Australia: Requirement to report MDL and ML holders exercise of underground water rights in Queensland - deadline looming

The transitional period for notifying the Department of Environment and Heritage Protection about the exercise of underground water rights for mineral development licences (MDL) and mining leases (ML) that were in existence on 6 December 2016 expires on 6 March 2017.

The requirement to notify applies to all MDL and ML holders in existence on 6 December 2016 who are exercising underground water rights (including those who hold or are deemed to hold a water licence or water permit that authorises the take or interference with associated water).

Water reform legislation

The Water Reform and Other Legislation Amendment Act 2014 (WROLA) (which began operation on 6 December 2016) modified the Mineral Resources Act 1989 (MRA) and the Water Act 2000 to bring the rights and obligations of ML and MDL holders in respect of "associated water" in line with that existing for petroleum tenure holders under the petroleum legislation.

Summary of measurement, reporting and notification requirements

As part of the reforms:

  • A new section 334ZP of the MRA was established containing a right for the holder of a MDL or ML to take or interfere with underground water in the area of the licence or lease where the taking or interference happens during the course of, or results from, the holder's authorised activities (associated water).
  • MDL and ML holders are required to:
    • measure and report on the volume of associated water taken (measurement and reporting requirement); and
    • also advise the chief executive of the department in which Chapter 3 of the Water Act is administered (being the Department of Environment and Heritage Protection (EHP)) of the exercise of the holder's underground water rights immediately after the holder starts exercising those rights (notification requirement).

For the measurement and reporting requirement, the Mineral Resources Regulation 2013 sets out the requirements for measuring and reporting on the volume of associated water taken. Generally, such reporting requirements must be carried out within 20 business days after the end of the reporting period (being the period from 1 July to 30 June each year).

In terms of the notification requirement, for MDLs and MLs in existence as at 6 December 2016, holders were given until 6 March 2017 to comply with this requirement.

Do the measurement, reporting and notification requirements apply to ML and MDL holders who also hold a water licence or water permit?

The measurement and reporting requirement applies to all ML and MDL holders, regardless of whether a water licence or water permit is held that authorises the take or interference with associated water.

Similarly, the notification requirement applies to all ML and MDL holders who exercise underground water rights. This includes those who hold a water licence or water permit that authorises the take or interference with associated water.

Reliance on an existing water licence or water permit for the authorised activities under an MDL or ML is an exercise of the holder's underground water rights and requires the holder to comply with underground water obligations (being those in Chapter 3 of the Water Act).

While MDL and ML holders who also hold a water licence are excluded from some of the obligations in Chapter 3 of the Water Act, all MDL and ML holders (including those who hold a water licence) are subject to the general obligation in Chapter 3, Part 4 to use reasonable endeavours to negotiate make good agreements with affected bore owners.

It is also important to note that WROLA introduced a new section 1283 into the Water Act to confer underground water rights on certain MDLs and MLs that had been granted exemptions from water licencing requirements between 2003 and 2012 pursuant to an operating policy. The effect of section 1283 is that those holders are taken to have been granted a water licence and are subject to the measurement and reporting requirement and the notification requirement as well as parts of Chapter 3 of the Water Act.

How to comply with the requirements

The requirements of compliance with the measurement and reporting requirement are set out in the MR Regulations. Some of those requirements rely on a guideline, "Measuring the volume of take of associated water under a mining lease or mineral development licence", which is to be published on the Department of Natural Resources and Mine's website (but does not appear to be available yet).

In terms of compliance with the notification requirement, holders should undertake the following process by 6 March 2017:

  • Email EHP:
  • State for each tenure (ML or MDL):
    • The resource tenure holder
    • The tenure type and number
    • A statement that the tenure holder has started to exercise underground water rights (i.e. take associated water).
  • If there are several tenures with the same tenure holder and the exercise of underground water rights has occurred on all of them, holders may list all the tenure type and numbers.
  • Details of any relevant water licences or permits could also be referred to for completeness.

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.

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