Australia: New coal and CSG overlapping tenure framework - what you need to know

Clayton Utz Insights
Last Updated: 22 September 2014
Article by Mark Geritz, Jasmin Singh and Rebecca Rowling

Most Read Contributor in Australia, November 2017

Key Points:

Queensland's Common Provisions Act introduces "as of right grant" of coal and CSG production tenements.

The new Mineral and Energy Resources (Common Provisions) Act 2014 (Qld) (CP Act) was passed last week. Importantly amendments were made just prior to the passing of the Act.

Chapter 4 of the CP Act sets out a new regime for dealing with overlapping coal and coal seam gas (CSG) tenements. In this article, we'll set out in more detail the key aspects of the new regime, including the transitional arrangements for existing tenements.

Key concepts in the new regime for overlapping coal and coal seam gas tenements

The new regime is broadly consistent with the principles in the White Paper "Utilisation of Queensland's Coal and Coal Seam Gas Resources – a New Approach to Overlapping Tenure in Queensland" which contained the generally agreed industry position about reforms to the legislative framework.

Consistent with the White Paper, the key concepts of the new regime include:

  • "as of right grant" of coal and CSG production tenements;
  • coal production under a mining lease is given a "right of way" or sole right of occupancy for production activities in defined areas called initial mining areas and rolling mining areas, subject to minimum notice periods to the overlapping CSG tenement holder;
  • requirements for a mining lease applicant to issue an advance notice to the petroleum tenement holder, which must include a proposed mining commencement date for the mining lease being at least:
    • 18 months (where there is an overlapping ATP – though there are provisions allowing the ATP holder to lodge a concurrent petroleum lease application meaning that the mining commencement date is extended to 11 years as if the ATP holder was a petroleum lease holder at the time of the advance notice)
    • 11 years (where there is an overlapping petroleum lease)
  • requirements for joint development plans to be agreed with a certain flexibility to negotiate terms outside of the default position in the CP Act, subject to conditions and if certain provisions are not agreed a mandatory arbitration process will apply;
  • the mining lease holder to pay compensation to the CSG tenement holder in certain circumstances, including for lost CSG production if the mining lease holder accelerates the minimum notice periods described above;
  • "right of first refusal" of an overlapping CSG tenement holder to incidental CSG on a mining lease. The mining lease holder now has greater rights to use the incidental CSG if the CSG tenement holder refuses to accept the incidental CSG;
  • ongoing obligation for overlapping coal and CSG tenement holders to exchange relevant information; and
  • a new adverse effects test to apply to deal with the interaction between certain overlapping tenements.

Transitional arrangements for CP Act

The new regime will not apply to all coal and CSG tenements. It is important to consider the transitional provisions set out in Chapter 7 Part 4 of the CP Act, to determine which tenements and applications are governed by the new regime, and which will remain governed by the existing regime in the Mineral Resources Act 1989 (Qld) (MRA) and the Petroleum and Gas (Production and Safety Act) 2004 (PAG Act) (as applicable).

A high-level summary of the transitional provisions is below:

  1. Resource authorities (whenever granted) over existing production resource authorities
  2. Tenure status Legislative position
    EPC / mineral development licence (MDL) / mining lease (ML) (whenever granted) over a petroleum lease (PL) that was granted before the commencement of the CP Act Existing regime in MRA applies
    ATP/PL (whenever granted) over a mining lease that was granted before the commencement of the CP Act Existing regime in PAG Act applies
  1. Existing applications for coal mining leases
  2. Tenure status Legislative position
    Mining lease application made and not decided before the commencement of the CP Act over an ATP (without consent of ATP holder)

    New regime in CP Act applies (subject to some adjustments to notice periods for commencement of mining)

    If, at the commencement of the CP Act, there is a concurrent PL application over the same area, there is a process which appears to be intended to permit the PL applicant to issue a concurrent notice to the ML applicant, so that, in applying the new regime, the PL applicant will be treated as a PL holder rather than an ATP holder (although the drafting of these provisions in the CP Act does not expressly state that this provision applies to a PL applied for before the commencement of the CP Act).

    ML application made and not decided before the commencement of the CP Act over an ATP (with consent of ATP holder)

    New regime in CP Act applies (subject to ability to adjust notice periods for commencement of mining by agreement)

    If, at the commencement of the CP Act, there is a concurrent PL application over the same area, there is a process which appears to be intended to permit the PL applicant to issue a concurrent notice to the ML applicant, so that, in applying the new regime, the PL applicant will be treated as a PL holder rather than an ATP holder (although the drafting of these provisions in the CP Act does not expressly state that this provision applies to a PL applied for before the commencement of the CP Act).

    ML application made and not decided before the commencement of the CP Act over a PL (without consent of PL holder) Existing regime in the MRA applies (unless otherwise agreed by the parties)
    ML application made and not decided before the commencement of the CP Act over a PL (with consent of PL holder) Existing regime in the MRA applies (unless otherwise agreed by the parties)
  1. Existing applications for PLs
  2. Tenure status Legislative position
    PL application made and not decided before the commencement of the CP Act over an EPC/MDL (without consent of EPC/MDL holder)

    New regime in CP Act applies

    If, after the commencement of the CP Act, and before the grant of the PL, a concurrent ML application is made by the EPC/MDL holder over the same area, the mining commencement date for the ML must be 11 years from the giving of the advance notice by the ML applicant.

    PL application made and not decided before the commencement of the CP Act over an EPC/MDL (with consent of EPC/MDL holder)

    New regime in CP Act applies

    If, after the commencement of the CP Act, and before the grant of the PL, a concurrent ML application is made by the EPC/MDL holder over the same area, the mining commencement date for the ML must be 11 years from the giving of the advance notice by the ML applicant.

    PL application made and not decided before the commencement of the CP Act over a ML (without consent of ML holder) Existing regime in the PAG Act applies (unless otherwise agreed by the parties)
    PL application made and not decided before the commencement of the CP Act over a ML (with consent of ML holder) Existing regime in the PAG Act applies (unless otherwise agreed by the parties)
  1. Surat Basin Transitional Area
  2. Tenure status Legislative position

    Applies to tenements in the "Surat Basin Transitional Area" (area to be prescribed by regulation) where there is an overlap between:

    • a PL granted after the commencement of the CP Act but no later than 31 December 2016; and
    • a ML applied for after the commencement of the CP Act but before 1 July 2020

    New regime in the CP Act applies with the following amendments:

    • mining commencement date for ML must not be before 1 July 2030 (unless PL holder agrees)
    • the mining commencement date can be accelerated by ML holder (subject to notice and compensation provisions in the new regime) but cannot be accelerated to earlier than 1 July 2020 (unless PL holder agrees)

Amendments to safety regime applicable to overlapping coal and CSG tenements

The CP Act does not amend the safety regime applicable to overlapping coal and CSG tenements. Instead, amendments to the safety regime have been proposed in the Water Reform and Other Legislation Amendment Bill 2014 (Qld). This was introduced to Parliament on 11 September 2014 and Committee is due to report to Parliament on the Bill by 17 November 2014.

In summary, the Water Reform Bill proposes to (among other matters) implement consistent safety provisions for coal and CSG tenement overlaps across the relevant Acts, based on the principles in the White Paper. The new safety provisions require parties to reach agreement about, and implement, joint interaction management plans for overlapping resource authorities. If agreement cannot be reached within a specified timeframe, the parties are required to apply for arbitration of the dispute under the relevant provisions in Chapter 4 of the CP Act.

The new provisions will apply to existing and future operations on coal and CSG tenements, however for existing operations, a grace period of six months will apply prior to the new provisions taking effect.

Next steps

A number of key aspects of the new regime will be governed by the Regulations to the CP Act, which are yet to be released.

The CP Act will commence on a date to be fixed by proclamation.

You might also be interested in...

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

    Disclaimer

    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

    Registration

    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

    Cookies

    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

    Links

    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

    Mail-A-Friend

    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

    Emails

    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

    Security

    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions