A substantial number of the miscellaneous licences applied for in Western Australia are for the purpose of searching for groundwater. These miscellaneous licences (Search Licences) are generally large in area and as they do not authorise the taking of groundwater, the infrastructure that is typically constructed on such licences is limited to temporary bores.
Given their size, these Search Licences commonly overlap a number of tenements and may therefore require the negotiation of a number of different access agreements. However, special consideration should be given to whether standard access arrangements are indeed suitable for Search Licences due to the specific characteristics mentioned above.
Access agreements generally
As part of the process of grant of overlapping mining tenements, the holders of the relevant mining tenements often negotiate and sign access agreements to govern their respective activities on the overlapping area.
Access agreements usually contain obligations on the holders to cooperate, avoid interference with the other party’s activities and to comply with the applicable laws when conducting activities on the overlapping area. Other common provisions include an indemnity against loss arising from each party’s activities on the overlapping area, a relocation requirement (see comments below) and a dispute resolution mechanism.
While these common provisions would be appropriate in many circumstances, they should always be considered in light of individual circumstances to ensure that they are suitable.
Requirement to relocate
In many standard access agreements, the applicant for the new tenement is required to relocate its infrastructure or to pay for the relocation of the existing tenement holder’s infrastructure. This is used as the ultimate resolution of any material conflict between the parties’ activities. These provisions draw from a widely accepted view in Western Australia that priority should be given to the party that is “first in time” and consequently the costs of relocation are borne by the party that is “second in time”.
Where a Search Licence is concerned, the requirement on the other party to relocate its infrastructure or go through a lengthy relocation process and relocate the Search Licence infrastructure is often not appropriate. For instance, given the temporary nature of bores constructed on Search Licences, the conflict of activities would not usually extend for such a period of time for relocation to be appropriate. Further, it is not commercially reasonable to expect that more substantial infrastructure, once constructed, should be able to be relocated to accommodate a test bore on the Search Licence.
Inclusion of subsequent tenements
When considering whether or not to include relocation provisions care must be taken to also consider the related issue of whether the access agreement will apply to substitute or successive tenements. Access agreements often do apply to subsequent tenements, being mining tenements that are granted in conversion or substitution of the tenements which are originally the subject of the agreement. For example, such a provision means that an access agreement relating to an exploration licence would continue to apply if the exploration licence was later converted to a mining lease.
In the case of a Search Licence, there is no strict conversion process but rather a new and separate miscellaneous licence must be obtained for the purpose of the taking of water. This miscellaneous licence to take water is usually in respect of a small portion only of the original Search Licence. At that point more substantial water infrastructure would be expected to be installed and the whole issue of relocation requires further consideration in light of the new circumstances. Consequently, in most instances it would be appropriate to expressly exclude these subsequent miscellaneous licences from the operation of the agreement and to reopen negotiations again, if and when a further miscellaneous licence is sought which still overlaps the particular underlying tenement.
AMPLA Model Access Deed
On 28 October 2013, the Australian Mining and Petroleum Lawyers Association (AMPLA) released a new model document, the Model Access Deed, which is drafted specifically for projects in Western Australia. The Model Access Deed was drafted by a committee of Western Australian legal practitioners, including Claire Boyd and the author of this article, in an effort to ensure that the document reflects the Western Australian industry norms.
The Model Access Deed is the first of a series of access related documents planned by the Western Australian State Branch of AMPLA and the Model Access Deed was drafted for the common circumstance of an application for a prospecting licence or exploration licence over the area of an existing miscellaneous licence.
While the Model Access Deed provides a good example of the provisions that are often seen in access agreements, it cannot cater for all individual circumstances, such as the considerations mentioned above in relation to Search Licences. Accordingly, depending on the particular characteristics of a project, standard clauses such as those contained in the Model Access Deed may have unintended implications and should only be used with thoughtful consideration.