Key Point

  • Mining companies are required to submit more than one Mining Lease Application where multiple petroleum tenures held by different owners cover the whole of a proposed mining lease application area.

Pursuing a mining lease application as a single application or as multiple applications was formerly a decision that could be made at the discretion of the mining lease applicant. But this is no longer the case. Recent changes to the Mineral Resources Act mean that, in some circumstances, mining lease applications must be split.

If a mining lease applicant is seeking a mining lease for coal or oil shale over an area that is partly subject to petroleum tenures (ie. authorities to prospect or petroleum leases) and partly not, then separate mining lease applications must be made for each of those areas.

Separate mining lease applications will also be required if there are both petroleum leases and authorities to prospect over the area of the mining lease application and those authorities to prospect and petroleum leases are held by different people.

The splitting of mining leases is now mandatory in these circumstances.

Although the policy rationale for this mandatory splitting is obvious (ie. splitting the mining lease applications allow co-ordination arrangements to be negotiated in respect of the affected part of the mining lease area with the appropriate parties), this has several implications for miners:

  • multiple mining leases will require additional administration and management to prosecute; eg. separate paperwork for each application;
  • the applications could proceed at different rates, meaning that different steps are being taken at different times, which adds additional management complexity;
  • there is a risk that some, but not all of the mining leases will be granted. As it is likely that all of the mining leases will be required in order to establish a viable project, the failure of any mining lease application could be fatal to the project;
  • other processes relating to the applications will also need to align with the multiple applications, eg. environmental authority applications, landowner dealings, native title processes. All of these processes must now be organised to fit around the coal seam gas process.

Mining lease applicants will therefore need to carefully scrutinise the petroleum tenures overlapping the proposed mining lease area prior to lodging any mining lease application and will need to develop a strategy for managing multiple applications around the existing petroleum tenures. This is by no means insurmountable, but emphasises the importance of properly developing a full and detailed strategic plan at the beginning of the application process.

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.