Ernest Henry Mining Pty Ltd, Re [1993] QMW 236

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 LEASE NUMBER 90041 IN THE MOUNT ISA MINING DISTRICT. BEFORE: F.W. WINDRIDGE, WARDEN. APPLICANT: ERNEST HENRY MINING PTY LTD. REPORT: This Application for a mining lease under section 7.1 of Part 7 of the Mineral Resources Act 1989 (the act) for the purpose of mining for SILVER, GOLD, COBALT, CHROMITE, COPPER, IRON, MAGNETITE, NICKEL, LEAD, TITANIUM and ZINC is for an area of 92.77 hectares situated on FORT CONSTANTINE holding namely PH 13/80 being land described within Certificate of Title Volume 7666 Folio 2 and more particularly described as Lot 80 on Plan PH 831, about 42 kilometres from Cloncurry. 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). The Application was lodged at the Mining Registrars Office at [1993] QMW 236 -- 1 of 12 -- MOUNT ISA on 17 NOVEMBER 1993 and a certificate of application was issued on 17 NOVEMBER 1993 (s.7.18(1)(a), setting the last date for receipt of objections as 8 DECEMBER 1993 (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. The applicant is registered as a company under ACN 008 495 574 and has produced documentation to that effect from the Australian Securities Commission. 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. I find the application is therefore not 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. -- 2 of 12 -- 3 At the time of marking out and making the application, the applicant was the holder of PROSPECTING PERMIT 90164 (S. 7.1). EPM 8648 covers the application area, but by a Deed of Acquisition and another agreement, the applicant has the consent of the holder of such EPM for any grant to occur. A declaration of posting was lodged on the 9th of DECEMBER 1993. (s.7.18(5) at the office of the Registrar, Mt. Isa. 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 or other person is not required. Consent in the form of a compensation agreement has been filed in respect of Section 7.6 and Section 7.68 of the Act. 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 -- 3 of 12 -- 4 WHICH THE LEASE IS SOUGHT APPROPRIATE? I am satisfied that the resources sought as listed on the Certificate of Application are minerals as defined in section 1.8 of the act. I accept the Applicants advice and I am satisfied on the detailed information given by them that the purpose for which the lease is sought is appropriate. The area is located generally in what is recognised as the North West Mineral Province. Land within this area has and is still being intensely explored to determine its potential as an ore producing area. The economic viability of the project is a matter for the applicants commercial assessment, and not a matter for this Court. No doubt such assessment will depend on the results of exploration, costs of development and world commodity prices. (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. Sufficient details are provided in the Item 23 statement and the 1993 Report to Shareholders to indicate that the applicant has the ability to generate or draw on financial reserves sufficient to develop the lease. -- 4 of 12 -- 5 (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 lease area covers the known mineralisation and has been surveyed. (E)IS THE TERM SOUGHT APPROPRIATE? The term of lease applied for is 21 years. I am satisfied that the term sought is appropriate and will allow for mining and rehabilitation to be completed. 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. Information contained in the Item 23 statement indicates the applicant through M.I.M. has access to significant mining and -- 5 of 12 -- 6 technical experience.In my opinion the applicant 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. (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 the proposed mining operation will cause no significant disturbance to stock or stock watering or management facilities that cannot be compensated for by a compensation agreement. 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 -- 6 of 12 -- 7 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. 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. It appears from documentation supplied at this early stage that open pit mining will be the principal method of extraction (at least initially) with some processing of ore on the lease. At the completion of the project, any tailings dams can be with the consent of the landowner, left as watering points for stock or native fauna, or decommissioned in the approved way. An EMOS has been lodged is currently being assessed by the Department of Minerals and Energy. (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 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 -- 7 of 12 -- 8 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. (K)HAS ANY GOOD REASON BEEN SHOWN FOR A REFUSAL TO GRANT THE MINING LEASE? 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)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 for about 180 persons, provide royalty income for the State and export income for Australia. -- 8 of 12 -- 9 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 a pastoral lease 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 lease application (Carr V Simnovec, Pacminex V Aust. Nephrite -- 9 of 12 -- 10 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 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 is a risk of significant conflict between the current land use, or any prospective land use, and the proposed mining operation, given the nature of the mining and the area involved. However, I am satisfied that a compensation agreement can take into account all the relevant factors. 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.7.36). I note that a compensation agreement has been filed with the Registrar in accordance with section 7.36(2 of the act. This recommendation is based on an assessment of the information supplied. Should there be any dispute over damage or loss, or should -- 10 of 12 -- 11 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: * Affidavit of K.L.PARIKKA on behalf of applicant. * Copy of compensation agreement dated 9 December 1993. * Copy of Questionnaire dated 8 December 1993 with annexure. * Certificate of Registration of a Company. 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 Honourable , the Minister that the mining lease be granted over the whole of the application area for a term of 21 years -- 11 of 12 -- 12 (s.7.26(2)(a), subject to the acceptance by the Department of a satisfactory EMOS and/or EIS statement. Dated at BRISBANE this 22nd day of December 1993. F.W. WINDRIDGE MINING WARDEN. -- 12 of 12 --