17 Sep 2015
Queensland and Northern Territory announce reforms to their resources tenure framework
by Mark Geritz, Patrick Cranley
The energy and resources sector should look at making submissions on proposed changes to Queensland's and the Northern Territory's resources tenure frameworks.
The Queensland and Northern Territory Governments have recently announced amendments to their resources tenure framework, with Queensland's proposals being the most significant amendments in more than 25 years.
Queensland's Innovative resources tenures framework: Policy position paper
As part of their ongoing Modernising Queensland's Resources Acts Project, the Department of Natural Resources and Mines (DNRM) has released the Innovative resources tenures framework: Policy position paper ‒ August 2015.
The Policy aims to address issues relating to the current tenure framework identified by industry. These issues include that the framework is overly prescriptive, complex, duplicative and unresponsive, especially as it is currently regulated by six Acts:
- Mineral Resources Act 1989;
- Petroleum Act 1923;
- Petroleum and Gas (Production and Safety) Act (PAG Act);
- Geothermal Energy Act 2010;
- Greenhouse Gas Storage Act 2009; and
- Mineral and Energy Resources (Common Provisions) Act 2014,
together, the Resources Acts.
One of the major changes proposed by DNRM, is a proposal to introduce uniform tenure types across the different Resources Acts..
Source: Innovative resources tenures framework: Policy position paper – August 2015
Further, it is proposed that tenures could be managed on a project basis. By obtaining "project status", proponents will be able to group and manage several related tenures as one project, assisting them to achieve certainty of tenure over resources for later production. Another benefit of obtaining project status is the ability for performance and reporting requirements to be co-ordinated on a project-wide basis.
The key changes proposed by the Policy relate to the exploration phase of projects. New exploration authorities are proposed for maximum terms of:
- 8 years for minerals;
- 10 years for coal; and
- 12 years for petroleum, geothermal and greenhouse gas.
Renewal of an exploration authority is not proposed, however if the exploration authority is initially granted for less than the maximum term, extension up to the maximum will be possible provided the proponent can justify the extension.
As part of DNRM's shift to an outcomes-based approach, the requirement for prescriptive work programs is proposed to be removed, and instead proponents are to provide a work plan detailing their exploration objective and geological model up to the mid-point of the term of the authority.
The performance of an exploration authority holder will be self-assessed by submitting annual reports to DNRM, without the need to meet prescriptive legislative requirements. In addition, a "mid-term check-in" will be held between the exploration authority holder and DNRM to assess the performance of the proponents to see if they are meeting their exploration objectives and generally in compliance with the legislation.
Under performance at the mid-term check-in may result in cancellation of the authority, imposition of a penalty or both.
Other amendments to exploration authorities include:
- removal of statutory maximum areas; and
- default relinquishment of 50% of the area granted after four years for minerals, five years for coal and six years for petroleum, geothermal and greenhouse gas.
A resource development authority is a new authority, similar to a Potential Commercial Area under the PAG Act. It is designed to allow for the appraisal of resources to determine the quantity and quality of the resource, with a secondary purpose for retention status. The proposed maximum terms are up to 10 years for minerals and coal, and 15 years for petroleum, geothermal and greenhouse gas.
The following authorities all require further development prior to the implementation of the policy:
- Resource production authorities: to be used during the production phase of a project, including for site preparation, commissioning, extraction, processing, waste management, decommissioning, final rehabilitation and closure;
- resource information authorities: to be used to enable the gathering of information up to a term of two years. It is intended these authorities will include attributes of a data acquisition authority, water monitoring authority, petroleum survey licence and prospecting permit which are available under the current Resources Acts; and
- resource infrastructure authorities: to be used across all resource types, to accommodate the resources-related infrastructure activity that already exists, including pipelines, petroleum facilities and infrastructure mining leases.
DNRM has identified that transitional arrangements will be critical to the success of the implementation of the Policy, and aim to have these developed by late 2015. The Policy does note that one of the principles for transitional arrangements is that current granted rights under tenures will be maintained by continuance of the existing granted tenure rights.
DNRM aims to discuss its Policy with industry during September and October 2015, and submissions are invited on the Policy. Submissions close 16 October 2015.
Proposed amendments to the Northern Territory Mineral Titles Act
Although the Northern Territory's Mineral Titles Act has only been in operation for a little more than three years a number of issues have been identified. The Department of Mines and Energy (DME) has released a paper proposing amendments to the Mineral Titles Act to resolve these issues and has called for submissions from major users of the Mineral Titles Act on the proposed amendments.
A high-level summary of the amendments are listed below:
- clarification that a person may apply for up to 250 blocks when applying for an Exploration Licence (EL), and may reduce the area of an EL down to a minimum of 1 block;
- removing the ability for land banking / warehousing of large areas of land under Extractive Mineral Exploration Licences (EMELs) by amending the Mineral Titles Act so that only a maximum of one block, adjacent to only one other EMEL held by the same person, may be applied for, and that a person cannot hold more than 8 blocks at any one time;
- introduction of a new title granting the right to conduct activities that are ancillary to extractive mineral mining activities;
- potentially making provision to permit amalgamation of title areas held by related corporations (unless there are unintended regulatory consequences such as stamp duty);
- removal of the requirement for a person to show that they have a "legal or equitable" interest in a title in order to allow that person to lodge a caveat, instead that person will merely need to show that they have "an interest" in the title;
- consideration of alternative arrangements for access to Aboriginal lands for low-impact activities (ie. preliminary exploration and fossicking);
- clarification in relation to the amount of minerals allowed to be extracted when fossicking;
- additional reporting and notification requirements;
- removal of redundant provisions; and
- clarification of ambiguous or confusing wording or provisions.
Related amendments to the Mineral Titles Regulations have also been proposed and the DME are seeking submissions on these proposed amendments as well.
Submissions close 30 September 2015.