7.1 Mining or production tenements
Acquisitions of interests in mining or production tenements will be notifiable as an acquisition of an interest in Australian land. As noted in paragraph 4.1, an interest in ‘Australian land’ expressly includes a ‘mining or production tenement’. The ‘mining or production tenements’ definition includes mining leases and licences, and petroleum production leases (both onshore and offshore), rights that preserve a right to recover minerals, oil or gas (which we assume is intended to address retention titles), leases under which the lessee has rights to recover minerals, oil or gas (which would extend to subleases) and an ‘interest’ in any of these (including, certain interests in profit/income sharing agreements). However, mere rights to revenue streams are not considered as a mining or production tenement, except if such rights are an asset of a national security business or the tenement is national security land.
As set out in the table in paragraph 4.2, the acquisition of interests in mining or production tenements will be notifiable regardless of value for foreign investors, other than relevant FTA Country investors who will be subject to a $1,427 million threshold.
7.2 Exploration and prospecting tenements
The acquisition of an exploration or prospecting tenement is exempt from the FIRB approval regime, except where the acquirer is a foreign government investor or the exploration tenement is in respect of national security land, in which case one needs to consider whether the tenement constitutes an interest in Australian land. If the tenement gives a right to occupy Australian land for a term (including extensions and renewals) that is reasonably likely at the time of the grant to exceed five years, then it constitutes an interest in Australian land and FIRB approval may be needed to acquire the interest.
7.3 Mining and oil and gas companies
The notification requirements for acquisitions of interests in companies will apply in respect of acquisitions of interests in companies which hold tenements (eg a foreign person acquiring a substantial interest in an Australian entity that meets the threshold will need to notify).
The acquisition of shares in an Australian mining or oil and gas company will also be a significant action where it meets the prescribed threshold (generally $330 million), where the company carries on an Australian business and the action results in a change in control. In relation to the concept of ‘control’, a person determines the policy of an entity or business of exploiting a mining or production tenement (and thereby controls the entity or business) if that person determines questions relating to disposal of an interest in the tenement.
Entering into, or terminating, an agreement with the holder of a mining or production tenement where the total value of the business exceeds $330 million and the action results in a change in control of the business is also a significant action. Agreements include those relating to leasing assets, the right to use assets, participating in profits or management and control of the business.
A transaction may also be notifiable as the acquisition of an interest in an Australian land corporation where the value of the company’s interests in Australian land (including mining or production tenements) exceeds 50% of its total assets by value (see items 4 and 7 of the table in paragraph 4.2).
7.4 Agricultural land
Agricultural land is relevant in the context of mining, oil and gas projects because it is defined by reference to use and potential use for a primary production business. This could include mining, production and exploration tenements that overlap, for example, with pastoral leases and other ‘land’ that is or could be used for a primary production business.
As noted above, there are exemptions to the definition of agricultural land, including:
- applications for approval for ‘mining operations’ (including oil and gas operations), associated waste storage and to locate related infrastructure on the land;
- land that is used wholly or predominantly for a mining operation, associated waste storage or to locate related infrastructure; and
- an approval from a government authority (other than a mining or production tenement) for mining or oil and gas projects, related infrastructure and associated waste storage (which we assume is intended to cover future rights to use land for mining and oil and gas projects – such as State Agreements), and land acquired or used wholly or predominantly to meet a condition of such approval (eg, land used for biodiversity purposes).
In relation to operating mining and oil and gas projects described in the second bullet above:
- the reference to ‘is used’ (in the present tense) is problematic as it raises issues around whether, for example, a mining lease that has been granted, but is yet to have an operating mine (or at least works commenced for construction of one) is caught; and
- similarly, the reference to ‘wholly or predominantly’ may be problematic for mining projects which could cover a large area of ‘land’ beyond the area of the mining operation itself.
Offshore oil and gas tenements will be exempted where the only primary production business for which the land could potentially be used relates to prescribed types of aquaculture.
The exemptions do not appear to capture land incidental to mining operations (eg, buffer zones). As noted above, exploration and prospecting tenements may also qualify as agricultural land. While interests in mining and production tenements should be caught by the exemptions, mining and oil and gas companies will still need to consider their tenure portfolios and determine whether the exceptions apply or whether registration on the agricultural land register is required.