The Queensland government has announced that a new competitive cash bidding process will apply to companies seeking the right to explore on highly prospective coal, petroleum and gas resources tenements.
Minister for Natural Resources and Mines Andrew Cripps said ‘through competitive cash bidding, companies will bid for the right to explore highly prospective land made available through tender and a ‘preferred tenderer’ will be indentified through a rigorous assessment process.’
The changes will be significant for coal and petroleum proponents – coal miners will no longer be able to rely on the first in first served process that has governed the grants of permits thus far, whilst the new regime will arguably add another condition to the usual tender process for petroleum explorers, where explorers will need to nominate a price they are willing to pay to secure the exploration rights of a particular tenement.
The Queensland Resources Council has previously resisted moves towards an auction system, citing the disadvantages to smaller miners that often operate on smaller budgets because of the high risk nature or their prospecting activities. A cash bidding process, whilst raising more revenue for the government, is also likely to benefit the larger coal producers, who will be able to draw on more funding and equity in any competitive process with smaller miners.
Further information from the government is expected as to what will constitute ‘highly prospective’ tenements for the purpose of this process.