons listed may not be admitted in all states and territories.