Mining & Petroleum Law – NSW legislative changes update #1

Renewal application for exploration licences: onus to justify larger than default area shifts to applicant

On 1 March 2016 the Mining and Petroleum Legislation Amendment (Harmonisation) Act 2015 (NSW) (Harmonisation Act) commenced by proclamation (except Schedule 2(23) which commenced on 18 December 2015). The Harmonisation Act forms part of a suite of 5 Acts, the object of which is to reform the regulation of resource exploration and production in NSW.

Mining – 50% reduction of area on renewal of exploration licence

New section 114A of the Mining Act 1992 (NSW) (Mining Act) alters the power of the decision-maker in relation to renewal applications for exploration licences. Previously, the area sought to be renewed could not exceed half of the original licence area unless the decision-maker was satisfied that special circumstances existed that justified the renewal of a larger area.

Under the changes, the renewal area is set at a default size of not exceeding half the original area. The onus is put on the applicant to claim that special circumstances exist that justify granting a renewal over more than half of the original area. What amounts to special circumstances is not exhaustively described but can include consideration of any partial cancellation of the exploration licence requested by the licence holder.

Petroleum – 25% reduction of area on renewal of exploration licence

The Harmonisation Act aims to streamline administrative arrangements and bring the Mining Act and Petroleum (Onshore) Act 1991 (NSW) (Petroleum Act) into closer alignment. New section 19B of the Petroleum Act sets the default area for renewal applications not exceeding 75% of the original area granted or the previous renewal area granted. Similar to the Mining Act changes, the onus is on the applicant to claim that special circumstances exist that justify granting a renewal over an area exceeding 75%.

Why is this important?

The applicant now plays a more pivotal role in justifying the renewal of exploration licences for greater than the default area. If the applicant makes no claims of special circumstances, it is likely that the renewal will be no greater than 50% of the area for mining exploration licences and 75% for petroleum exploration licences. Particular care will need to be taken when settling renewal applications to ensure that a satisfactory and compelling description of the special circumstances is included.

Please contact William Oxby, Partner, Brisbane, +61 7 3258 6469, if you require additional information or your usual Herbert Smith Freehills contact.