In a welcome boost for the South Australian economy and the mining industry, the Defence Legislation Amendment (Woomera Prohibited Area) Bill 2014 significantly increases access to the Woomera Prohibited Area for non-Defence purposes such as exploration and mining. The Commonwealth Parliament passed the Bill with the support of both major political parties.
There’s a huge mass of potentially resource rich land in South Australia (124,000 square kilometres of it – roughly the size of England) that has largely been kept under lock and key – the Woomera Prohibited Area. The South Australian Government considers there may be as much as $35 billion of untapped mineral resources in the area, including iron ore, gold, copper and uranium.
Despite this, the restrictive and uncertain nature of the current access arrangements is such that there are currently only 3 mines operating in the area, leaving this unique national asset potentially underutilised.
A 2011 Commonwealth Government Review recommended that, whilst Defence should remain the primary user of Woomera, the area should be opened up wherever and whenever possible for resources exploration and mining.
The Review recommended dividing Woomera into ’zones’. The ‘red’ zone is held by Defence exclusively. The ‘amber’ and ‘green’ zones, which are only used periodically by Defence, will be inaccessible by non-Defence users for 140, 70 or 56 pre-determined days per year depending on the location. The ‘green’ will be by far the largest zone.
So what does the Bill provide for?
The amendments give a broad power to the Defence Minister, with the agreement of the Industry Minister, to make ’Rules’ about the use of Woomera. The Rules will be the gateway for access to the area, but are yet to be made.
Being in Woomera without permission will be an offence.
The Defence Minister will also have the power to suspend a permission for the ’defence’ of Australia. Potential permit holders will need to weigh up the risks arising from the availability of this power. Whether the power may be exercised only in circumstances of a material threat or on some lesser grounds (such as strategic training operations) will hopefully be clarified in the Rules.
Existing access arrangements (including for Indigenous landholders and established mining operations) will continue to apply. Existing users will also be able to apply for a permit under the Rules. This would give them the certainty created by the new framework including capped and predetermined exclusion periods.
What does it all mean?
Some of the large deposits at Woomera form part of the same geological formations that underpin Olympic Dam, allowing explorers to ride on the coat-tails of the geophysical work which has already been done in the area as well as positioning themselves for some interesting future synergies.
The amendments could present a once in a lifetime opportunity to lock down exploration rights which have never previously come to market.
There’s still uncertainty about how the Rules will interact with the South Australian Mining Act requirements (we’ll have to wait until the Rules are made to see how these are dealt with), but both levels of government will be incentivised to remove any uncertainty that acts as a barrier to investment.