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Mallesons Stephen Jaques
Who does this affect?

Mining companies, landowners and others involved in proposed mining activities in NSW.

What do you need to do?

Carefully scrutinise proposed access arrangements and allow sufficient project time to obtain access arrangments on satisfactory terms. Notify all owners of registered interests in the land, not just the land owner. Anticipate more formality and a different approach being applied to mining decisions in the Land and Environment Court.

Author
Rebecca Dixon  
Senior Associate
Debra Townsend  
Partner
T +61 2 9296 2341

Access arrangements under the Mining Act: the Caroona Project experience - 13 August 2009

The Mining Warden recently reviewed an access arrangement determined by an arbitrator and allowed exploration activities by Coal Mines Australia Pty Ltd (CMAL) to proceed in the Caroona region of NSW. We investigate the significance of this decision for exploration licence holders seeking access arrangements with landholders pursuant to section 142 of the Mining Act 1992 (NSW).

First of all, the decision confirmed that notice of the intention to seek an access arrangement must be given to registered mortgagees, and by implication also other holders of a registered interests in the land. Secondly, the Mining Warden found that except in very limited circumstances there was no power to refuse an access arrangement.

In the future these decisions will be made by the Land and Environment Court. The Land and Environment Court has taken a very different approach on similar issues. It is possible that the Land and Environment Court’s approach will, over time, mean that it is more difficult to obtain an access arrangement and arrangements which are determined may include more onerous conditions for miners.

This alert also outlines the significant changes to jurisdiction over mining matters in NSW that have now commenced. As of 7 April 2009, all proceedings relating to mining matters under the Mining Act 1992 (NSW) and the Petroleum Onshore Act 1991 (NSW) must be commenced in the Land and Environment Court of NSW.

The facts

On 12 April 2006 the Minister for Mineral Resources granted an exploration licence to CMAL, which incorporated land owned by four landholders in the Caroona region of NSW. Access arrangements between CMAL and each of the landholders pursuant to section 142 of the Mining Act were not reached. The landholders did not want CMAL entering their properties and drilling exploratory holes. An arbitrator was subsequently appointed and a final determination was made on 15 November 2008. The landholders brought proceedings in the Mining Warden’s Court under section 155 of the Mining Act seeking review of the arbitrator’s decision.

A key issue

A key issue for the Court to determine was whether a section 142(1) notice given by a licence holder to a landholder required notice to be given to a registered mortgagee. Section 142(1) of the Mining Act provides that an exploration licence holder may, by written notice to each landholder of the land concerned, give notice of the holder’s intention to obtain an access arrangement. Each property in the dispute was subject to a mortgage in favour of a bank. The landholders argued that since no notice was given to the relevant mortgagees, the arbitration was invalid.

The decision

The Mining Warden held that:

  • The Mining Warden’s Court (now the Land and Environment Court) has no power to refuse access to a holder of an exploration licence, except in very limited circumstances which were not relevant here. This is despite the fact that section 149 of the Mining Act expressly contemplates that the arbitrator has a discretion to refuse access.
  • A section 142 notice given by a licence holder to each landholder must also be given to registered mortgagees. This means that any registered mortgagee ought to be notified under the provisions of section 142.
  • However, a failure to notify mortgagees under section 142 does not invalidate an arbitration and a section 155 appeal. The Court considered that the mortgagees in the dispute were banks, and nothing had been put to the Court as to any concern the relevant banks may have as a result of not receiving notices. There is a real question about whether a similar approach will be taken by the Land and Environment Court.

Significant changes to mining jurisdiction

As of 7 April 2009, all proceedings relating to mining matters under the Mining Act 1992 (NSW) and the Petroleum Onshore Act 1991 (NSW) must be commenced in the Land and Environment Court of NSW.

All civil proceedings have been allocated to a newly created Class 8 of the Land and Environment Court’s jurisdiction. These are heard and determined by a Judge of the Court, one or more Commissioners, or a Judge assisted by one or more Commissioners. All criminal proceedings have been allocated to the existing Class 5 of the Land and Environment Court’s jurisdiction and are determined by a Judge of the Court.

In the past, proceedings in the Mining Warden’s Court have been relatively informal, often not involving legal representation. More formality is anticipated in the Land and Environment Court. It is anticipated that the Land and Environment Court may, over time, take a different approach on mining matters.

This publication is only a general outline. It is not legal advice. You should seek professional advice before taking any action based on its contents.