The graticular block system has been the subject of two interesting developments which the sector should take note of.
First, the WA Supreme Court in Blue Ribbon Mines Pty Ltd v Roy Hill Infrastructure Pty Ltd [2022] WASC 362 (the Blue Ribbon Decision) has examined the Minister’s power under the Mining Act 1978 (WA) (the Mining Act) to excise areas the subject of a miscellaneous licence or general lease from the grant of an exploration licence where that excision results in an exploration licence being granted over part of graticular block.
Secondly, the Western Australian Parliament has passed a bill which amends the graticular block system and the marking out requirements for conversion applications in certain circumstances. It also contemplates fees being payable (if prescribed) by an objector to an application for a mining tenement.
Blue Ribbon Decision
Blue Ribbon Mines Pty Ltd applied for an exploration licence over 63 graticular blocks, an area which overlapped with several miscellaneous licences and a general lease held by third parties who lodged notices of objections to Blue Ribbon's Application.
In an endeavour to resolve the objections, Blue Ribbon and the objectors filed agreed minutes of programming directions which effectively asked the Warden to recommend that the Minister grant Blue Ribbon's application with:
- the excision of areas the subject of the miscellaneous licences and general lease from the exploration licence; and
- conditions or endorsements being imposed on the exploration licence which prohibited certain activity (including mining and exploration activities) on certain areas within the licence (the No Mining Conditions) or which required third party approval (such as approval from the Department of Mines, Industry Regulation and Safety or the Minister) before an activity is undertaken (the Approval Conditions).
Given the uncertainty about when the Minister can excise part of a graticular block from the grant of an exploration licence, the Warden reserved a number of questions of law for the Supreme Court.
The proposed excisions from the exploration lease: does the Minister have the power?
Ultimately, the Supreme Court found that the Minister does not have the power to excise areas the subject of a miscellaneous licence or general lease from the grant of an exploration licence if the excision will result in the exploration licence being granted over part of a block or blocks. Rather, an exploration licence can only be granted over part of a block where an express exception in the Mining Act applies.
In coming to this conclusion, the Chief Justice reasoned that to construe the Mining Act in a way that would permit the Minister to exercise his power in the manner contended by the parties would:
- undermine the purpose of the graticular block regime to create certainty, consistency and efficiency of administration in relation to the grant and management of exploration licences; and
- be inconsistent with a number of other provisions of the Mining Act which set out express exceptions to the block requirement.
While Chief Justice Quinlan found that the Minister does not have the power to excise parts of blocks in these circumstances, the decision suggests that the Minister does have the power to impose No Mining Conditions and Approval Conditions, subject to those conditions being otherwise validly imposed in accordance with, and for the purposes of, the Mining Act.
Using agreed minutes of programming directions: what you need to consider
The use of agreed minutes of programming directions to resolve objections is common practice in the Warden's Court if parties have competing interests in respect of the same or adjoining land. Such an approach allows parties to arrive at a commercial resolution that protects the interests of each party to the objection proceedings.
While parties can still utilise agreed minutes of programming directions to resolve objections, where those directions relate to exploration licences, parties will need to be mindful that they will not be able to resolve a matter by consent if their proposal contemplates the excision of part of a block or blocks unless a relevant exception set out in the Mining Act applies.
Parties to objection proceedings should also consider whether the imposition of No Mining Conditions or Approval Conditions might protect their interests which otherwise would have been protected by excising areas of land. If including No Mining Conditions or Approval Conditions, parties should seek legal advice to ensure the Minister has the power to impose the specific conditions that they propose.
Mining Amendment Bill 2022
Separately, on 27 October 2022, the Mining Amendment Bill 2022 was passed by the Western Australian Parliament. The amendments to the Mining Act made pursuant to that bill include:
- the adoption of GDA2020, which is the new geometric datum to replace the old GDA94, with the purpose of ensuring accuracy of location information;
- changes to the requirements associated with a mining lease conversion application, such that marking out requirements can be dispensed with temporarily in certain circumstances; and
- the insertion of a provision which contemplates the payment of a prescribed fee by a party which lodges an objection. The fee has not yet been prescribed and will require an amendment to the Mining Regulations 1981 (WA) in due course.
Those amendments came into force at the beginning of November 2022.