02 May 2019

Parliamentary Committee report approves proposed amendments to coal and petroleum tenure management in Queensland

By Mark Geritz, Jasmin Singh and Stephanie Centorame

The State Development, Natural Resources and Agricultural Industry Development Committee has recommended the Natural Resources and Other Legislation Amendment Bill 2019 be passed, but has some concerns.

On 18 April 2019, the State Development, Natural Resources and Agricultural Industry Development Committee tabled its report on the Natural Resources and Other Legislation Amendment Bill 2019, which will affect industry's management of coal and petroleum exploration tenure.

Of some concern was that, while the Committee acknowledged various industry concerns about the Bill –including the drafting of various provisions – it did not make specific recommendations to tighten the drafting, instead relying upon Government indications that further consultation would be undertaken before (and even after) the Bill is passed.

Exploration permits – capped terms

The Bill proposes a 15-year cap on the overall life of a mineral or coal exploration permit (EP), with an additional three years granted by the Minister if exceptional events apply.

The Committee noted that the Queensland Resources Council (QRC) had raised an issue with regard to a capped term potentially resulting in a proponent being locked out of accessing its EP in circumstances where there is an overlapping tenement. The concern in this case is that an EP with a capped term may expire before the proponent has had the ability to access the land due to the existence of an overlapping tenement.

The Committee did not make a recommendation about this matter, though it referenced the QRC's submission in which it is noted that the Department of Natural Resources, Mines and Energy is examining this scenario.

Exploration permits – relinquishment

The Bill proposes to streamline the relinquishment requirements of EPs and authorities to prospect (ATPs) by reducing the frequency of relinquishment.

The Committee noted that it had heard concerns raised by stakeholders about the possible difficulties for existing tenure holders to transition those tenures to the revised relinquishment requirements.

While the Committee made no recommendation about the issue, the Report noted that the Committee was satisfied with the Department's undertaking to review the transitional provisions for relinquishment and that the matter would be resolved to the satisfaction of all parties.

The Committee also noted submissions by the QRC to the effect that, while the Bill allows for EP areas converted to mineral development licences or mining leases to count toward relinquishment requirements, the Bill includes no such amendment to the Petroleum and Gas (Production and Safety) Act 2004 (PAG Act) for ATPs. The Committee noted the QRC's intention to have separate conversations with the Department about including such provisions in another omnibus Bill and the Department's agreement to investigate the issue further.

Ministerial powers

The Bill proposes changes to the Mineral Resources Act 1989 and the PAG Act to allow the Minister to amend the conditions of an EP or ATP at any time, and without consulting the holder, if an exceptional event applies.

The Committee noted stakeholders' concerns that the term "exceptional event" was too broadly defined. The Committee did not make a recommendation about the amendment, however, it noted that the amendment was generally supported, provided that the Department clarifies what an exceptional event may look like. In that regard, the Committee noted the explanatory notes to the Bill, which state that the Ministerial power is intended to be used to the authority holder's benefit, to reduce or delay work program requirements or relinquishment requirements. On that basis, the Committee was satisfied with the amendment.

Statement of reservation

The non-Government members of the Committee included a "Statement of Reservation" noting that, while many of the amendments were supported by submitters, given the volume of amendments and the reporting time available, the Committee "could not scrutinise all amendments in the time available".

The NROLA Bill's future

As is noted in the Report, Government consultation on the Bill is ongoing. On that basis, amendment of the Bill is likely.

In the meantime, affected tenure holders should review the impacts of the Bill on currently held and future proposed tenures.  

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.