Traditionally, mining companies have been reluctant to give
indigenous Australians equity stakes in mining projects,
preferring to issue royalties, lump-sum payments and employment
and education benefits to native title holders in exchange for
access to their land. However, in a landmark deal negotiated
earlier this year, some of the country's most
disadvantaged indigenous Australians will become shareholders
in an Australian Securities Exchange listed mining company
under an innovative native title agreement.
Under a native title agreement between the Western Desert
Lands Aboriginal Corporation (WDLAC) and Perth
based company Reward Minerals Ltd, the Martu people were able
to secure 7 million unlisted options in Reward Minerals,
exercisable at 50 Australian cents for the development of its
Lake Disappointment potash project in Western Australia. Once
exercised, the options would amount to 10.31% of Reward
Mineral's issued capital.
The Martu people hold native title over a 136,000 square
kilometre area in Western Australia, which covers highly
prospective ground for miners and explorers –
including deposits such as Rio Tinto's Kintyre deposit,
the Mega Uranium Kintyre Rocks projects, and existing mines
such as Newcrest's Telfer gold mine.
The deal was negotiated for the Martu people by Joe Proctor,
an advisor to the WDLAC, and Clinton Wolf, the chief executive
officer of the WDLAC. Mr Proctor believes that the equity
component is the way of the future in mining negotiations
"We believe that the presence of a generous indigenous
equity component as part of the transaction is the way of the
future in mining negotiations. Reward has offered equity in a
bid to align the future interests of both parties - an
innovative strategy which also acknowledges the strength of the
Martu people's rights."
In addition to the equity stake, the Martu people will
receive cash payments based on milestones in the development of
the project and a production royalty on potassium sulphate and
other mining products.
The impact of this deal will set a precedent for land access
negotiations between mining companies and Indigenous
Australians. Royalties and upfront payments, on their own may
no longer be accepted by native title groups who are likely to
push for material equity stakes in mining ventures.
If you would like to be kept updated on native title or
aboriginal heritage matters relevant to mining or exploration
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Otherwise, please contact either Liz Allnutt on (08) 9426 3214
or Natasha Vyrnwy-Jones on (08) 9426 3419 if you have any
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The mining industry is one of Australia's most important export sectors and makes a significant economic and social contribution to the Australian economy. Mining and minerals activity currently comprises 8 per cent of the Australian economy and 40 per cent of exports.
Part 2 explains the basic features of an EPC contract, with specific clauses for the Australian renewable energy sector.
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