The Crown Minerals (Permitting and Crown Land) Bill was recently introduced to Parliament.  Its introduction follows the discussion paper on the reform of the Crown Minerals Act 1991 ("CMA") released by the Ministry of Economic Development in March this year. 

The purpose of the Bill, which is also to become the purpose of the CMA, is to promote prospecting for, exploration for, and mining of Crown owned minerals for the benefit of New Zealand by providing for:

  • the efficient allocation of rights to prospect for, explore for, and mine Crown owned minerals; and
  • the effective management and regulation of the exercise of those rights; and
  • a fair financial return to the Crown for its minerals.

The Bill, which amends the CMA, the Conservation Act 1987, the Continental Shelf Act 1964, Reserves Act 1977, and the Wildlife Act 1953 is intended to be split into 5 separate bills at the Committee of the Whole House stage of the legislative process.

The Bill imports many of the themes covered in the March discussion paper including the introduction of a new two-tier permitting regime.  All petroleum permits and permits for other minerals (where set thresholds are met) will require Tier 1 permits, while permits for minerals where the threshold is not met will require Tier 2 permits.  This allows the smaller scale/lower value operations to be subject to less stringent reporting and administrative activity when compared to Tier 1 permits.

Further amendments see the maximum permit period for petroleum exploration extended to 15 years (others remain at 10 years), with relinquishment obligations able to be imposed on the permit holder.

Other amendments cover matters such as permit revocation (there is now more scope for the Crown to revoke), a narrowing of the ministerial consent for dealings, distinction between permit holders and operators, the introduction of strata permits, and the ability for the Minister to change a petroleum mining permit work programme if it is necessary to maximise economic recovery.

The Bill will also see changes to the permit application process, including the requirement for Tier 1 exploration permit applicants to satisfy the Minister of their health and safety capacity and systems.

In addition to the Bill, the applicable royalty rates are under review and will be released shortly for consultation, as well as new minerals programmes for petroleum and minerals.  These programmes will provide further context for the proposed amendments, and will also give effect to many of the amended provisions. 

The transitional provisions provide for existing permit holders to be transitioned into the new regime and therefore the Bill is important to both existing and future permit holders. 

The Bill has passed its first reading and has been sent to the Commerce Select Committee.  Submissions on the Bill close on 2 November 2012, with the Select Committee due to report back on 30 January 2013.  The Bill, and information on how to make a submission, can be accessed here.