Australia: Federal Court deems almost 300 mining leases invalid: lessons to be learnt from Graham v State of Western Australia

HG Alert: 12 August 2014
Last Updated: 14 August 2014

On 3 July 2014, the Federal Court in Graham v State of Western Australia determined that nearly 300 mining leases in Western Australia are invalid due to native title issues. As a result, traditional owners across the country are now looking at resources permits to see if a legal challenge is justified.

In this Alert, Partner Jonathan Fulcher and Associate Courtney Smith outline the key lessons to be learnt from this.

Key Points

  • Where a mining lease was granted pre-1994, you should seek advice in relation to each purported renewal, replacement or extension of that lease post-1994 to ensure that the tenement remains valid under the Native Title Act.
  • Where you are claiming extinguishment of native title by way of public works, the public works must be identified and a claim of extinguishment in relation to the area 'necessary or incidental to' the public work must be justified.

Case Summary

The Federal Court of Australia, in two separate judgments, declared that almost 300 mining leases in Western Australia are invalid under the Native Title Act. Following a determination of native title in favour of the Ngadju People, the Federal Court was asked to deal with the issue of the extent to which Ngadju native title rights and interests had been extinguished. One of the main areas of controversy was an area subject to mining leases which were granted in 1968 under a State Agreement called the WMC State Agreement, and subsequently 'normalised', meaning they were incorporated into the Mining Act 1978 (WA). Ultimately, the Federal Court held that the "normalising" of these leases in 2004, 2006 and 2007 was invalid under the Native Title Act, meaning that the leases were invalid to the extent that they affected native title.

Invalidity of Mining Leases

Where a mining lease is granted pre-1994 and it is purported to be renewed, replaced or extended post-1994, the renewal, replacement or extension must meet certain criteria under the Native Title Act to be valid. Of importance in the context of the decision in Graham is the requirement for the renewal, replacement or extension to create interests which are of a "similar kind" to those which existed under the lease pre-1994.

In order to assess whether interests are of a "similar kind", a thorough assessment of the rights both pre-1994 and post-1994 statutory and tenement conditions must be conducted and the impact of each of those rights on native title rights and interests must be identified. Where the rights and the impact of those rights on native title differ, there is an exposure for you that your mining lease may be invalid to the extent that it affects native title. Given the commercial risks involved in these circumstances, it may be preferable to undertake the 'right to negotiate' process or negotiate an indigenous land use agreement to eliminate the risk of invalidity.

The Native Title Act expressly provides that where a mining lease permits the mining of a specific mineral pre-1994, a change to that lease which permits the mining of a different mineral post-1994 will be an interest of a "similar kind". However, the Federal Court in Graham did not extend this to circumstances where other rights and obligations under the later mining lease are different. In Graham, the Federal Court held that mining leases under the WMC State Agreement did not create interests which were of a "similar kind" to the mining leases which subsequently replaced the original mining leases, granted pursuant to the Mining Act 1978 (WA). This was because the WMC State Agreement mining leases were "bespoke", requiring leaseholders to undertake obligations which were not features of the mining leases under the Mining Act 1978 (WA).

Public Works

The establishment of a "public work" pre-23 December 1996 will have extinguished any native title in the area of the "public work", as well as in any area which is 'necessary or incidental to' the "public work".

Where native title has been extinguished, any act may be done on the land without the risk that the act is invalid under the Native Title Act. So, the question arises, what land is 'necessary or incidental to' a "public work"?

In Graham, the State asserted that an area of one hectare around a water bore was the area 'necessary or incidental to' the water bore (which was a "public work"), thereby submitting that, for each water bore within the area of the Ngadju claim area, an area of one hectare of native title rights and interests was extinguished. The State was unable to provide any evidence to support this submission. The submission was challenged by the native title party. The Federal Court ultimately held that an area of 0.10 hectares was the area 'necessary or incidental to' each water bore within the Ngadju claim area, that is, one tenth of the area claimed by the State.

Where you are seeking to carry out an activity on land where native title is allegedly extinguished, it is prudent to ensure that a tenure history is conducted to ensure that you can confirm the extinguishment of native title. Further, evidence of the land 'necessary or incidental' to a "public work" must be readily available in the event that the scope of the area is challenged.

© 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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