Charters Towers Gold Mines NL & Anor, Re [1995] QMW 152

REPORT AND RECOMMENDATION OF WARDEN PURSUANT TO SECTION 269 AND 270 OF THE MINERAL RESOURCES ACT, 1989. IN THE MATTER OF: APPLICATION FOR MINING LEASE NUMBER 10208 IN THE CHARTERS TOWERS MINING DISTRICT. BEFORE: F.W. WINDRIDGE, WARDEN. APPLICANT: CHARTERS TOWERS GOLD MINES N L 70% CHARTERS TOWERS MINES N L 30% REPORT: This Application for a mining lease under section 232 of Part 7 of the Mineral Resources Act 1989 (the act) is for an area of 570.30 hectares with 8.50 hectares of surface area situated on R220, PO 7133, Lot 1 MPH 1642 and Dan Lane being a gazetted road in ;the City of Charters Towers. Power to grant such a lease is vested in the Governor in Council pursuant to section 234 of the act after recommendation by the Minister pursuant to section 271. All minerals are the property of the crown (s.8). The grant of a lease does not create any estate or interest in the land (s.10), although there is the power to determine title to land (s.363). The Application was lodged at the Mining Registrars Office at CHARTERS TOWERS on 2 JUNE 1995 and a certificate of application was issued on 26 JULY 1995, (199 s.252(1), setting the last date for receipt of objections as 4 AUGUST 1995. (S.252(2). [1995] QMW 152 -- 1 of 18 -- One objection was lodged pursuant to Section 260 of the Act. The matters raised in the objection will be dealt with at appropriate stages in the recommendation. The following matters have been taken into account and considered in making my recommendations pursuant to Section 269. (A) HAVE THE PROVISIONS OF THE ACT BEEN COMPLIED WITH? The material indicates that each of the Applicants is an eligible person as defined in Section 5, and is thus entitled to make the application under Section 233 of the Act. I accept, on the material before me, that the land applied for is within a reserve as defined in the act, and that there is no relevant permanent building or relevant feature as mentioned in section 238(2) on the land. I find the application is therefore in respect of land over which, pursuant to Section 238 of the act, a mining lease shall not be granted without the consent of another person or persons. A draft consent and other compensation agreements have been filed with the Registrar. At the time of marking out and making the application, at least one of the applicants was the holder of EPM 8150 and MDLs 115, 116 (S.232). A declaration of posting was lodged on the 7 AUGUST 1995 (s.252(9)). -- 2 of 18 -- 3 I am satisfied, on the material, including the uncontested information in the application form and the declaration of posting and advertising that all the provisions of the act (other than the provisions requiring the hearing) have been complied with or substantially complied with (s.392). Service of documents was in accordance with section 399. I find that I am satisfied that (a) the provisions of the act have been complied with; (b) there is ONE valid objection; and (c) the consent of any trustee or other person is not required, but where required, has been lodged. The hearing was held at Charters Towers Wardens Court on Wednesday 27 September 1995. (B) IS THE LAND APPLIED FOR MINERALISED OR IS THE OTHER PURPOSE FOR WHICH THE LEASE IS SOUGHT APPROPRIATE? I am satisfied that the resources sought are minerals as defined in section 5 of the act, and the infrastructure requirements are purposes associated with the winning and treatment of those minerals. I accept the Applicants advice and I am satisfied on the detailed information given by them that the purpose for which the lease is -- 3 of 18 -- 4 sought is appropriate. The applicants intend to mine the gold bearing quartz vein left my previous activity and to also recover and treat some of the ore left as stope fill by previous miners. The economic viability of the project is a matter for the applicants commercial assessment, and not a matter for this Court. However, with an efficient operation with good recovery rates, even marginal ground is viable given the current price of gold. (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? I am satisfied the applicant has sufficient resources to develop the land to an acceptable level. The applicants have commenced to develop the area and their infrastructure needs under an MDL issued for that purpose. A considerable amount of work has been done on the decline, and the development drives have already broken into some old workings. (D) IS THE AREA SOUGHT AN APPROPRIATE SIZE AND SHAPE? There is nothing in the information supplied by the Applicant to suggest that the surface area of the land in respect of which the mining lease is sought is not an appropriate size and shape. The mine plan is to follow the quartz veins and recover the material left by the previous miners. Tests have proved that this material -- 4 of 18 -- 5 can run as high as 8 gms per ton. The surface areas will be required for ventilation shafting when mining progresses is to those areas. (E) IS THE TERM SOUGHT APPROPRIATE? The term of lease applied for is 25 years. I am satisfied that the term sought is appropriate and will allow for mining and rehabilitation to be completed. A long term lease is required given the resource and the planned rate of extraction. The long term is also necessary as security of tenure to attract investors and the support of financial institutions. The applicant has the option of renewal under section 286 of the act if mining is not completed, or surrender at an earlier date under section 309 if mining and rehabilitation is completed prior to the expiry date. (F) HAS THE APPLICANT THE NECESSARY FINANCIAL AND TECHNICAL CAPABILITIES TO CARRY ON MINING OPERATIONS UNDER THE PROPOSED MINING LEASE? I have no reason not to accept the Applicants advice and I am satisfied that the Applicants have the necessary financial capability and that they have sufficient technical expertise to properly carry on the proposed mining operation under the proposed lease. Financial resources are available from company funds, shareholders or financial institutions. The applicant is currently engaged in mining on other leases in this area, and in my opinion has the experience necessary to complete the mining operation (Carr V Simnovec (1980) 26 SASR 263 at 268, and Pacminex V Aust. Nephrite -- 5 of 18 -- 6 Jade Mines (1974) 7 SASR 401 at 415.) (G) HAS THE PAST PERFORMANCE OF THE APPLICANT BEEN SATISFACTORY? There is no material before me to suggest that the past performance of the Applicant has been satisfactory or unsatisfactory. The local Field Officer will be available to monitor performance and rehabilitation. The Inspectorate should monitor the methods adopted for mining, ensuring that industry standards are maintained and all machinery is operated in a safe and competent manner by licensed persons where necessary. (H) IS THERE ANY DISADVANTAGE TO THE HOLDER OF OR APPLICANT FOR EXPLORATION PERMITS OR MINERAL DEVELOPMENT LICENCES. At least one of the applicants held the prerequisite exploration tenure at the time of marking out. There is no evidence that the holder of or applicant for any exploration permit or MDL has been disadvantaged. No objection was lodged on such grounds. The applicants held current MDLs over the project area. (I) WILL THE OPERATIONS TO BE CARRIED ON UNDER THE PROPOSED MINING LEASE CONFORM WITH SOUND LAND USE MANAGEMENT? The land that is shown as surface land is not used for any purpose, -- 6 of 18 -- 7 being vacant land with old shafts fenced off, even though documentation shows some of this land is a reserve. The land appears to not have been used for the designated purpose. The sub surface area is located under the city of Charters Towers. Given the geological nature of the area to be mined, there is no risk of subsidence from current operations. There has been no subsidence from previous mining for the past 80 years. There is no evidence that there will be disturbance to stock or stock watering or management facilities. Information has been supplied as to the Applicants site management proposals. The evidence leaves me with no reason to believe that the proposed mining operations do not conform with sound land use management. (J) WILL THERE BE ADVERSE ENVIRONMENTAL EFFECTS CAUSED BY THE PROPOSED OPERATION, AND IF SO, THE EXTENT THEREOF? The proposed underground mining activity is under the city of Charters Towers. There will be no effect of noise or dust from the operations conducted underground. Surface dust can be controlled in the usual manner. Steps have been already taken to lessen the impact of noise from ventilation shafts so that there is no noise impact on nearby resident. Mineral treatment activities on site appear to be planned in such a way as to be unlikely to have a deleterious effect on any river system. Chemicals will not be used in any processing on ;this lease. The ore is to be transported to -- 7 of 18 -- 8 another lease some 10 kilometres outside the town boundary for processing. There are no tailings dams planned for this lease. Water taken from the mine workings is to be pumped to the processing plant and used for those purposes. Any discharges will require the usual permits or licenses from DEH and Water Resources. An EMOS has been lodged and accepted by the Registrar for other projects. That EMOS is to be amended to include this lease in the project. (K) WILL THE PUBLIC RIGHT AND INTEREST BE PREJUDICED? No factors prejudicial to the public right and interest have been identified. From the evidence that is available, it appears that there are no public utilities running on or across the application land. The right of way of any person will not be affected. There is no evidence to suggest that there are endangered flora or fauna on the application area. There is no evidence to suggest that there are any sites of historical interest or aboriginal significance on the application area. If any such sites are identified, the E.M.O.S. document can be amended to allow for site protection or avoidance strategies. (L) HAS ANY GOOD REASON BEEN SHOWN FOR A REFUSAL TO GRANT THE MINING LEASE? -- 8 of 18 -- 9 The economic viability of this project is a commercial decision of the applicant, and not this Court. When all other aspects of the application are taken into account and considered, I am satisfied that the objects of section 2 (a), (b), (c), (d), (e) and (g) will be attained if a mining lease is granted for the term recommended, for the following reasons: (1) a large scale operation is planned. (2) it is unlikely that the land applied for is of any interest to a small scale miner. (3) the location of the proposed mining operation and the method of mining is unlikely to cause environmental or public interest concerns. (4) a realistic security deposit, subject to E.M.O.S. discounts if appropriate, will be imposed to guard against financial failure of the miner to ensure rehabilitation is completed. (5) the applicant appears to have sufficient experience in the industry to accurately assess the potential of the project. (6) there is a market for the product and the project will provide employment and export income. To my knowledge there has been no gazettal of the land as claimable land under Section 2.12 of the Aboriginal Land Act 1991. No person claiming any right or interest under "native title" has lodged any objection under Section 260 of the Act. It appears it would not be possible to notify such a person in the normal way of service of a notice. The name of such a person claiming title would be unknown -- 9 of 18 -- 10 as there is no list or roll of such persons. However, such a person is not put to any disadvantage as the requirement of publication of the application under Section 252(7) is intended to notify any person who does not fall within the definition of "owner" as defined in Section 5 of the Act. The application area is situated under and on land granted over the area by the State of Queensland as a town. The declaration of the area as a goldfield in 1872 and the subsequent grant of numerous leases and claims in that field would extinguish any native title that existed. It would appear therefore that any number of grants has extinguished any "native title" that existed and there would appear to be no grounds for any claim of "native title" by any person ( MABO v Queensland (1992) 66 ALJR 408) Native title having been extinguished, the issue of a mining lease does not bring any of the native title regimes relating to compensation into existence, and the issue of a mining lease over the land would not involve the applicant miner in any claim for compensation in respect of any loss of native title rights. ( Native Title (Queensland) Act 1993.) In my view no good reason has been shown for a refusal to grant the lease application (Carr V Simnovec, Pacminex V Aust. Nephrite Jade Mines.) (M) IS THE PROPOSED MINING LEASE OPERATION AN APPROPRIATE LAND -- 10 of 18 -- 11 USE, TAKING INTO CONSIDERATION THE CURRENT AND PROSPECTIVE USES OF THE LAND? The material indicates that the land is currently used for no particular purpose even though set aside as a reserve in to instances. The land appears to be not suitable for any other particular use. The old shafts, although fenced off, have been left open for many years. The proposed use will result in better safety procedures and eventually the site will be left in a clean and tidy condition. Visual amenity will thus be improved. In my view, there appears to be no risk of significant conflict between the current land use, or any prospective land use, and the proposed mining operation. The proposed mining operation appears, on the evidence, an appropriate land use, taking into account the current and prospective uses of the land. A compensation agreement or determination of the Court will compensate the landowner for any conflict or loss over land use (s.279). I note that compensation agreements have been filed or will be finalised shortly. Mr. Lynch for the applicant miners submitted a number of volumes of material supporting the application. Mr. Lynch submitted that the applicant had gone to great lengths to advertise the application and the intentions of the applicant. He states there has been -- 11 of 18 -- 12 widespread community consultation, particularly with those residents living closest to the operations. It was well known and recognised that the mining venture was an opportunity for good meaningful employment for local persons and contractors. The company has a policy of recruiting locally, particularly among young people, and purchasing locally. Mr. Lynch listed quite a number of instances where local contractors and services had been involved. All employees live locally and there is no fly in fly out workforce. The applicants are to be commended for this approach. It is vitally important that employment opportunities and contracts for goods and services be provided locally to prevent population drift to the cities, and that towns such as Charters Towers do not wither and die through lack of opportunity in these projects. While financial benefit can flow to the share holders from the project, there is some direct economical gain for the local community. The objector, Miss Elizabeth Jane McCready, did not call any expert witness or give evidence on her own behalf. However, Miss McCready did address the Court in respect of her objection and made a number of points. It is obvious that Miss McCready has lived in the area for some considerable time and her family has had some close involvement in the mining community in the past. I propose to deal only with the major points which she raised. 1. Length of lease and interference with the heart of the city. -- 12 of 18 -- 13 I accept the counter submission of Mr. Lynch on this point. The length of any lease is determined by the quantity of resource assessed as mineable and the length of time necessary to extract that resource, given the equipment, workforce, and nature of the deposit. Obviously there needs to be some lead up time prior to actual production, and some post mining time to allow for removal of facilities, monitoring and rehabilitation. Investors and financial institutions also desire to see some security of tenure for a reasonable time without the risk of a short term lease preventing full development of the mineral reserves. The theory of proving up the lease with a short initial term is not feasible to investors, and not practicable for miners given the time, effort and expenditure needed to get even to that stage. I am not satisfied that there will be any interruption to the heart of the city. Mining will be at depth. The geological nature of the ground is very stable and there has been no subsidence from past mining. 2. Profile too vague and Mining Acts change. The applicant does not have any control over relevant legislation, but must respond to any changes brought in by the legislature. Generally over the past 10 years, as submitted by Mr. Lynch, the requirements have been strengthened. Auditing and inspections by the Inspectorate are carried out. In addition, rehabilitation controls are more vigorously enforced in respect of water usage and -- 13 of 18 -- 14 post mining use. While no one is claiming a perfect industry, performance of mining companies, and an acute awareness of their corporate image, has led to greater awareness of their responsibilities. 3. Living conditions. The applicant will be required to control dust and noise emissions to minimise and in most cases eliminate any impact from those nuisance factors. Any nuisance from blasting can be monitored and the Inspectorate is available to enforce the Explosives Act and Regulations. Hopefully, the controls of the Australian Stock Exchange will effectively remove the "rogue" operators as referred to by Miss McCready. Again ASX and Companies Act controls and reporting will assist the small investor and local business person that might be affected by any collapse of any mining company. However, it must be remembered that the resource is a finite resource, and once exhausted, mining must cease unless further resources are located. The matters raised by Miss McCready are not of sufficient weight to persuade the Court to make a recommendation against grant. This recommendation is based on an assessment of the information supplied. Should there be any dispute over damage or loss, or should the miner depart from his plan of operations or EMOS and cause loss or damage or interruption to the management of the property not envisaged or not foreseen in the terms of the compensation agreement, the parties are at liberty to apply to the Court for a determination or award of compensation and if necessary, injunctive relief under the powers contained in Section 363. -- 14 of 18 -- 15 APPENDICES: The following documents are appended: * Ex.1 - Copy of declaration dated 7 August 1995. * Ex.2 - Copy of application. * Ex.3 - Copy of Certificate of Application. * Ex.4 - Questionnaire and annexure, financial reports. * Ex.5 - Report - Native Title Investigation. * Ex.6 - Surface Area - * Ex.7 - Ventilation plans, Historical workings, waste water * Ex.8 - Photographs of current operations. * Ex.9 - Copies of Newspaper articles. * Ex.10. - Information Video. * Ex.11 - Location and Mine plan maps. * Copy of objection. * Copy of transcript 27/9/95. * Draft compensation/consent agreement. -- 15 of 18 -- 16 RECOMMENDATION: Having conducted the hearing and upon consideration of all the matters set forth in section 269 of the act, I recommend to the Minister that the mining lease be granted over the whole of the application area for a term of TWENTY-FIVE years. (s.269(4). Dated at CHARTERS TOWERS this 28th. day of September 1995. F.W. WINDRIDGE MINING WARDEN. -- 16 of 18 -- 17 SUMMARY SHEET NUMBER 10208 10208MLA.CHT D1/MD2.9/95 DISTRICT CHARTERS TOWERS WARDEN F W WINDRIDGE APPLICANT CHARTERS TOWERS GOLD MINES NL 70% CHARTERS TOWERS MINES NL 30% OBJECTOR Miss E.McCready AREA 570.30 subsurface area 8.50 surface. RESOURCE gold, silver, copper, lead, silica, zinc, associated infrastructure TERM 25 years COMPENSATION LODGED RECOMMENDATION GRANT -- 17 of 18 -- 18 DATE 28 SEPTEMBER 1995. TRANSMITTED 28 SEPTEMBER 1995. SECTION 269 and 270- MRA. 8,9,10 N.T.(Q)A 1993. CATCHWORDS native title. declared Gold/mineral field. gold mining leases. -- 18 of 18 --