The Mining Act Amendment Act 2012 (WA) (Amendment Act) received royal assent on 29 November 2012 and came into full force on 2 February 2013.
The Amendment Act aims to enhance the effective operation of the Mining Act 1978 (WA) (Act) and is the outcome of a statutory review (required by section 162 of the Act) of the operation and effectiveness of the Mining Amendment Act 2004 (WA).
While a number of the amendments to the Act are merely administrative refinements, the Amendment Act also makes the following significant amendments:
- the compulsory surrender requirement for an exploration licence has been moved from the end of the fifth year of the licence to the end of the sixth year;
- the definition of “mining operations” has been expanded to include emerging forms of mining operations which were previously unregulated;
- enables applicants for a mining lease to lodge a ‘resource report’ in support of their application;
- permits mining on “Commonwealth Land”; and
- removes the requirement to mark-out a miscellaneous licence.
These significant amendments are discussed in more detail below.
Exploration Licences – compulsory partial surrender
The Amendment Act moves the compulsory surrender requirement for an exploration licence to the end of the sixth year of the term (s.65 Act). Previously, the compulsory surrender requirements applied from the fifth year of the term of the exploration licence. The one year compulsory surrender deferral option was made obsolete as a result of these amendments and, as such, was deleted.
In addition, following consultation with industry, compulsory surrender requirements will only apply to exploration licences granted in respect of more than 10 blocks – an increase from the previous 1 block (s.65 Act). Further, the number of maximum discrete areas remaining following a compulsory surrender will be increased from three to six areas (s.65 Act).
Holders of exploration licences granted as a result of an application made before 10 February 2006 will not be affected by the changes.
The definition of “mining operations” has been widened to ensure that the definition will include combustion, fracking and the processing of mineral resources in situ (s.8 Act). For example, the definition will now capture processes such as underground coal gasification.
Previously there was no legislation to deal with these types of operation in Western Australia and the Amendment Act clarifies that the processing and extraction of conventional gas will be governed by the Act as opposed to petroleum legislation.
Mining Lease Applications
The Amendment Act has amended section 74 of the Act to allow listed companies to lodge a ‘resource report’ in support of a mining lease application instead of a ‘mining proposal’ or an operations statement and mineralisation report. The ‘resource report’ must:
- set out the details of the mineral resources located in or under the land to which the application relates;
- comply with the JORC Code; and
- have been made to the ASX,
The Amendment Act brings Commonwealth land within the jurisdiction of the Mining Act by inserting a definition of “Commonwealth Land” into section 8, amending section 23 and introducing section 25A of the Act. “Commonwealth Land” is defined to include land in respect of which the Commonwealth holds a freehold or leasehold interest or land that is otherwise vested in the Commonwealth.
Mining on Commonwealth Land will be permitted with the consent of the State Minister for Mines and Petroleum (s.25A Act). Prior to granting his or her consent, the State Minister must consult and obtain the concurrence of the Commonwealth Minister responsible for the control and management of that land (s.25A(2) Act).
In addition, for a 3 month transition period, applicants for exploration licences that currently encroach on Commonwealth Land will have priority to apply for a mining tenement the subject of the existing application (cl.18, Schedule 2 of the Act).
The major areas of the State affected by this amendment are the Yampi defence lands and the Lancelin training areas.
The requirement to mark out a miscellaneous licence has been deleted from section 93 of the Act and section 91 of the Act has been amended to broaden the purpose of a miscellaneous licence to mining generally as opposed to the previous ‘mining operations’.
The Amendment Act also makes the following additional amendments to the Act:
- the automatic issue of a hard-copy licence document has been dispensed with (s.116 Act);
- a warden may now declare a direct or indirect interest in a matter to be heard and the parties can then consent to the matter proceeding (s.15 Act). Previously a warden who adjudicated a matter in which he or she had a direct or indirect interest was guilty of a crime. The amendments to section 15 acknowledge that many people, including wardens, have an indirect interest in mining companies through managed superannuation or other funds;
- the time limit for prosecuting an offence under the Act has been extended from 12 months to 3 years (s.106B Act); and
- the penalty provisions in lieu of forfeiture of prospecting, miscellaneous, exploration or retention licences have been increased and higher penalties for corporations have been introduced (s.96 and 96A of the Act).
Conclusion – How you will be affected
Generally, these amendments are largely beneficial to the industry in that they streamline several processes under the Act, open up additional land for mining and provide direct benefits to explorers by softening the compulsory surrender requirements. The amendments are commendable in that they assist mining and exploration in Western Australia and overcome issues with the day-to-day operation of the Act.
We recommend that miners and explorers review their current operations and future project planning and implementation in order to take full advantage of the amendments to the Act.