Depuro Pty Ltd & Russell, Re [1997] QMW 9

IN THE WARDENS COURT HELD AT BRISBANE IN THE STATE OF QUEENSLAND. BEFORE: F.W.WINDRIDGE MINING WARDEN. IN THE MATTER OF: DETERMINATION OF COMPENSATION IN RESPECT OF MINING LEASE NUMBER 10224 IN THE CHARTERS TOWERS DISTRICT. APPLICANT MINER: DEPURO PTY LTD. LANDOWNER: ROBERT REID RUSSELL. CATCHWORDS: COMPENSATION – MINING LEASE – TWO HECTARES – CHARTERS TOWERS DISTRICT – DOLOMITE – LIME - MAGNESITE Mineral Resources Act 1989 s. 281 DETERMINATION: This matter was set for hearing at Charters Towers Wardens Court on Wednesday 14 May 1997 at 10.00 am. For the applicant miner, Mr. Owen Wellington, a director of the applicant company, appeared. For the landowner, Mr. Robert Reid Russell appeared, he being the sole owner of the land the subject of the application. Neither party called evidence but presented their evidence as a general submission from the bar table. While not making his application at the start of proceedings, Mr.Russell indicated that he thought an adjournment was the more appropriate course until the "native title issue" was settled. This request was refused on the ground that any native title extinguishment would be the responsibility of the Department, and did not involve the issue of compensation between the landowner and the applicant miner. The lease application could proceed through the compensation stage, and native title would be a consideration at the time when issue of the lease was imminent. This determination arises because the parties have been unable to reach an agreement as to compensation, and the applicant miner has requested that the matter be determined by the Wardens Court. The grant of a lease cannot proceed until compensation has been agreed by the parties or determined by the Court in the absence of any agreement (s279). The Court is empowered to determine the question of compensation, and the act sets out the matters which must be considered in section 281 (3) and (4). It is necessary to set forth a few preliminary matters before considering the quantum of any award. -- 1 of 4 -- The applicant company lodged an application under Part 7 of the act for the grant of a mining lease at the Charters Towers Regional Office on 15 August 1996. A certificate of application was issued on 15 August 1996 setting 26 September 1996 as the last date for the receipt of objections. No objections were received and the application was duly considered and recommended for grant by the Warden on 30 October 1996. The lease application area is 1.90 hectares and is situated on land more properly described at part of Lot 2 on Plan AY134, being part of GHPL 12/2555, County of Albany, Parish of Bulliwallah. The application area is sited about 180 kilometres south of Charters Towers. The lease application area is situated right beside the public access road, and access is only about 4 metres in length .he lease is for the purpose of extracting dolomite, lime and magnesite. The applicant intends to extract about 5000 tonnes per annum at this stage. This extraction is to be conducted by a loader and trucks for approximately 2 days, and this operation might occur about four times per year. This is dependent on orders received, and increased extraction will be increased if orders for the product increase. The material is to be trucked off the lease, and processing will take place at a plant site already operating at Calcium which is a considerable distance away from the lease. The lease site is some five kilometres from the homestead, and therefore there would be no nuisance or loss of visual amenity. A number of photographs taken by the Field officer were on file and were identified by the parties as representative of the area. It is apparent, and it is acknowledged, that there are a number of small pits (cuts) already existing on the application. These cuts were done by the local council when they required some of the material for road making purposes. No rehabilitation works were carried out and it is disappointing that local councils insist on miners conducting rehabilitation of such pits but neglect or overlook their own responsibilities when they themselves feel the need for the material. The applicant advises, and the photographs bear out, that the depth of material is 3 to three and a half metres. The product taken will vary in depth from one metre to 2 metres .The applicant acknowledges that he will rehabilitate the pits as they are worked, including the old council pits. The landowner conducts a grazing operation on the land, the total area of the property being approximately 20,000 hectares. The owner indicates that carrying capacity is approximately one beast to 10 hectares. The applicant miner has made an offer of $200.00 per annum as total compensation. This equates to $100.00 per hectare approximately. The landowner rejected this offer and referred to a number of other agreements in which he has been involved with other parties. One was a slate operation where a "royalty" of $2.00 per tonne was paid. Another related to dolomite on the Hillgrove Pastoral Lease where 75 to 85 cents per tonne was paid. The applicant miner does not accept this means of calculation of compensation. The act states in section 281(4) that no allowance shall be made for any minerals that may be on or under the surface of the land, and therefore the Court cannot calculate a quantum based on any "royalty" rate. -- 2 of 4 -- While the area of the lease is 1.90 hectares, for the purpose of this determination, the area will be rounded off to 2.00 hectares. I turn now to the provisions of the act in relation to determination of the quantum of the award. (i) deprivation of possession of the surface of the land of the owner. An area of two hectares will be lost for a period of 20 years. The miner states the lease will not be fenced off and the surface area that is not used for mining can be grazed .However this will be a fairly negligible use for grazing purposes. (ii) diminution of the value of the land of the owner or any improvements thereon. There are no improvements on the land and it appears that there will be no interference to any improvements on the property. Diminution of the value will relate directly to the grant of a two hectare lease on a block of 20,000 hectares, and this would appear to be fairly minimal. (iii) diminution of the use made or which may be made of the land of the owner or any improvements thereon. The land contained in the lease area appears to be poorly grassed. The presence of parthenium weed is acknowledged. Carrying capacity is one beast to 10 hectares. Diminution of use would appear to be fairly minimal. (iv) severance of any part of the land from other parts of the land of the owner. The lease area is adjacent to the boundary and only some four metres from the roadway. Therefore there will be no severance of any degree, i e one part of the property is not severed from any other part of the property. Any award under this head of claim would be negligible. (v) any surface rights of access. As already indicated and confirmed by the parties, access is direct from a public road and involves a length of four metres. Any award under this head of claim would be negligible. (vi) all loss or expense that arises. There was no evidence of any other loss or expense. In summary, apart from the submissions from the bar table, there was no evidence called to support any claim under any other head of compensation contained in section 281 of the Mineral Resources Act 1989, nor was any matter raised which would necessitate consideration under paragraphs (a), (c), or(d) of section 281(4) of the act. I take into account that the only likely use of the subject land, apart from mining, is low intensity grazing under favourable conditions. Taking into account all the matters that I am required to consider under the act, including the compulsory taking for the term of the lease under section 281(4)(e), I consider that the amount of compensation that the applicant miner DEPURO PTY LTD should pay to the respondent -- 3 of 4 -- landowner ROBERT REID RUSSELL in respect of the application area and the access thereto shall be the sum of $25.00 per hectare per annum, i.e. a total of $1000.00 for the full term of the lease plus any interest that becomes due. There is no submission in relation to the times, terms or manner of payment of compensation. In view of the small area of the lease and the quantum involved, yearly payments would lead to administration complications and additional interest payments. In view of the area involved, the amount awarded and the term of the lease, I determine that compensation shall be paid as a substantial payment on grant, and the balance in the short term. This removes the need for yearly payments and interest calculations. Compensation is to be paid as follows: 1. the sum of $500.00 within 60 days of notification of grant by the Registrar. and 2. the balance of $500.00 with interest of $45.00 (calculated at 9% on the balance of $500.00) on the anniversary of the grant of the lease. However the applicant miner always has the option of paying the amount due in full within 60 days of grant, thereby avoiding the interest due on the second payment. The applicant miner should be aware that failure to pay the compensation as ordered will render the lease subject to forfeiture by the Minister. The grant of a mining lease does not create an estate or interest in the land. The grant of the lease entitles the miner to enter the land and be upon the surface area under the limited authority of the lease for the limited purposes for which the lease is granted. The miner is responsible for the actions of all persons who enter the lease area, and this includes employees and contractors. Any mining activity which causes disruptions to the operations of the property gives the landowner a right of action for damages. Such instances include the theft or death of stock, damage to improvements, or additional mustering caused by open gates. Dated at Brisbane this 21st day of May 1997. F.W.WINDRIDGE MINING WARDEN. -- 4 of 4 --