A handful of recent high profile decisions by Australian
courts and regional governments 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.
*Conversions made October 2016