Australian legislators tighten up on miners

By IM Staff
Published: Friday, 21 October 2016

Some recent legal and political decisions in Australia threaten to undermine the country’s reputation as a mining Mecca.

By Rose Pengelly

A handful of recent high profile decisions by Australian courts and regional governments that have gone against mining and energy companies have raised concerns within Australia’s resources sector that the famously mining-friendly nation may be revising its allegiance to the industry.

In May this year, the New South Wales (NSW) Land and Environment Court (LEC) ruled in favour of landholders seeking to block access to the proposed 3m tpa Hume Coal project being developed in NSW’s Southern Highlands by South Korean steelmaker, Posco. The ruling could have serious ramifications for mining and exploration projects across the state, which include zirconia, rare earths, limestone and mineral sands developments, by giving landholders the power to stop exploration on their land.

In September, the neighbouring state of Queensland enacted a new Mineral and Energy Resources law designed to make it easier to object to resource projects in the state.

Under the legislation, parties with conflicting interests in mining areas, such as community groups, environmentalists and farmers, can challenge plans for resources projects and associated infrastructure by taking their case to the Queensland Land Court (QLC). Regulators claim that the law is balanced by provisions that will allow coal and coal-bed methane projects to be co-developed more efficiently.

The new Queensland regulation was an amended version of a law passed by the state’s Liberal coalition government in 2014, which was intended to make it difficult for interest groups to oppose resource developments by blocking their access to the QLC. The election of the Queensland Labor party later that year saw the passage of amendments re-establishing civil rights to object to resources projects.

Although Queensland’s resources industry has welcomed provisions in the law streamlining the co-development of mining and energy projects, some companies fear that the law will lead to more litigation and subsequent development delays.

Queensland, which is dominated by coal and gas but also hosts some significant mineral sands, bauxite and silica sand projects, has been more accommodating to the mining and energy industries than NSW, but the revised Mineral and Energy Resources law indisputably puts more power in the hands of landowners.

In Western Australia (WA), home of Australia’s iron ore industry as well as its burgeoning lithium sector and several mineral sands and rare earths operations, jurisdictional anxiety has centred more on tax issues than land-use conflicts. The leader of the government’s minority WA National Party, Brendon Grylls, recently called for the current resource rental tax paid by iron ore miners to be increased from A$0.25/tonne ($0.19) to A$5/tonne.

WA’s Agent General in Europe, John Atkins, told IM that Grylls’ pre-election proposal has been roundly rejected by the state’s Liberal-National coalition government, as well as the leader of the opposition. "I don’t see any changes [to the legislative environment in WA] coming through any time soon," he said, insisting that WA remains an "extremely stable" mining jurisdiction.

But calls to increase taxes on mining companies in WA continue to gain media attention and minerals such as lithium, which has seen a price increase of more than 200% in the last year, could attract steeper royalties if these proposals gain traction. Atkins thinks this is "unlikely", however the issue refuses to go away. WA is due to hold a state election in March 2017, with the Liberal-National coalition currently facing low popularity ratings over its recent handling of state finances and Atkins told IM that he could "not commit to any future decision on royalties".

A longer arm of the law?

Although it is early to identify a trend, Australia’s once all-powerful mining lobby appears be losing some of its influence as community opposition to developments increases and Australian policymakers look to diversify the country’s resource-reliant economy in the wake of low commodities prices.

Speaking of the NSW LEC decision, Tristan Orgill, a researcher working for Justice Brian Preston, the judge who ruled against Hume Coal in May, said it is possible that the Hume case could sway judgments in other parts of Australia. "Judgments of the LEC of NSW are not binding on courts in other states, however, they can be persuasive," he told IM. "There are a number of instances where courts and tribunals in other states dealing with environmental matters have followed an LEC decision."

In Hume, the case turned on what could legally be considered as a "significant improvement" made by the landowner to areas earmarked by a resource developer. The term is defined under the NSW 1992 Mining Act as "any substantial building, dam, reservoir, contour bank, graded bank, levee, water disposal area, soil conservation work or other valuable work or structure".

In addition to the breadth of the category, what caused particular consternation for the resources sector in the Hume case was the fact that the judge determined that a "significant improvement" can trigger a land owner consent requirement any time before the exploration licence holder proposes to use the land, even after access arrangements have been agreed.

Mining firms have called for changes to the NSW 1992 Mining Act to clarify the issue, but so far no action has been taken.

However, resources businesses continue to represent some of the biggest earners and employers in the Australian economy and still exercise considerable clout when it comes to how relevant legislation is drawn up. In addition, not all of the mining sector’s friends have deserted it. In October, Australia’s resources minister, Queensland senator Matt Canavan, lashed out at "green" activists for their alleged "abuse" of the country’s mining system by using the courts to delay projects.

Canavan and others have called for Australian environmental and mining laws to be reviewed to stop such "abuses" continuing. If this takes place, changes could go either way for miners and perhaps more importantly, could shake the perception of Australia’s legislative stability.



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