Insights

18/08/17

Late mineralisation report means no tenement

On 15 June 2017 we published a client update regarding the pending decision of the High Court in Forrest & Forrest v Wilson relating to the contested validity of a granted mining lease where there had been non-compliance with the requirement of the Mining Act to accompany the relevant mining lease applications with:

  • a mining proposal;
  • a mineralisation report and a section 74(1a) statement; or
  • a resource report and a section 74(1a) statement.

The High Court has found that the requirement to lodge one of the above documents at the same time as the mining lease application was a condition precedent to the exercise of the powers to progress a mining lease application through to a grant.

As the Court has decided that contemporaneous lodgement is required, then any granted mining and general purpose leases that are affected by this particular defect will be liable to be declared invalid by a Court and may not be protected by the section 116(2) ‘indefeasibility of title’ provision.

That is, despite any other circumstances (such as, for example, significant investment in mine development or exploration on a tenement), a tenement attended by this defect may be declared invalid which would mean that the former tenement holder would have no rights over the land.

There is no current legislative solution to this issue. The only way to obtain rights to the former tenement is to apply to new tenure over the same ground.

What should we do?

Tenement holders should, as a matter of urgency, conduct an audit of mining and general purpose leases granted subsequent to the 2004 amendments to establish whether they have:

  • any granted tenements whose applications were not accompanied by the necessary additional information (ie the information that was required to accompany the tenement application); or
  • tenement applications before the Minister and yet to be granted which were not accompanied by the necessary additional information.

If a tenement holder identifies a granted tenement affected by this defect, then there is a risk that a Court will declare such a tenement invalid. Invalidity means that the land the subject of the invalid tenement would be open for mining and any 3rd party could apply for tenure over it.

While it is likely that the Minister would use the provisions of s111A of the Mining Act to protect incumbent interests (ie by declining all competing applications), there is no guarantee that would be the case. 

To protect existing rights a tenement holder could apply for tenure over the potentially invalid tenements as a holding position (ie to ensure that any application by a 3rd party would be 2nd in time). An assessment would then need to be made as to what next steps are necessary to maintain rights over the land. This would be particularly important where the tenement is over a JORC resource or reserve or active mine.

If a tenement application is identified that is affected by this defect, then it may be possible for the applicant to lodge a fresh tenement application that complies with the requirements of the Mining Act to protect its interests.

If these issues are relevant to your mining tenure, please contact one of the authors or any other member of the Gilbert + Tobin Energy & Resources team.

Insight By
Image of Marshall McKenna
Partner
+61 8 9413 8410
+61 411 518 778
Guy Greer
Lawyer
+61 8 9413 8436
+61 403 328 088
Image of Arabella Tole
Lawyer
+61 8 9413 8413
+61 414 669 880

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