Update - Innovative Resources Tenures Framework, Queensland

On 12 October 2015, Herbert Smith Freehills attended the Queensland Department of Natural Resources & Mines workshop on the Innovative Resources Tenures Framework in Brisbane.
The purpose of the workshop was to discuss the Policy Position Paper, which was released in August 2015.  Submissions in response to the Policy Position Paper close on 30 October 2015.

Key information

The five key pieces of information we took away from the session were:

1. The new tenure framework will decrease the types of tenure available to proponents from 20 to 5, being: 
• Information Authorities,
• Exploration Authorities,
• Development Authorities,
• Production Authorities, and 
• Infrastructure Authorities. 


This is intended to create a less complex system which will be simpler to regulate with respect to overlapping areas.


2. For exploration authorities, there will be no maximum area size but parties will be required to provide justification for the size of the area applied for.
3. Default relinquishment will be 50%.  However, there will be potential for reduced or deferred relinquishment based on the performance of the proponent.
4. Feedback received by the Department indicates that the systems for production authorities and infrastructure authorities work well and there will be minimal changes to how these are regulated.
5. Companies will be required to review their native title agreements to ensure native title processes are not triggered under the proposed changes.

Next steps

There will be further consultation and opportunities for feedback as the reforms progress through the following stages:

• a regulatory impact statement due to be released in early 2016,
• the consultation Bill which will be introduced to Parliament (no timing given), and
• the Parliamentary Committee process during the passage of the Bill.

Timing

The Department indicated that it is hopeful that the transitional arrangements for exploration authorities will be prepared in late 2015, with full implementation of the reforms to be completed by the end of 2017.

Please contact William Oxby, Partner, Brisbane, +61 7 3258 6469 or Cassandra Duffy, Solicitor +61 7 3258 6456 if you require additional information or your usual Herbert Smith Freehills contact.

Mining and petroleum tenure reform in Queensland

Material changes are proposed to the tenures under which minerals and petroleum are explored for in Queensland. The Department of Natural Resources and Mines recently released a policy position paper titled ‘Innovative resources tenures framework’ (Reform Policy). Consultation with the industry and interested parties is proposed for September and October 2015. Importantly, submissions on the policy position paper are due 16 October 2015.

Separately, we note the recently altered status of the Mineral and Energy Resources (Common Provisions) Act 2014 (Qld). As a consequence of the Mineral and Energy Resources (Common Provisions) (Postponement) Regulation 2015 (Qld) (Regulation), the balance of the Common Provisions Act will automatically commence on 27 September 2016 (if not commenced, amended or repealed beforehand). However, the release of the Reform Policy suggests that the Common Provisions Act will be amended or repealed before 27 September 2016.

The Reform Policy proposes to set maximum terms for exploration licences for minerals and petroleum with no renewals and a default relinquishment of 50% of the area at the prescribed time. Under transitional arrangements (to be developed further after consultation) renewals will be limited in duration, there is capacity to opt-in to the new framework and a change to ‘higher tenure’ may alter timelines and processes for projects to be developed in the short term.

We recommend that these reforms be closely monitored against a company’s matrix of tenure, having particular regard to: relinquishment; any long term retention proposals; and development horizons for projects.

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

Victoria to raise the bar for mining exemptions

The Victorian Minister for Energy and Resources recently introduced the Mineral Resources (Sustainable Development) Amendment Bill 2013 (Vic) (the Amendment Bill) into the Victorian Parliament.

The Amendment Bill, if passed, will likely make it more difficult for land to be declared exempt from exploration and mining licences. The Minister will now be required to consider the value of mineral resources (including coal seam gas) before an exemption is granted.

Under the existing Mineral Resources (Sustainable Development) Act 1990 (Vic) (the Act), the Minister has the power to exempt any land from being subject to a licence granted under the Act (i.e., exploration licence, mining licence, prospecting licence or retention licence). Currently, when deciding whether to grant an exemption, the Minister must take into account ‘the social and economic implications of the decision’.

What will change?
The Amendment Bill would amend the Act so that the Minister would be obliged to take into account ‘the known or potential value of mineral resources on the land and the impact that the proposed exemption may have on that value’ when deciding whether to exempt land from being subject to a licence.

Why?
The amendment has been proposed following recommendations made by the Victorian Parliament’s Economic Development and Infrastructure Committee in its inquiry into greenfields mineral exploration and project development in Victoria (22 May 2013).

In particular, the Committee had recommended that the Victorian Government develops a land use policy framework to better manage competing land uses in Victoria.

Who will be impacted?
The impact of the proposed amendment is likely to make the Victorian mining legislation more conducive to the development of the mineral and extractive resources industries. In doing so, the changes will be of concern to community groups seeking to apply for mining exemptions to prevent exploration and mining (including in respect of coal seam gas) in their local areas.

The Amendment Bill also contains other proposed amendments to the Act which are aimed at reducing the administrative and regulatory burden on industry, including the introduction of statutory time frames for the processing of licence applications and the streamlining of work plan requirements.

For further information, please contact Myra Stirling, Senior Associate, Liam Hickey, Solicitor or your usual Herbert Smith Freehills contact.

Qld: Draft Qld Ports Strategy proposes to concentrate port development in QLD to 5 key port areas

The Queensland Government released its draft Ports Strategy on Thursday 17 October 2013.

The draft Ports Strategy proposes to:

• declare that Brisbane, Mackay / Hay Point (in 2 separate zones), Gladstone, Townsville and Abbot Point ports will be the 5 priority port development areas (PPDAs) in Qld,
• limit port expansion and development to within these 5 PPDAs (by prohibiting capital dredging for deep water port facilities outside the PPDAs) until 2022,
• permit port and terminal expansion and development (including dredging) within the 5 PPDAs via a Government-facilitated staged and incremental expansion process, and
• require PPDA’s to comply with a set of master plan guidelines (the details of which have not yet been released).

The draft Ports Strategy aims to:

• achieve a balance between the ‘twin goals’ of sustainable economic port development and environmental protection, and
• preserve the Queensland Government’s commitment in the GBR Ports Strategy (which is based on UNESCO recommendation) to restrict port development outside Queensland’s established major trading ports within or adjoining the GBRWHA.

The draft implementing legislation is intended to be in place by next year.

The Queensland Government is also continuing its review of port governance and supply chain coordination and delivery across the Queensland port network.

The closing date for submissions is Friday 13 December 2013.

To review the draft Ports Strategy: Queensland Ports Strategy Draft for consultation

Mining reforms introduced into QLD parliament

The Queensland Government has introduced legislation to give effect to the introduction of competitive tendering for coal, petroleum and gas areas, and the development of the Aurukun bauxite resource on Cape York.

The Queensland government announced on 9 October 2012 that a new competitive cash bidding process would apply to companies seeking the right to explore on highly prospective coal, petroleum and gas resources tenements. This new legislation amends the Mineral Resources Act 1989 (Qld) to allow for this to occur.

Minister for Natural Resources and Mines Andrew Cripps said “this new process of allocating exploration rights will deliver a consistent approach across the resources sector and ensure all Queenslanders benefit from the timely development of the state’s most resource-rich areas.”

The changes will be significant for coal and petroleum proponents – coal miners will no longer be able to rely on the first in first served process that has governed the grants of permits thus far. The change, whilst resulting in increased revenues for government, will make it more difficult for smaller miners to compete with the deeper pockets and greater balance sheets of the larger miners.

The new legislation also allows for expressions of interest in Queensland’s lucrative bauxite leases in far north Queensland. In relation to this issue, the Minister said that “given the vast area of the Aurukun bauxite resource it is possible that following the tender process the State may select more than one proponent to develop different parts of the resource area.”