Australia: Mining lease implications of planning White Paper and "significant improvement" case

Tenements Update: July 2013
Last Updated: 12 July 2013
Article by Jennifer Anderson, Andrew White and Alan McKelvey

This month's update discusses the tenement implications of the NSW Government's White Paper for a new planning system, Exposure Draft Planning Bill 2013 and the Work Health and Safety(Mines) Bill 2013, which were all issued in April 2013.

We also review two Land & Environment Court (LEC) decisions.

Lightning Ridge Miners Association Ltd v Slack-Smith and what this means for landholders and miners, especially the Mining Act 1992 (NSW) (Mining Act) "significant improvement" concept of "other valuable work".

Peabody Pastoral Holdings Pty Limited v Mid-Western Regional Council and what this means for miner landholders, on re-categorising residential or farmland rateable land as "mining" in an order for costs case.

White Paper – a new planning system for NSW

On 16 April 2013, the NSW Government issued a White Paper for a new planning system in NSW, together with draft legislation comprising an Exposure Draft Planning Bill 2013 (Planning Bill) and Planning Administrative Bill 2013.

Under the new planning system, mining will continue to be considered a State Significant Development (SSD) requiring an Environmental Impact Statement (EIS). Mining is also a category of development that will always be "merit assessed" on a case by case basis (much of the remainder of the development approvals system is moving to code compliant "automatic" approval).

The Minister remains the consent authority for SSDs and has the power to delegate to the Planning Assessment Commission and, in limited cases, to senior officers of the Department of Planning & Infrastructure.

State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 is expected to remain in place, largely unchanged in the short term, although what form the mining specific NSW Planning Policy will ultimately take is uncertain at this point.

There are two features of the new planning system and proposed legislation that will impact Mining Leases.

Consistency in approvals - Mining Leases

The White Paper identifies approvals which must be issued consistently with a SSD planning approval—this includes the grant of a Mining Lease under the Mining Act.

The Planning Bill provides that a Mining Lease cannot be refused if it is required to carry out a development that has already received planning approval. The Mining Lease must be substantially consistent with the planning approval and its conditions. See s 6.3 of the Planning Bill.

This is essentially the same as the current position under the former Part 3A Environmental Planning and Assessment Act 1979 and the existing SSD regime.

Proposed tenements affecting public roads

Under the new planning system, it is proposed that the Mining Act will be amended to include special provisions that will apply in circumstances where the Planning Assessment Commission, or the LEC on appeal, approves the closing of a road that is affected by a SSD that also requires the grant of a Mining Lease under the Mining Act.

Following the issue of a Mining Lease, the Minister administering the Mining Act may transfer the road to the miner, and on transfer, the miner must pay the roads authority compensation in accordance with the Land Acquisition (Just Terms Compensation) Act 1991 "as if" there had been a compulsory acquisition.

What does this mean for you?

This proposal should make it easier for miners to effect road closures (important where the closure is time sensitive) for planning approval condition compliance, mine safety requirements, the opening of related relocated roads (if conditioned on other road closure), or access to relevant (former road) land for mining. Similar provisions already apply when a licence for a pipeline is granted under the Pipelines Act 1967.

It will be some time before the new NSW planning system takes effect. The White Paper provides that planning and assessment processes that began before the new legislation commenced will be dealt with under the current statutory procedures and planning instruments.

Introduction of the WHS (Mines) Bill

The Work Health and Safety (Mines) Bill 2013 (WHS Mines Bill), was introduced into NSW Parliament on 23 May 2013 and has now been passed by both houses. The bill will replace the existing legislation that regulates WHS in the mining industry in NSW. It will repeal a number of pieces of legislation, including the Mines Health and Safety Act 2004 (NSW) and the Coal Mine Health and Safety Act 2002 (NSW) (CMHS Act).

The mining activities test

The WHS Mines Bill will apply to workplaces that are "mines" where "mining operations" are carried out. Mining operations are defined as "activities carried out for the purposes of exploring for minerals, extracting minerals from, or injecting minerals into, the ground. Mining operations also include other activities carried out in connection with, and in the vicinity of those activities (such as storing or processing extracted materials)".

This application may be broader in scope than the current laws. This means that mine safety requirements will apply to activities carried out in connection with, adjoining to, or in the vicinity of mining activities at a site, as well as construction activities relating to existing or potentially proposed new mining operations.

What does this mean for you?

The implications of the activities test should be considered when identifying relevant areas for proposed tenement applications and proposed planning approval applications.

The Bill is currently awaiting assent and will commence at a later date by proclamation.

Lightning Ridge case – "significant improvement"

Lightning Ridge Miners Association Ltd v Slack-Smith [2013] NSWLEC 1063, decision 16 April 2013

In Lightning Ridge Miners Association Ltd v Slack-Smith, the LEC considered the "significant improvement" concept of "other valuable work".

Under s 62 of the Mining Act, landholders asserting a significant improvement can prevent the grant of a Mining Lease without landholder consent, and disputes over whether the grant is prevented are determined by the LEC.

This case concerned a dispute between the Lightning Ridge Miners Association and the landholders of Muttabun, a Western Lands Lease grazing property, as to whether or not an access road constituted a significant improvement on part of the property subject to a Mining Lease Application (MLA). The MLA, which was lodged by the Association in mid-2010, was based on an earlier mineral claim.

Under the Mining Act, significant improvement is defined as "any substantial building, dam, reservoir, contour bank, graded bank, levee, water disposal area, soil conservation work or other valuable work or structure".

The Court assessed whether the road was a significant improvement in both April 2013 and at the "relevant date", which was May 1996, when the original mineral claim was granted. This included consideration of very limited evidence of a site visit, old photographs, property management plans, council maps, earlier Mining Warden determinations and the conflicting recollection of individuals.

In considering s 62(1)(c) of the Mining Act, the Court held that the following may constitute "other valuable work": fences, firebreaks when maintained and functional, the combination of a fence and a firebreak, and a well-maintained access track.

In this case a "cleared ground feature" and "rough bush track" fell short of this standard and were found not to attract protection under s 62.

The Court also noted as relevant to its determination that the landholders had another well-maintained track available to them a short distance away, and that the landholders had not, in evidence, ascribed value to the disputed land. The landholders conceded that they could not object to the grant of the lease on the basis of a fence that was 10 cms clear of the MLA boundary.

Implications of this decision

The protection of s 62 of the Mining Act applies where the relevant improvement exists in the relevant status (functional and well maintained) on the relevant date.

Whether a landholder (which may be a miner) may defend their land from a Mining Lease application can depend on what information is available on the "significant improvement" at a relevant tenement application date, which may be many years before the right is asserted in the LEC.

The case reinforces the need to maintain good records relating to existence and state of improvement, to enable potential objection rights to possible future Mining Leases at the point an application (usually an exploration licence application) is first made affecting the land.

Where the landholder is a coal miner, who may have plans to mine its freehold where there is no current tenement, the miner should also consider approaching the Department of Resources & Energy (DRE) to register its interest in the coal on the DRE Register of Interests maintained by DRE's Industry Coordination Unit. Registration informs DRE of the miner's interest but does not give any legislative right or title.

Peabody Pastoral – re-categorisation of land leads to cost order

Peabody Pastoral Holdings Pty Limited v. Mid-Western Regional Council [2013] NSWLEC 86, decision date 6 June 2013

In this decision the LEC confirmed that the Mid-Western Regional Council had erred in law in re-categorising residential or farmland rateable land as "mining".

In this case, the Council's triggers to consider a re-categorisation of a piece of land as mining included the grant of an exploration licence, mining lease and development consent.

In ordering the Council to pay the rate payer's costs, the Court held that it was unreasonable for the Council to hold the following alone as sufficient to constitute a change in the use of land to re-categorise rates to mining:

  • noise affectation of parcels of land by a mine
  • change in ownership of noise-affected land purchased by the miner
  • the purpose of the miner's purchase of the noise affected land being under a development consent land acquisition obligation, and
  • the miner holding land for a mining purpose, where it was not used for a mining purpose.

Implications of this decision

The case reinforces the need for miner landholders to scrutinise all council rate invoices for correct categorisation of rates. The case follows a number of instances in recent years of councils in mining areas incorrectly re-categorising land (and thereby increasing rates in it) which did not proceed to hearing or court. We assist clients in evaluating land for council rating purposes and act for mining landholders in rate challenge LEC proceedings.

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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