Aradon Pty Ltd, Re [2001] QLRT 35

LAND AND RESOURCES TRIBUNAL QUEENSLAND CITATION: Re Aradon Pty Ltd [2001] QLRT 35 PARTIES: In the Matter of Application for Mining Lease No 80090 by Aradon Pty Ltd FILE NO: LXX40072/2000 PROCEEDING: Application for Mining Lease DELIVERED ON: 12 June 2001 DELIVERED AT: Brisbane HEARING DATE: 19 February 2001 PRESIDING MEMBER: Smith DP ORDER/S: (1) I recommend to the Honourable the Minister for Natural Resources and Mines that Mining Lease 80090 be granted over the entire application area, for the purpose sought by the Applicant, for the term of 5 years; and (2) I further recommend that my comments regarding the failure of the Applicant to comply with the provisions of the Act and the Applicant’s unsatisfactory prior performance be specifically brought to the Honourable the Minister for Natural Resources and Mines attention, together with my comments regarding the term of any renewal of the lease. (at [52]) CATCHWORDS: MINING – MINING LEASE – RECOMMENDATION – PROVISIONS OF MINERAL RESOURCES ACT NOT COMPLIED WITH – MINE – “OFF LEASE” MINING – RENEWAL – TERM MINERAL RESOURCES ACT 1989, SS. 6A, 252(1), 269(4), 276(1), 286 Sinclair v. Mining Warden at Maryborough and Anor (1975) 132 CLR 473, applied -- 1 of 11 -- Beattie v. McGrady (Unreported) Supreme Court of Queensland, Cullinane J., 20 July 1993, applied Mann v. Leinung and Anor (Unreported) Warden’s Court of Queensland, Mining Warden Windridge, 24.05.2000, considered Trade Practices Commission v. Tooth and Co Ltd 142 CLR 398, considered COUNSEL: N/A SOLICITORS: Donald James Kayes represented Aradon Pty Ltd [1] SMITH DP: On 19 July 2000 Aradon Pty Ltd (hereafter referred to as “the Applicant”) lodged Mining Lease Application No 80090 (Exhibit 4) with the Mining Registrar, Rockhampton District. The Application was lodged pursuant to section 245 of the Mineral Resources Act 1989 (hereafter referred to as “the Act”) for the purpose of mining for thunderegg, rhyolite, perlite and zeolite. [2] The mining lease application project name is “Mt Hay Gemstone Tourist Park” and the mining lease application is linked to an ongoing mining and tourism venture. [3] No objection was duly lodged to the Mining Lease Application. [4] The Application was heard at Rockhampton on 19 February 2001. A view was also conducted and evidence taken on site at Mt Hay on 19 February 2001. Additional material was also provided to the Tribunal following a Directions Hearing on 5 March 2001. The Applicant was represented by one of its Directors, Donald James Kayes. [5] Mr Kayes was sworn and gave evidence at the hearing. I have relied upon his evidence and the exhibits tendered by him during the course of the hearing. My decision in this matter is principally based on the evidence of Mr Kayes and on the exhibits. These reasons refer to the salient points, but not all the relevant evidence, that I have taken into account in making my recommendation. [6] In considering this matter, I have also applied, where relevant Sinclair v. Mining Warden at Maryborough and Anor (1975) 132 CLR 473 and Beattie v. McGrady (Unreported) Supreme Court of Queensland, Cullinane J., 20 July -- 2 of 11 -- 1993. I have also considered the provisions of the Act, in particular sections 252, 269 and 276. [7] For the purpose of this decision, I set out below, in summary form, the criteria specified in section 269(4) of the Act that I have taken account of and considered in reaching my conclusions in this matter. I have broken the various components of the Applicant’s evidence and the exhibits into the subheadings listed below based on each criterion set out in section 269(4) of the Act. Section 269(4)(a) – Have the provisions of the Act been complied with? [8] On 20 July 2000, the Mining Registrar, Rockhampton District, issued a Certificate of Application (Exhibit 5). Pursuant to s. 252(1) of the Act, the Mining Registrar can only issue a Certificate of Application if satisfied that the Applicant is eligible to apply for the mining lease and has complied with the requirements of the Act with respect to the application. [9] Mr Kayes gave evidence that in his opinion all the provisions of the Act had been complied with. Further, Exhibit 9 is a Statutory Declaration which sets out details of posting, engraving, service and advertising of the mining lease Application. [10] The facts of this matter however do not allow the issue of compliance with the Act to be disposed of that easily. [11] Both the evidence of Mr Kayes and my own observations whilst conducting the view revealed activity taking place “off lease”. [12] Following a Directions Hearing convened specifically to address this point, the Applicant, by letter to the Tribunal dated 19 March 2001, had this to say: “The ‘off lease’ activity is an inadvertent consequence of years of mining on the top of a small hill within a lease of size approximately 200 metres x 100 metres. Given this is not a large area and that it covers the top of a small hill with very steep slopes at its edges, the overburden pushed to the edges over the years has gradually filled the contours in those edges and subsequently, with natural influences the build up of overburden has travelled to the base of the hill and also outside the lease boundary. As the present situation is deemed illegal, the correct course to take in addressing the matter is, of course, this application. In preparation of the application, parts of Section 269 (4) of the Mineral Resources Act to be answered – namely parts (b), (c), (d), (m) all support the application and also support this statement. Also in retrospect, when the lease was originally granted over 30 years ago, the vision of future -- 3 of 11 -- development was not realised, in the fact that the lease was of such a small area and that in part being how the illegality i.e. material extending off lease arose. There has not been any physical mining ‘off lease’ nor has there been any intentional dumping or stockpiling ‘off lease’. It is still part of the existing operations and preventative measures have been taken in terms of erosion control with the establishment of sediment control dams at the base of the slopes.” [13] The Act, s. 6A, defines the meaning of “mine” as follows: “Meaning of “mine” 6A.(1) “Mine” means to carry on an operation with a view to, or for the purpose of– (a) winning mineral from a place where it occurs; or (b) extracting mineral from its natural state; or (c) disposing of mineral in connection with, or waste substances resulting from, the winning or extracting. (2) For subsection (1), extracting includes the physical, chemical, electrical, magnetic or other way of separation of a mineral. (3) Extraction includes, for example, crushing, grinding, concentrating, screening, washing, jigging, tabling, electro winning, solvent extraction electro winning (SX-EW), heap leaching, flotation, fluidised bedding, carbon-in-leach (CIL) and carbon-in-pulp (CIP) processing. (4) However, extracting does not include– (a) a process in a smelter, refinery or anywhere else by which mineral is changes to another substance; or (b) testing or assaying small quantities of mineral in teaching institutions or laboratories, other than laboratories situated on a mining lease; or (c) an activity, prescribed under a regulation, that is not directly associated with winning mineral from a place where it occurs. (5) For subsection (1), disposing includes, for example, the disposal of tailings and waste rock. (6) A regulation under subsection (4)(c) may prescribe an activity by reference to the quantities of minerals extracted or to any other specified circumstances.” [14] Accordingly, despite the view of the Applicant that there has not been any physical mining “off lease”, taking into account the definition of mine, and in particular 6A(5), that is clearly not the case. [15] Mining without authority of a mining lease can have serious consequences, as shown by the decision of the Mining Warden in Mann and Leinung dated 24 May 2000, where the Mining Warden had this to say: “A person may only “mine”, ie win a mineral, extract a mineral or dispose of any mineral (Section 5) under the appropriate licence or lease. I am satisfied that there has been disturbance of the surface of the area within mining lease application 95288. There is some basis for inferring that East and Mann were responsible for the disturbance. Therefore, the provisions of the Act have not been complied with. To rule otherwise is to infer that the lodgment of an application gives the right to mine. That obviously is incorrect. I am satisfied that Ground 2 of the objection has been made out.” -- 4 of 11 -- [16] This led to the Mining Warden making the following recommendation: “Upon consideration of all the matters set forth in s.269 (4) of the Mineral Resources Act 1989, I recommend that the mining lease be rejected on the following ground: 1. The provisions of the Act have not been complied with in that disturbance of the surface area by Mann and East constitutes an act of unauthorised mining before the lease application has been considered, recommended or granted.” [17] On its face, there are many legal similarities between the present case and Mann. In effect, the ongoing operations of the Applicant “off lease” is mining on land over which only a prospecting permit is held. [18] Although in the passage quoted in paragraph 12 the Applicant seeks to explain the off lease mining by reference to the small size of the original lease area and the period of time (over 30 years) that has elapsed since the original grant, it is my view that such comments operate as much as a sword against the Applicant as a shield explaining the Applicant’s actions. [19] Off lease mining is not something that has occurred overnight. From my observations and from both the material tendered and the evidence of Mr Kayes, it has been going on over a very lengthy time. During this time, the holder of the mining lease must have known the boundaries of the lease, and therefore must have known that off lease mining activity was occurring. At the first warning sign that mining might extend beyond the mining lease boundaries, mining operations should have ceased and an application to cover a larger area should have been made. Unfortunately, this did not occur. What did occur, and is ongoing to the present, is continued mining off lease. [20] In light of my comments above, it is my view that the provisions of the Act have not been complied with. Section 269(4)(b) - Is the land applied for mineralised or are the other purposes for which the lease is sought appropriate? [21] With respect to this criterion, I rely on the evidence of Mr Kayes and the exhibits tendered. I also rely upon the fact that this application is in practical effect an application for a new mining lease fully covering the area of two existing mining leases that have operated for a lengthy period, together with -- 5 of 11 -- additional areas which are essentially the sides of a steep hill. I am satisfied that the land applied for is mineralised. Section 269(4)(c) - If the land applied for is mineralised, will there be an acceptable level of development and utilisation of the mineral resources within the area applied for? [22] As with previous criteria, I rely on the evidence of Mr Kayes and the exhibits tendered. I also rely upon the fact that this application is in practical effect an application for a new mining lease fully covering the area of two existing mining leases that have operated for a lengthy period, together with additional areas which are essentially the sides of a steep hill. I am satisfied that there will be an acceptable level of development and utilisation of the mineral resources within the area applied for. Section 269(4)(d) – Is the land and the surface area of that land in respect of which the mining lease is sought of an appropriate size and shape? [23] As with previous criteria, I rely on the evidence of Mr Kayes and the exhibits tendered. I also rely upon the fact that this application is in practical effect an application for a new mining lease fully covering the area of two existing mining leases that have operated for a lengthy period, together with additional areas which are essentially the sides of a steep hill. [24] I am satisfied that the size and shape of the mining lease application is appropriate. Section 269(4)(e) -Is the term sought appropriate? [25] The term sought for this mining lease is 20 years. Given my view above that the provisions of the Act have not been complied with, and my comments below regarding prior performance, I do not consider the term sought to be appropriate. Section 269(4)(f) – Has the Applicant the necessary financial and technical capabilities to carry on mining operations under the proposed mining lease? [26] As with previous criteria, I rely on the evidence of Mr Kayes and the exhibits tendered. I also rely upon the fact that this application is in practical effect an application for a new mining lease fully covering the area of two existing -- 6 of 11 -- mining leases that have operated for a lengthy period, together with additional areas which are essentially the sides of a steep hill. I am satisfied that the Applicant has the necessary financial and technical capabilities to carry on mining operations under the proposed mining lease application. Section 269(4)(g) – Has the past performance of the Applicant been satisfactory? [27] With respect to this criterion, I repeat my findings with respect to section 249(4)(a) above. [28] The Applicant has conducted mining as defined by the Act for an extended period over land for which it does not hold a mining lease [29] I therefore find that the Applicant’s past performance has not been satisfactory. Section 269(4)(h) – Will any disadvantage result to the holders of existing exploration permits or mineral development licences or existing applicants for exploration permits or mineral development licences? [30] Mr Kayes gave evidence that there are no other interested parties in the area. The Applicant is the holder of a relevant prospecting permit and has linked the surrender of current mining leases to this application. I am satisfied that there will be no disadvantage to any other person should this mining lease be granted. Section 269(4)(i) – Do the operations to be carried on under the authority of the mining lease conform with sound land use management? [31] As with previous criteria, I rely on the evidence of Mr Kayes and the exhibits tendered. I also rely upon the fact that this application is in practical effect an application for a new mining lease fully covering the area of two existing mining leases that have operated for a lengthy period, together with additional areas which are essentially the sides of a steep hill. [32] Accordingly, it is my view that the proposed mining lease would conform with sound land use management. Section 269(4)(j) – Will there be any adverse environmental impacts, and if so, the extent thereof. [33] As with previous criteria, I rely on the evidence of Mr Kayes and the exhibits tendered. I also rely upon the fact that this application is in practical effect an -- 7 of 11 -- application for a new mining lease fully covering the area of two existing mining leases that have operated for a lengthy period, together with additional areas which are essentially the sides of a steep hill. [34] Although there will virtually inevitably be environmental impacts in any mining operation, I am satisfied that the extent of those impacts is not sufficient to, nor to such an extent to, prevent me from making a recommendation to the Honourable the Minister for Natural Resources and Mines that the mining lease be granted. Section 269(4)(k) – Will the public right and interest be prejudiced? [35] As with previous criteria, I rely on the evidence of Mr Kayes and the exhibits tendered. I also rely upon the fact that this application is in practical effect an application for a new mining lease fully covering the area of two existing mining leases that have operated for a lengthy period, together with additional areas which are essentially the sides of a steep hill. [36] I am satisfied that the public right and interest will not be prejudiced by the grant of the proposed mining lease. Section 269(4)(l) – Has any good reason been shown for a refusal to grant mining lease? [37] In light of my findings regarding ss. 269(4)(a) and (g), there is support for the contention that this application should be refused. Section 269(4)(m) – Is the proposed mining operation an appropriate land use taking into consideration the current and prospective uses of the land? [38] Given the nature of the land and the existing mining operations, it is my view that the proposed mining lease is an appropriate land use. [39] I now turn to my final recommendation in this matter. [40] I have previously referred to the recommendation of the Mining Warden in Mann v. Leinung. In essence, the Mining Warden recommended that the particular mining lease application be rejected because the provisions of the Act (s. 269(4)(a)) had not been complied with. However, I do not believe that -- 8 of 11 -- failure to comply with the provisions of the Act necessarily results in a recommendation that the mining lease application be rejected. [41] As I observed in Re Keneth James Willis [2001] QLRT 291: “[F]ailure by an Applicant to meet any one criterion or any part of any one criterion will not necessarily mean that it is not appropriate for me to recommend the grant of a mining lease, but is an issue which I am required to “take into account and consider”.” [42] I am concerned that in this matter the Applicant has failed to meet the requirements of at least two criteria. I am also concerned that the applicant seems to be of the view that a failure to comply with the provisions of the Act is something that can simply be rectified by a new Application. This attitude represents a failure to take the various requirements of the Act seriously, and should clearly be discouraged. [43] Although the mining activities have principally been carried out in the past by Mr Kayes deceased father, the Applicant cannot escape its corporate responsibility. [44] However, as the application is closely associated with a long term tourist facility, and due to the otherwise satisfactory operations on the site, I do not believe that the Applicant’s failure to comply with s. 269(4)(a) and (g) should result in a recommendation that this application be refused. The serious nature of the failures by the Applicant must though have some impact on this Application. [45] I consider that the appropriate course to take is a recommendation that the mining lease application be granted, but only for a term of 5 years. This would result in the mining lease being considered for renewal (should such an application be made) in a relatively short period of time. At the time of any renewal application, the Minister is to be satisfied, amongst other things, that the holder has observed and performed all the covenants and conditions applicable to the lease on the holder’s part to be observed and performed, and 1 Re Kenneth James Willis [2001] QLRT 29 @ 42 and 43. -- 9 of 11 -- the holder has complied with the provisions of the Act in respect of the particular mining lease2. [46] Clearly, the Applicant’s past failure to comply with the provisions of the Act with respect to previous mining operations would not operate to preclude the renewal of mining lease 80090 (should it be granted), unless there is a future failure by the Applicant to comply with the provisions of the Act. [47] Although this aspect has not been the subject of any submissions before me, I consider it appropriate to make some observations regarding the term of any renewal of ML80090. [48] The New Shorter Oxford English Dictionary on Historical Principles Volume 2 N-Z3 includes in its definition of “renew” the following: “Grant anew, reaffirm, reinstitute; esp extend the period or application of (a lease, licence, subscription, etc.).” [49] Further, Butterworths Australian Legal Dictionary4 defines “renew a lease” as: “To grant a new lease for a further period, whether or not for the same period and on the same terms as the original lease.” [50] In Trade Practices Commission v. Tooth and Co Ltd5, Murphy J had this to say: “The foundation for the Federal Court’s holding of invalidity is that “renew” means renew on the same terms and conditions. On that foundation, the majority held that the section so construed provides for acquisition of property other than on just terms contrary to s. 51 (xxxi.) of the Constitution. However, renewal is not restricted to a fresh grant on the same terms and conditions as the previous lease. In Sharp v. Wakefield (98), Lord Bramwell said: “The licence is a renewal. That word has been criticized. It may be misleading, but is, I think, correct. It is a ‘renewal’–i.e., a new license, as we talk of a new lease being a renewal, though parties and terms may be wholly different.” I agree with what Gibbs J. says on this aspect of the case. The foundation collapses.” [51] In light of the definitions and the authorities, it would seem that, provided that the Minister is satisfied as required under the Act, there is nothing to preclude 2 See s. 286(3) Mineral Resources Act 1989. 3 Lesley Brown ed. (1993) Oxford, England, Oxford University Press 4 The Honourable Dr Peter E Nygh and Peter Butt, general ed. Judge R N Howie QC et al, consultant ed. (1997) Australia, Ligare Pty Ltd 5 142 CLR 397 @ 434. -- 10 of 11 -- any renewal being for a term in excess of 5 years. In such circumstances, a renewal for a term of 15 years may be appropriate, bring the combined term of the lease under this application and the renewal to the term of 20 years as sought by this application. Recommendation: [52] Taking into account all the evidence before me and, in particular, the evidence referred to above: (1) I recommend to the Honourable the Minister for Natural Resources and Mines that Mining Lease 80090 be granted over the entire application area, for the purpose sought by the Applicant, for the term of 5 years; and (2) I further recommend that my comments regarding the failure of the Applicant to comply with the provisions of the Act and the Applicant’s unsatisfactory prior performance be specifically brought to the Honourable the Minister for Natural Resources and Mines attention, together with my comments regarding the term of any renewal of the lease. -- 11 of 11 --