21 December 2006
Key Points:
Different tenements impose difference obligations in relation to land access, such as entry notice requirements, reserve land, restricted land and compensation.
Under the Mineral Resources Act 1989 (Qld) ("MRA") different types of mining tenements - exploration permits, mineral development licences and mining leases - have been created to facilitate each of the exploration, development and production of minerals.
These different mining tenements have different impacts on the underlying land. For this reason, each type of tenement imposes different obligations in relation to access to land and therefore impacts differently on landowners. The key differences relate to the treatment of reserves and restricted land, the provision of notices of entry and the payment of compensation.
Failure to comply with the particular obligations applicable to a tenement could amount to an offence under the MRA (and the imposition of a financial penalty) or, to the extent that the obligation needs to be discharged during the application process, could adversely impact on the grant of the mining tenement. Miners will need to ensure that they comply with the obligations relating to their tenement to avoid a penalty or to avoid jeopardising their tenement.
Reserves
Reserves are treated differently as between exploration permits and mineral development licences on the one hand and mining leases on the other hand.
In the case of exploration permits and mineral development licences, reserves are automatically part of the area of that mining tenement. However, the tenement holder is prohibited from entering the area of the reserve without the consent of the owner of the reserve. The consent does not need to be given during the application for the tenement and may, in fact, be given at any time. So, if a landowner initially refuses to provide consent, an improvement in relations could open reserves to the mine later. A landowner may impose conditions on their consent. In some instances, the Governor-in-Council may provide its consent in lieu of landowner consent or may change any conditions imposed by the landowner.
By contrast, a reserve will only become part of a mining lease if the landowner provides its written consent by the last day for objections within the application process and if that written consent is provided to the mining registrar. The Governor-in-Council can nevertheless include a reserve in the area of the mining lease even if the landowner does not consent. The critical issue for miners is that if the necessary consent is not provided in the required time, then (subject to the Governor-in-Council's discretion) the reserve can never be included within the mining lease even if the landowner subsequently consents. Once lost to a mining lease, the reserve is forever lost to that mining lease.
Restricted land
Restricted land is treated almost identically to reserves. The primary difference between reserves and restricted land is that there is no power conferred on the Governor-in-Council to override a landowner's consent. Obtaining the consent of the landowner is therefore critical to mining lease holders but not necessarily so for the holder of exploration permits and mineral development licences as they will have subsequent opportunities to improve their relationship with the landowner and negotiate access to restricted land.
Notices of entry
A mining lease holder is in an advantageous position in comparison to exploration permit holders and mineral development licence holders in that the mining lease holder does not need to give the landowner notice of entry before each occasion of entry. A mining lease holder only needs to give the landowner notice of the grant of the mining lease in the first instance within 20 days of the grant.
The holder of an exploration permit or a mineral development licence is required to provide the landowner with a notice of entry at least five business days prior to entry. The notice must describe the activities proposed to be carried out on the land, must state when the activities are to be carried out and be accompanied by a copy of the relevant codes of conduct or practice applying the activities and any statement given to the Minister about proposals to protect the environment and rehabilitate the land.
A copy of the entry notice must be given to the mining registrar after the notice has been given to the landowner but prior to entry on the land.
A notice of entry must either be given to the landowner personally or sent by registered post to the landowner's residential address or business address.
Compensation
Probably the most contentious issue between miners and landowners is compensation. The differences in the way compensation is managed for different mining tenements cause some confusion.
A mining lease holder is required to pay compensation to the landowner prior to the mining lease being granted. Indeed, the mining lease cannot be granted until compensation is resolved. The landowner is entitled to be compensated for:
as a consequence of the grant of the mining lease.
In a worst case scenario, compensation would be assessed as a total loss of the land to the landowner.
The compensation will either need to be agreed with the landowner or will be determined by the Land and Resources Tribunal. Regardless of whether it is agreed or determined, the critical features for compensation for mining leases are that compensation must be resolved prior to the grant of the mining lease and the measure of compensation is significant.
For exploration permits and mineral development licences, the position is quite different.
The MRA provides that a landowner is entitled to recover, from time to time, in the Land and Resources Tribunal compensation in respect of damage or injury suffered or loss incurred by reason of a person acting under the authority of an exploration permit or a mineral development licence.
The features of compensation for exploration permits and mineral development licences are:
Because compensation is assessed after the fact, compensation will be calculated on the basis of actual loss, unlike mining leases where future forecasting is an estimate of potential losses.
In relation to the requirement that compensation be determined in the tribunal, in practice, a compensation agreement could be agreed with a landowner in lieu of tribunal proceedings. However, any such compensation agreement would need to contain terms not usually found in mining lease compensation agreements so as to ensure that the landowner cannot seek additional compensation in the tribunal for the same damage, injury or loss at a later date.
In relation to the assessment of compensation, compensation appears to be assessable at large and is not restricted to any particular heads of compensation as is the case with mining leases.
Summary
Different types of tenements set up different fundamentals in the relationship between landowners and miners.
Getting the consent of the landowner for entry up reserve land and restricted land is time-critical for applicants for mining leases but not so critical for holders of exploration permits and mineral development licences.
Similarly, resolving compensation with landowners is time-critical for mining lease applicants than for exploration permit holders and mineral development licence holders. However, the timely payment of compensation will generally be of critical importance to the landowner.
These factors illustrate that landowner dealings will necessarily be different between mining lease holders and exploration permit holders and mineral development licence holders. Successful mining activities, whether exploration, development or production, will usually have their foundation in a good working relationship between the miner and the owner of the underlying land. A good working relationship could help to avoid costly disputes through tribunal proceedings. Investment in the relationship by both a miner and a landowner early in the development of a mining project could ultimately facilitate a smooth transition from exploration permit through to mining lease.
For further information, please contact James Minchinton.
