Australia: You cannot take the renewal of an exploration licence for minerals for granted

Mining Updates
Last Updated: 15 June 2013
Article by Peter Burden, Jim Holding, Lyndon Masters and Alex Jones

In a decision released on 22nd May 2013 (Gold and Copper Resources Pty Limited v Minister for Resources and Energy) the NSW Land and Environment Court has decided that the purported renewal in March 2011 by a duly authorised delegate of the NSW Minister of Resources and Energy Minister of an exploration licence held by Newcrest Mining Ltd was invalid.

This decision is a timely reminder that Ministerial decisions to renew an exploration title can be challenged and applications for the renewal of exploration rights should be carefully prepared.

In this case the exploration licence covered an area of 120 sq. kms around Newcrest's large Cadia underground goldmine south-west of Orange. The Cadia mine was constructed by Newcrest at a cost of over $2 billion. It commenced commercial production on 1 January 2013.

The exploration licence was first granted to Newcrest in 1991 and had been renewed six times. The last renewal was in 2005 for a term that expired on 20 May 2009.

In March 2009 Newcrest applied to renew the licence over the same area of land as was covered by the expiring licence.

The Mining Acts in each of the states and territories provide for the relinquishment or reduction of the area covered by an exploration title over time. In NSW the Mining Act states that the area of land over which an exploration licence may be renewed is not to exceed half the area covered by the expiring licence, unless the Minister is satisfied that special circumstances exist that justify renewal of the licence over a larger area.

The Court proceedings asking that the renewal of Newcrest's Exploration Licence be declared invalid were brought by Gold and Copper Resources Pty Ltd ('Gold and Copper'), a privately owned exploration company. In March 2011 Gold and Copper had lodged an application for exploration licence for gold and other minerals over land covered by Newcrest's licence on the basis that Newcrest's licence was void or invalid.

Earlier decisions of the NSW Supreme Court had confirmed that under the Mining Act the Minister only had the power to renew an Exploration Licence over the whole area of the expiring licence if they were satisfied that special circumstances existed which justified the renewal over the larger area. Otherwise the prohibition against renewal of the exploration licence over more half the area covered by the expiring licence remained in force.

In this case the Court agreed with the submissions of Gold and Copper that there was no evidence that the Minister's delegate was satisfied that any special circumstances existed which justified renewal over the larger area. There was no Departmental briefing paper before the Minister's delegate and there was no other document in the Department's file in 2011 to indicate the Minister's delegate could have formed the required state of satisfaction as to the existence of special circumstances which justified renewal over the larger area.

The judge agreed with Gold and Copper that there was an evidentiary vacuum in the Ministerial delegate's decision-making process when the renewal decision was made in 2011. The Judge found there was no evidence of any document being produced by the Department before the decision was made and no document was produced by the delegate at the time when he was considering the renewal application in early 2011 setting out Newcrest's special circumstances which justified the renewal over the larger area.

The judge concluded that essentially there was no evidence about what the delegate considered were the special circumstances justifying renewal over the larger area at the time he was making the decision to renew the Licence. The judge found the departmental files left the Court none the wiser as to what the Minister's delegate had considered were the special circumstances which entitled him to renew the Licence over the same area.

No reasons were given for the decision to approve the renewal over the larger area and the Judge agreed that the Minister's delegate was not required to give reasons. However the absence of reasons for a decision does not stop a Court from reviewing the decision. The Judge applied the principles about the Court's powers to review decisions stated by Dixon J in the High Court in 1949 in Avon Downs Pty Ltd v Federal Commissioner of Taxation where he said that the fact that the Commissioner of Taxation did not give any reasons why he was not satisfied that a particular circumstance existed in relation to the affairs of a taxpayer did not stop the Court from reviewing his decision. Dixon J said it is not necessary that the Court should be sure of the precise way in which the Commissioner had gone wrong in reaching his conclusions. It is enough that the Court can see that in some way the Commissioner must have failed to properly carry out the task according to the relevant laws.

Applying those principles the Judge agreed with Gold and Copper that there is no evidence on which she could infer that the Minister's delegate had the required state of satisfaction about the existence of special circumstances when he decided to renew Newcrest's Exploration Licence.

The judge also confirmed that the Carltona principle (derived from the English Court of Appeal decision in Carltona Ltd v Commissioners of Works), that a government Minister is to be treated as having the collective technical and factual knowledge and the collective expertise of the public servants in the relevant government department when he makes decisions, did not extend to decisions made by a delegate of the Minister. The delegate was also not entitled to rely on knowledge of others in the Department as inferentially giving rise to his satisfaction about the existence of the special circumstances entitling him to renew the Licence over the larger area.

This case is a reminder that Applicants renewing exploration titles should be careful to include all of the information which is required to be before the Minister when they make the decision, especially where the title has been renewed many times before. This information should also be kept up to date. Applicants may also find benefit in liaising with departmental officers in the preparation of briefing materials for the Minister.

And conversely, organisations wishing to challenge the renewal of an exploration title, should consider obtaining the reasons for a decision, or interrogating the Minister on their basis for making a decision, to establish if the application made was fully compliant.

© DLA Piper

This publication is intended as a general overview and discussion of the subjects dealt with. It is not intended to be, and should not used as, a substitute for taking legal advice in any specific situation. DLA Piper Australia will accept no responsibility for any actions taken or not taken on the basis of this publication.

DLA Piper Australia is part of DLA Piper, a global law firm, operating through various separate and distinct legal entities. For further information, please refer to

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