Client Update: New approach to stalled mining applications in WA
4 May 2012
In brief: A new approach by the Western Australian Department of Mines and Petroleum may have a significant impact on stalled exploration and mining tenement applications. Partner Marshall McKenna (view CV), Lawyer Joe Freeman and Law Graduate Anthony Graham report.
- How you'll be affected
- The right to negotiate and the granting of mining tenements
- Possible approaches by the DMP
The WA Department of Mines and Petroleum (the DMP) has announced the establishment of a specialist project team aimed at resolving long-outstanding applications for mining tenure under the Mining Act 1978 (WA) that have stalled during 'future act' right to negotiate processes under the Native Title Act 1993 (Cth) (the NTA).
The formation of this specialist team and the DMP's focus on this issue is a further step in broader reforms in WA that are aimed at streamlining application and approvals processes, and removing backlogs under the Mining Act. The DMP issued a media release stating that the 'project team will use all the resources available under the Mining Act and the NTA to resolve long-outstanding negotiations', and that the stalled applications would be resolved by the implementation of procedure and legislative amendments.
The impact of the DMP's new approach is that hundreds of applications that were considered to be indefinitely stalled may no longer be, and the possibility of a forced resolution to these applications may have significant operational and future planning consequences for applicants and their competitors, and other interested parties.
- Applicants who have had an application for an exploration or mining tenement stalled in the NTA negotiation process may find a DMP-established specialist project team working to resolve the application.
- An applicant that fails to engage with the specialist team and make a genuine 'last-gasp' effort to resolve negotiations may see the state take a more hardline approach to resolving the application, including utilising powers under the Mining Act to terminate the application or referring the negotiations to arbitration under the NTA.
- To ensure an application is not dismissed, the applicant may be forced to complete the application process quicker than expected. As a result, they will be subject to tenure holding costs and related obligations earlier than anticipated, as well as having incurred the costs of the arbitration process, or other commitments as provided for under any agreement with the native title party.
- If an application is dismissed, or the applicant decides not to proceed with it, the land in question would then be opened for others to make an application for the grant of tenure in the area.
The NTA sets out procedures that persons applying for exploration and mining tenements under the Mining Act must abide by before the application can be granted. As mining and exploration tenure granted under the Mining Act is a future act under the NTA, the right to negotiate processes under the NTA must be satisfied before it can be granted (unless there is an Indigenous Land Use Agreement already in place that covers the grant of the tenure). These processes require that the applicant, persons with registered native title rights or interests in the relevant area, and government parties enter into good faith negotiations regarding the granting of the tenement.
If parties reach agreement through this process, then the native title issues relating to the application are resolved along the terms of the agreement, and the application process under the Mining Act can continue to final resolution with the DMP.
If, after six months of negotiation, agreement has not been reached, any party to the negotiation may apply to have the National Native Title Tribunal (the NNTT) make a binding determination through an arbitration process as to whether or not, for native title purposes, the grant of tenure can occur. During the negotiations, parties are also able to request that the NNTT mediate to assist the parties in reaching an agreement.
Despite the parties' ability to refer an application to arbitration for a binding determination, many applications for mining tenements stall, for various reasons, at this stage of negotiation, and are essentially left in limbo.
During this period of stasis, section 105A of the Mining Act ensures that the applicant retains a priority claim to hold the applied-for tenement ahead of any other applications made against the same area of land. As a result, there has been a progressive growth in the backlog of applications, such that there are more than 800 mining lease applications currently pending, effectively locking up significant areas of land from active exploration or mining activities.
As noted above, the DMP has stated that the 'project team will use all the resources available under the Mining Act and NTA to resolve long outstanding negotiations', and that the stalled applications would be resolved by the implementation of procedural and legislative amendments.
In the first instance, the DMP team may engage with the applicant and native title party, and encourage them to make a last-gasp attempt at negotiation to reach agreement on conditions that would allow the grant of the tenement.
If the negotiations are not resolved within a given period of time, the DMP may have the application referred to arbitration before the NNTT. The DMP is able to do this, as the state, as the grantor of the tenement under the Mining Act, is a party to the NTA negotiation process (even though it has traditionally played a passive role).
An alternative mechanism for resolving outstanding negotiations is the exercise, or threat of the exercise, of the Minister for Mines' power under s111A of the Mining Act to terminate or summarily refuse applications before they have been determined. To take this course of action, the Minister must be satisfied on reasonable grounds that it is in the public interest that the application should not be granted.
There is, however, a degree of uncertainty as to whether the Minister could exercise his or her power under s111A in this situation. This is because a termination of the application may not, on reasonable grounds, be in the public interest when an alternative course of action is available to the state, through the NTA arbitral process, to resolve the delay and allow the application to run its course under the Mining Act.
Tenement applicants, and other interested parties, need to be aware that there may be pressure to resolve outstanding exploration and mining tenement applications sooner than was previously expected, which may result in unanticipated cost and planning implications. Parties with pending mining applications, or those interested in areas that have been tied up in the application process, should review those applications and potentially reassess their own plans in light of the DMP's new approach.
- Marshall McKennaPartner,
Ph: +61 8 9488 3820
- Ben ZillmannPartner,
Ph: +61 7 3334 3538
- Emily GerrardSenior Associate,
Ph: +61 3 9613 8611