BHP Minerals Pty Ltd, Re [1994] QMW 211

REPORT AND RECOMMENDATION OF WARDEN PURSUANT TO SECTION 7.26 AND 7.27 OF THE MINERAL RESOURCES ACT, 1989. IN THE MATTER OF: APPLICATION FOR MINING LEASES NUMBER 90059 and 90060 IN THE MT. ISA MINING DISTRICT. BEFORE: F.W. WINDRIDGE, WARDEN. APPLICANT: BHP MINERALS PTY LTD. REPORT: Application 90059 relates to an application for a mining lease for all purposes associated with and incidental to the mining and processing of ore more particularly specified in Part 20 and listed in the Certificate of Application dated 28 September 1994. The area applied for is 7869 hectares, and the term applied for is 35 years. A description of the land tenure and ownership is contained in Statement 3 attached to the application. This lease is known as the Cannington Mine Lease. Application 90060 relates to an application for a mining lease for all purposes associated with and incidental to the extraction of ground water and reticulation to the Cannington Mine Lease. Although this is the principal purpose, the applicant has included the extraction of certain minerals and materials should same be encountered in their borefield activities. The Certificate of Application more particularly specifies those minerals and [1994] QMW 211 -- 1 of 20 -- materials. Land tenure and ownership is contained in Statement 3 attached to the application. The area of this borefield lease is 610 hectares, and the term applied for is 35 years. This lease is known as the Cannington Borefield Lease. Both leases will be part of the Cannington Project. Power to grant such a lease is vested in the Governor in Council pursuant to section 7.3 of the act after recommendation by the Minister pursuant to section 7.28(1)(a). All minerals are the property of the crown (s.1.9). The grant of a lease does not create any estate or interest in the land (s.1.11), although there is the power to determine title to land (s.10.20(5). Both applications were lodged at the Mining Registrars Office at MOUNT ISA on 27 JULY 1994, and certificates of application were issued on 28 SEPTEMBER 1994, (s.7.18(1)(a), setting the last date for receipt of objections as 26 OCTOBER 1994. (S.7.18(1)(b). No objections were lodged pursuant to Section 7.20 of the Act. The following matters have been taken into account and considered in making my recommendations pursuant to Section 7.26(3). (A)HAVE THE PROVISIONS OF THE ACT BEEN COMPLIED WITH? The material indicates that the Applicant is an eligible person as defined in Section 1.8, and is thus entitled to make the application under Section 7.2 of the Act. -- 2 of 20 -- 3 I accept, on the material before me, that the land applied for is not within a reserve as defined in the act; that there is no building of the kind mentioned in section 7.6(a) (i) and (ii) on the land; and that there is no feature of the kind mentioned in section 7.6(2)(b) on the land or within 50 metres laterally of the land. While the application area is not "within" a reserve, some reserves are within the application area, in particular the road reserve along the boundaries of certain properties, and the bore, dam and camping reserve identified as Lot 3 on plan MN15. Each of these reserves are under the control of the McKinlay Shire Council. The Council under the signature of the Chief Executive Officer Mr.Glen Sowman dated 9 August 1994 has consented to the Reserves being included in the lease area. I find the application is therefore in respect of land over which, pursuant to Section 7.6 of the act, a mining lease shall not be granted without the consent of another person or persons, but that consent has been given. At the time of marking out and making the application for MLA 90059, the applicant was the holder of EPM 6788, EPM 8333, MDL 139, and MDL 144 (S.7.1). At the time of marking out the application for MLA 90060, the applicant was the holder of EPM 6788, EPM 8334 and EPM 8846 (S.7.1) Declarations of posting were lodged on the 9 NOVEMBER 1994. (S.7.18(5). -- 3 of 20 -- 4 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.11.6). Service of documents was in accordance with section 11.14. I find that I am satisfied that (a) the provisions of the act have been complied with; (b) there is no valid objection; and (c) the consent of any trustee has been given. I therefore dispense with the hearing under the provisions of section 7.27 of the act. (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 under MLA 90059 are minerals as defined in section 1.8 of the act, and the associated purposes of MLA 90060 are purposes permitted under Section 7.3(b) of the Act. The area is part of the North West Mineral Province and has been extensively explored for base metals. In respect of MLA 90059, a substantial ore body has been defined. Mine life is expected to be at least 20 years, with the possibility of further discoveries adding to this project. In respect of MLA 90060, a borefield supply -- 4 of 20 -- 5 is necessary to maintain the operations on MLA 90059. I accept the Applicants advice and I am satisfied on the detailed information given by them that the purpose for which the leases are sought is appropriate. The ore body has been defined by detailed surface drilling. The borefield lease is necessary to support the principal mining activity which will be on 90059. The economic viability of the project is a matter for the applicants commercial assessment, and not a matter for this Court. However, with any upturn in the world economic outlook, the applicant will be well placed to take advantage of any market demands in the near future. (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 applicant is a leading miner and metals producing company. I am satisfied the applicant can raise the necessary development funds from its own cash flows, shareholder contributions or world financial institutions. (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 -- 5 of 20 -- 6 mining lease is sought is not an appropriate size and shape. The area has been test drilled to define the location of the ore body. The borefield lease follows the pipeline necessary to get the water to MLA 90059. (E)IS THE TERM SOUGHT APPROPRIATE? The term of lease applied for is 35 years. I am satisfied that the term sought is appropriate and will allow for mining and rehabilitation to be completed. The applicant plans to extract ore for 20 years from the known resource, with the possibility of an extended mining life if further deposits are located and exploited. The applicant has the option of renewal under section 7.43 of the act if mining is not completed, or surrender at an earlier date under section 7.64 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. The applicant is currently engaged in mining on other leases -- 6 of 20 -- 7 in Queensland and other parts of Australia for base metals and coal, 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 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. It would be appropriate if before mining commences, the applicant produce to the Inspectorate a copy of or outline of the induction courses that the applicant will conduct for miners, contractors and visitors. To promote a better awareness of safety amongst mine personal, all tender documents should contain the need to submit certified Lost Time Injury Frequency Rates (L.T.I.F.R.) and show a demonstrated commitment to risk analysis and hazard management controls. Safe working practices and relevant industry codes of practice must be followed at all times. Poor safety performance in variance from industry standards would justify termination of a contract or -- 7 of 20 -- 8 rejection of a tender in the first instance. Guidelines for general conditions of contract to cover contractor safety are about to be issued. The applicant should give a commitment to follow those guidelines as a minimum requirement for contractors. This is important because more work is being completed on mining leases by independent contractors even after the development phrase has been completed, e.g. maintenance. It is of some concern to the Court which from time to time conducts Inquiries into the nature and cause of fatal accidents that there may be times when there is a suspicion that the use of illicit drugs have contributed to an accident. Miners and contractors should be made aware that use or possession of dangerous or illicit drugs on, in or around a mine site is a serious breach of safe working practices and could be a reason for instant dismissal. Mining leases and buildings constructed on mining leases are the property of the mine owner who can consent to and conduct a search for illegal material or dangerous material at any time. With a number of large mines due to commence operation in the north western area in the near future, the Chief Inspector will need to monitor staff levels at Mount Isa to ensure that there is sufficient staff available to monitor and enforce the Regulations. I am aware that the duties of current staff are quite often fully occupied with the other large miner in the area i.e. Mount Isa Mines. With "Century", "Ernest Henry" and "Osborne" all due to commence operations within the foreseeable future, staffing levels may need -- 8 of 20 -- 9 to be increased to cope with the increased workload. Most of these newer mines are some distance from Mt. Isa which means increased length of absences from headquarters with increased travelling times. It may be necessary and indeed desirable from the health and safety aspect that some form of mobile communication be installed for vehicle to vehicle and vehicle to base contact. I am also aware that it is difficult to recruit suitable staff with the necessary qualifications and experience from the industry to the Inspectorate if the Department does not offer conditions of employment and renumeration currently existing in the industry. To attract and keep the necessary qualified and experienced personnel, the Department of Minerals and Energy may well need to examine and upgrade conditions of employment where necessary, particularly where the expansion in the base metals industries may well mean that their experience and qualifications are keenly sought by industry. A Regional Environmental Officer will be appointed to the Mount Isa District in the near future, and this specialist officer will be able to relieve the Field Officer of environmental duties and monitor performance of the applicant under the EMOS which legally binds the applicant. (H)WILL THE OPERATIONS TO BE CARRIED ON UNDER THE PROPOSED MINING LEASE CONFORM WITH SOUND LAND USE MANAGEMENT? The land appears to be used for low intensity grazing and it seems -- 9 of 20 -- 10 the proposed mining operation will cause no significant disturbance to stock, 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. (I)WILL THERE BE ADVERSE ENVIRONMENTAL EFFECTS CAUSED BY THE PROPOSED OPERATION, AND IF SO, THE EXTENT THEREOF? The proposed mining activity is in an isolated area away from human habitation. There will be no adverse effect on the local environment that cannot be managed. Mineral treatment activities on site will be some primary crushing and processing and appear to be planned in such a way as to be unlikely to have a deleterious effect on any river system. Concentrate is to be transported by road to a rail loading facility. The rail loading facility some 17 kilometres east of Cloncurry is to be the subject of a separate application. However, environmental matters relating to this facility have been addressed in the EMOS and TIIA documents. When appropriate, the lease over the loading and handling site can be brought into the Cannington Project and the EMOS amended accordingly. At the completion of the project, any water catchment dams can be with the consent of the landowner, left as watering points for stock -- 10 of 20 -- 11 or native fauna, or decommissioned in the approved way. A draft EMOS has been lodged and assessed by the Department and "Advisory Bodies". The Director of Minerals by letter dated 27 October 1994 advised through a Preliminary Environmental Assessment (PEA) that the advisory bodies had some concerns and certain matters needed to be addressed by the applicant. By an advice dated 16 November 1994, the Director of Minerals advised that the revised EMOS and TIIA had been lodged and found to be satisfactory and acceptable. I am concerned that page 7 of the PEA appears to contain matters extraneous to environmental concerns. The Department should be on their guard against any advisory body that is "invited" into the assessment of environmental matters abusing their position as an advisory body to seek other advantages on other issues. The inference is that an advisory body may withhold consent to an EMOS unreasonably to gain an unfair advantage in other negotiations, i.e. employment contracts, consultancies, or compensation. Such a stance by an advisory body would be an abuse of process and would be speedily rectified by the Court in the form of injunctions and restraining orders. (J)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 -- 11 of 20 -- 12 there are no public utilities running on or across the application land. The right of way of any person will not be affected. A telecom tower ( RTV Mast) is situated just inside the lease boundary of MLA 90059. Telecom have given their consent to the application on the condition that BHP will reimburse the Telstra Corporation for all costs if relocation of the installation is required. I am informed that for the construction of the decline by Peabody, the A.W.U. has a site agreement with dispute and grievance handling procedures. It would appear that there has been some initial discussion between the AWU and the applicant in relation to industrial matters. It is essential that any award or agreement contain Dispute and Grievance Procedures. The road alignment from the mine site to McKINLAY will have little impact on local graziers and in fact the upgrading of the road to a fully sealed all weather condition would be a distinct advantage. From a perusal of documents supplied under a study of transport requirements and road use, I am aware that three options were available for mine traffic coming to and from the mine site. They were (a) to maintain the existing route and allow laden and unladen trucks to drive through town to a left hand turn on to the Landsborough Highway; (b) to construct a western bypass alternative route bringing the mine traffic on to the Landsborough Highway north of the town; and (c) to construct an eastern by pass alternative bringing mine traffic on to the Landsborough Highway south of the town, and then proceed through town. -- 12 of 20 -- 13 In my opinion the only viable option is to construct a western bypass route, thereby avoiding the necessity of bring heavily laden trucks into town. Noise and dust pollution and traffic hazards will be largely avoided if the western bypass route is used. It will only take one fatality involving a local resident or a tourist bus to invite the obvious question from the Coroner " why wasn't a bypass route constructed. " I consider that local objections to any perceived loss of the tourist trade are a fallacy. The trucks are not likely to be stopping for fuel or refreshments, and would constitute a grave danger to tourist traffic including buses and caravans, particularly at the intersection. In fact, it may be an opportune time for the Department of Transport to look at the feasibility of diverting all through traffic to the eastern side of the township by a complete re-alignment of the Landsborough Highway. If tourists desire to enter town to purchase fuel or refreshments, then they are still quite able to do so, and a bypass road will be safer in the long term for all traffic including local traffic. Earthen noise barriers could be constructed along the bypass road to ameliorate noise from traffic using the bypass. 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. The applicant has indicated -- 13 of 20 -- 14 that staff and contractors will be instructed in this aspect prior to entry onto the lease. (K)HAS ANY GOOD REASON BEEN SHOWN FOR A REFUSAL TO GRANT THE MINING LEASE? The applicant has given a commitment to quality assurance. 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 1.3 (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)the location of the proposed mining operation and the method of mining is unlikely to cause environmental or public interest concerns. (3) 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. (4) the applicant appears to have sufficient experience in the industry to accurately assess the potential of the project. (5) there is a market for the product and the sale of the product to overseas clients will provide export income. (6) The project will provide meaningful long term employment for a large number of persons in a remote part of the state where employment opportunities have always been -- 14 of 20 -- 15 limited, and income for the state in the form of royalties. 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 7.20 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 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 7.18(3)(d) is intended to notify any person who does not fall within the definition of "owner" as defined in Section 1.8 of the Act. The application area is situated within pastoral leases granted over the area by the State of Queensland. It would appear that this grant 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) Even assuming that "native title" was not extinguished by prior grant and was able to co-exist with the mining title, and a person was able to substantiate his status as "an owner", any claim for compensation would be restricted under Section 7.38(3) of the Act and in all probability, subject to the evidence admitted, a minimal or nominal award would be the final result. In my view no good reason has been shown for a refusal to grant the -- 15 of 20 -- 16 lease application (Carr V Simnovec, Pacminex V Aust. Nephrite Jade Mines .) (L)IS THE PROPOSED MINING LEASE OPERATION AN APPROPRIATE LAND USE, TAKING INTO CONSIDERATION THE CURRENT AND PROSPECTIVE USES OF THE LAND? The material indicates that the land not currently owned by the applicant is currently used for grazing purposes and appears, on the evidence and subject to any further evidence that may be tendered in any compensation hearing, to be suitable for no other use. 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 applicant is in the process of obtaining title to the land contained in the principal mining lease. Negotiations with the landowners in respect of compensation are continuing for the borefield lease. 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 of the borefield lease. (s.7.36). I note that a compensation agreement has not been filed with the Registrar in accordance with section -- 16 of 20 -- 17 7.36(2 of the act. If not lodged within three months of the date of this recommendation, or earlier at the request of one of the parties, the Registrar is bound to refer the matter of compensation to the Wardens Court for determination. 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 10.20(4) APPENDICES: The following documents are appended: * Copy of declarations (2) dated 8 Nov. 1994. * Questionnaires (2) completed on 8 Nov. 1994. * Copy of Applications 90059 and 90060. * Copy of Report to Shareholders - 1993 - Financial. * Copy of Report to Shareholders - 1993 - Statistical. -- 17 of 20 -- 18 * Copy of Report to Shareholders - 1993. * Copy Initial Environmental Statement. RECOMMENDATION: Having dispensed with the hearing and upon consideration of all the matters set forth in section 7.26(3) of the act, I recommend to the Minister that both the mining leases be granted over the whole of the application areas for a term of 35 years, (7.26(2)(a), subject to lodgment of a compensation agreement in respect of MLA 90060 or determination of compensation by the Court. Dated at BRISBANE this 22nd day of November 1994. F.W. WINDRIDGE MINING WARDEN. -- 18 of 20 -- 19 SUMMARY SHEET NUMBER 90060 90060MLA.ISA D1/MD11.11/94 DISTRICT MOUNT ISA WARDEN F W WINDRIDGE APPLICANT BHP MINERALS PTY LTD. OBJECTOR NIL AREA 610 ha RESOURCE COPPER GRAVEL GRAVEL LEAD LIMESTONE QUARTZ SAND SILVER ZINC, EXTRTACTION OF GROUNDWATER AND ITS RETICULATION. TERM 35 years COMPENSATION OUTSTANDING RECOMMENDATION GRANT -- 19 of 20 -- 20 DATE 22 NOVEMBER 1994 TRANSMITTED 22 NOVEMBER 1994. 3.00 PM FWW SECTION 7.26 and 7.27 MRA CATCHWORDS -- 20 of 20 --