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The information contained in this fact sheet is current as at 25 September 2006.

Topic 4- Natural Resources

4.1 Mining

Mining in New South Wales is regulated by the Mining Act 1992, the Petroleum (Submerged Lands) Act 1982 and the Petroleum (Onshore) Act 1991. In addition to the approvals required under these laws, mining activities may require:

• environmental impact assessment;[1]
• development consent;[2] and
• a pollution licence.[3]

For more information on environmental assessment, development consents and pollution laws, see Topic 2 – Planning and Development and Topic 3 – Pollution.

Mineral exploration, assessment leases and mining leases must be approved by the Minister for Primary Industries.[4] Mining approvals allow mining on public land and privately owned land, even if the mining company does not own the land.

4.1.1 Mining Approvals

Under the Mining Act, the Minister can issue:

• exploration licences;[6]
• assessment leases;[7]
• mining leases;[8]
• mineral claims;[9] and
• opal prospecting licences.[10]

Titles granted by the Minister under the Petroleum Act include:

• exploration licences[11];
• assessment leases[12];
• special prospecting authorities[13]; and
• production leases[14].

4.1.1.1 Exploration Licences

An exploration licence allows the licence holder to prospect in a defined 'exploration area' for particular minerals. Prospecting is defined to include carrying out works or removing samples from land to test any minerals present[15].

Exploration licences are valid for a maximum of five years.[16] The Minister has general control over the size of the land covered by an exploration licence [17] and also the conditions imposed on the exploration licence.[18]

Exploration licences can be sought:

• by application[19] or
• by tender[20],

Prospecting does not require a development consent. However, if the proposed prospecting activity is likely to significantly affect the environment, the Minister must consider an environmental impact study before granting an exploration licence.[21]

4.1.1.2 Assessment Leases

Assessment leases give leaseholders the right to prospect in a defined area for up to five years.[22]

Assessment leases are only available by application, not by tender. Applications for assessment leases must specify which minerals the application relates to and the details of any marketing program or environmental study the applicant proposes to carry out.[23] The applicant must also provide details of (amongst other things) the financial resources and technical advice available to them.[24]

The Minister must notify government agencies that may be 'materially affected' by a decision to grant an assessment lease[25]. The Director-General of Planning and local councils within the area of the proposed lease must also be notified[26]. Public authorities may object to the lease if there are major proposals for another use of the land[27].

Prospecting does not require a development consent. However, if the proposed prospecting activity is likely to significantly affect the environment, the Minister must consider an environmental impact study before granting an assessment lease.[28]

4.1.1.3 Mineral Claims

Mineral claims are usually granted in a 'mineral claims district' to explore and extract minerals on a small scale.[29] At present there are two mineral claims districts in New South Wales : White Cliffs and Lightning Ridge[30].

Mineral claims can only be granted over small claims (less than two hectares) for a limited period (less than five years).[31] Larger operations, for example, those using mechanical means to extract minerals or those occupying more than two hectares, must have an exploration licence.

4.1.1.4 Mining Leases

Mining leases give leaseholders a right to prospect and mine in a defined area. An application for a mining lease can be made and a mining lease may be granted over land of any title or tenure (freehold, leased land), including the surface and subsurface of the land.[32] Applications for mining leases must specify, amongst other things, what minerals will be mined.[33] Conditions which regulate the mining operation can be included in the lease.[34] These can include conditions relating to the way mining operations are conducted, the giving of security, transport of minerals, treatment of minerals and the use to which the minerals may be put. Mining leases usually last for up to 21 years[35].

Notification Requirements

Before granting a mining lease under the Mining Act, the Minister must notify:

• any government agencies that may be 'materially affected' by the lease [36];
• the Director-General of Planning[37];
• the Dams Safety Committee[38];
• local councils within the area of the proposed lease;[39] and
• the general public[40].

Public notice of the grant or renewal of any mining authority must be published in the Government Gazette.[41] This notice must include a description of the applicant, a description of the land affected and state that objections must be made in writing to the Minister within 28 days of publication of the notice[42].

In addition, the Minister must notify landholders of the land affected by a mining lease that extends to the surface of the land.[43] If the land is agricultural land, the landholder is entitled to object on that basis to the granting of the lease or the inviting of tenders. Such landholders must give written consent before the Minister may grant the lease[44].

Development Consent

The applicant must obtain a development consent before a mining lease can be granted, if a development consent is required under the relevant environmental planning instrument.[45] For more information on environmental planning instruments, see Topic 2 – Planning and Development.

Mining is the only industry in which a private company can apply to develop another person's land without their consent. In other industries, developers usually have to get the landowner's consent before lodging a development application.

If a mining company applies for a mining lease without a development consent and the Minister for Primary Industries notifies the company that a development consent is necessary, the company can apply for one without the owner's consent.[46]

Mining laws in New South Wales reflect a systematic bias towards resource development, at the expense of the environment. It is instructive to note that New South Wales mining laws contain no reference to ecologically sustainable development, notwithstanding that they were passed at the precise moment in time that the logic and principles of ecologically sustainable development were being adopted into policies, strategies and legislative frameworks across Australia .

For mining leases that were granted before the commencement of the Environmental Planning and Assessment Amendment (Infrastructure and Other Planning Reform) Act 2005 on 1 August 2005, any conditions attached to the development consent relating to preparing the land for mining, mining methods, rehabilitating the land, mining safety, and security (known as “special purpose conditions”) are void and the consent is taken to have been granted free of those conditions.[47] Only the Minister for Primary Industries may attach such conditions to the lease[48]. However, for all mining leases granted after 1 August 2005 the mining company will be required to comply with all conditions of development consent as well as the conditions of the mining lease.

Prohibited Mining Development

An environmental planning instrument, such as a local environmental plan, may classify mining as a prohibited development. However, even if mining is a prohibited activity under an environmental planning instrument, mining may still be permitted for one of a number of reasons.

Firstly, if the mining activity was being lawfully carried out before the environmental planning instrument commenced, the activity may be allowed to continue under ‘existing use rights'.[49]

Secondly, the prohibited mining activity may be allowed if the Minister for Planning decides to ‘call in' the mine, making him or herself the consent authority.[50] In this case, the relevant local council may request that a Commission of Inquiry be held before the Minister can grant development consent.[51]

Thirdly, State Environmental Planning Policy No. 45 – Permissibility of Miningmodifies the effect of other environmental planning instruments by allowing consent to be granted for mining activities, even if the development would otherwise be prohibited.

For example, under the Illawarra Regional Environmental Plan No. 1, the consent authority cannot grant development consent for a new coal mine unless an environmentally acceptable transport method for the development can be integrated into a comprehensive system for handling all coal movements within the region[52]. State Environmental Planning Policy No. 45overrides the provisions of the regional plan by allowing consent to be granted even if these provisions have not been satisfied[53].

Environmental Assessment

If development consent or approval from the Minister for Planning is not required under Part 4 or Part 3A of the Environmental Planning and Assessment Act 1979, the Minister must still assess the environmental impacts of the mining activity under the provisions of Part 5 of the Environmental Planning and Assessment Act 1979.

The Minister must take into account the environmental impacts of the mining activity. If the activity is likely to have a significant impact on the environment, the proponent must prepare an Environmental Impact Statement.[54]

If the activity is likely to have a significant impact on a listed threatened species, the proponent must prepare a Species Impact Statement.[55]

For further information on environmental assessment law, see Topic 2 – Planning and Development.

Protection of Agricultural and Improved Land

The Mining Actprovides a degree of protection for agricultural land. Owners and occupiers of private land, or crown land under a pastoral lease, may object to a mining claim over the surface of the land if their land is agricultural land.[56] The Director-General of the Department of Primary Industries decides whether land is 'agricultural land' according to factors listed in Schedule 2 of the Mining Act.[57]In relation to mining leases, as noted above, landowners may object to the grant of a mining lease over their land on the basis that it is agricultural land. If such an objection is sustained, the lease must not be granted without the consent of the landholder.[58]

In relation to explorations licences and assessment leases, the Mining Actalso provides protection for 'improved land', which includes:

• land within 200 metres of a house or 50 metres of a garden, and
• a building, dam, reservoir, contour or graded bank, water disposal area, soil compensation work or other valuable structural work.[59]

People who occupy improved land must consent before holders of exploration licences or assessment leases can start work that will affect that land[60].

Environmental Protection

Part 11 of the Mining Act contains provisions directed at the protection of the environment.

First, when deciding whether to grant an authority (including an exploration licence, assessment lease or mining lease) or mineral claim, the Minister must take into account the need to conserve and protect flora, fauna, fisheries, scenic values and Aboriginal or other cultural heritage values.[61]

Second, the Minister may impose conditions on mining authorities relating to environmental protection or conservation.[62] The conditions imposed may require the holder of the lease or licence to rehabilitate land that is damaged or adversely affected by mining.[63]

Finally, the Minister may direct a person to comply with the environmental protection conditions[64]. If those steps are not taken, the Minister may carry out the works at his expenses and then seek recovery of those costs as a debt due to the Crown[65].

Compensation

Landowners may be entitled to compensation if mining affects their farming activities or their land.[66] Landowners and occupiers who are unable to reach agreement with the mining company may apply to the Mining Warden for compensation. The maximum compensation available is the market value of the land, including the value of buildings, structures or other works.[67] A party who is dissatisfied with the Mining Warden's decision can appeal to the District Court.[68]

Compensation may also be available for damage to improvements and household items caused by subsidence from underground coal mining under the Mine Subsidence Compensation Act 1961.[69] Subsidence occurs where land collapses or sinks due to underground mining operations.

Mining companies usually try to make private arrangements with landowners. Companies may offer to buy the land needed for mining at twice the market value. Although this appears generous, landowners may be disadvantaged if the property market is depressed, because they are not able to choose the time to sell. Landowners must also consider the cost of buying another property, including moving, loss of income during the move and stamp duty.

References

1. Environmental Planning and Assessment Act 1979, s. 112.
2. Environmental Planning and Assessment Act 1979, s. 76A.
3. Protection of the Environment Operations Act 1997, s. 43.
4. Mining Act 1992, s. 13(4), s.41 and s.63
5. Mining Act 1992, s. 24.
6. Mining Act 1992, s. 13.
7. Mining Act 1992, s. 41.
8. Mining Act 1992, s. 63.
9. Mining Act 1992, s. 190.
10. Mining Act 1992, s.228
11. Petroleum (Onshore) Act 1991 s.29
12. Petroleum (Onshore) Act 1991 s.33
13. Petroleum (Onshore) Act 1991 s.38
14. Petroleum (Offshore) Act 1991, s.41
15. Mining Act 1992, Dictionary
16. Mining Act 1992, s. 27.
17. Mining Act 1992, s. 25
18. Mining Act 1992, s. 26.
19. Mining Act 1992, s. 13.
20. Mining Act 1992, ss. 14 & 15.
21. Environmental Planning and Assessment Act1979, s. 112.
22. Mining Act 1992, s. 45.
23. Mining Act 1992, s. 33.
24. Mining Act 1992, s. 33 (3)(c) &(d)
25. Mining Act 1992, s. 41(3) and Schedule 1 clause 1(1)(a)
26. Mining Act 1992, Schedule 1 cl.1(1)(b) & (c)
27. Mining Act 1992, Schedule 1 cl.2
28. Environmental Planning and Assessment Act1979, s. 112.
29. Mining Act 1992, s. 173.
30. Government Gazette No.101 of 20.8.1992 pp5948 and 5949
31. Mining Act 1992, s. 175.
32. Mining Act 1992, s. 68
33. Mining Act 1992, s. 51.
34. Mining Act 1992, s. 70.
35. Mining Act 1992, s. 71.
36. Mining Act 1992, Schedule 1 cl.5
37. Mining Act 1992, Schedule 1 cl.6
38. Mining Act 1992, Schedule 1 cl.7
39. Mining Act 1992, Schedule 1 cl.13 if development consent required or otherwise cl.17
40. Mining Act 1992, Schedule 1 cl.24
41. Mining Act 1992, Schedule 1 cl.24(1)
42. Mining Act 1992, Schedule 1 cl.24(2)
43. Mining Act 1992, s.81 and Schedule 1 cl.21
44. Mining Act 1992, Schedule 1 cl.23(1)
45. Mining Act 1992, s. 65(2)
46. Mining Act 1992, Schedule 1 cl.14
47. Mining Act 1992, s. 65(3)(a)&(b)
48. Mining Act 1992, s.70
49. Environmental Planning and Assessment Act 1979, s. 106 and 107.
50. Environmental Planning and Assessment Act 1979, s. 89.
51. Environmental Planning and Assessment Act 1979, s. 89(3).
52. Illawarra Regional Environmental Plan No. cl 37
53. State Environmental Planning Policy No.45 s5
54. Environmental Planning and Assessment Act 1979, s. 112.
55. Environmental Planning and Assessment Act 1979, s. 112(1B).
56. Mining Act 1992, s. 179 and 187
57. These factors include whether the land has been sown with annual species, has shade, shelter or windbreak trees growing, or whether pasture production is maintained at levels substantially above normal.
58. Mining Act 1992, Schedule 1 cl.23
59. Mining Act 1992, s.31 and s.49
60. Mining Act 1992, s.31 and s.49
61. Mining Act 1992, s.237
62. Mining Act 1992, s.238
63. Mining Act 1992, s.239
64. Mining Act 1992, s.240
65. Mining Act 1992, s.241 & 242
66. Mining Act 1992, Part 13 Division 1.
67. Mining Act 1992, s. 272(1)(c).
68. Mining Act 1992, s. 278.
69. Mine Subsidence Compensation Act 1961, s. 12.

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