The NSW Mining Act provides that the holder of a mining lease must pay a royalty to the Minister on minerals recovered under the lease which are “publicly owned minerals”. The term “minerals” includes copper and gold. A “publicly owned mineral” is defined as “a mineral that is owned by, or reserved to, the Crown”. If the minerals recovered are privately owned the lessee is nevertheless liable to pay royalty as if they were publicly owned but the Minister must pay seven-eighths of the royalty to the owner of the minerals.
A miner extracted both copper and gold from its mining leases and sought repayment from the Minister of seven-eighths of the royalty it had paid with respect to the value of copper extracted from those leases. The Minister refused on the basis that copper was a “publicly owned mineral”.
The High Court examined the law prior to the colony of NSW being established. The Court held that at the time the common law was received in the colony of NSW and therefore well before the time of the grant of the mining leases in this case, the law was that a mine of copper could not be characterised as a “mine of gold” within the scope of the Crown prerogative where copper was mingled with gold in the ore. Therefore under NSW law, copper, even if intermingled with gold, was not a mineral owned by or reserved to the Crown.
The result was that the miner was entitled to the payment of the seven-eighths of the royalty with respect to the copper mined from the mining leases even though the mineral extracted was mixed with gold.