Cape Flattery Silica Mines Pty Ltd, Re [1992] QMW 54

REPORT AND RECOMMENDATION OF WARDEN PURSUANT TO SECTION 7.27 OF THE MINERAL RESOURCES ACT, 1989-1990. IN THE MATTER OF: APPLICATION FOR MINING LEASE NUMBER 7069 IN THE CAIRNS MINING DISTRICT. APPLICANT: CAPE FLATTERY SILICA MINES PTY. LTD. OBJECTORS: NIL. REPORT. This Application for mining lease for the purpose of mining silicon, rutile, zircon, monazite and ilmenite and for the construction of a power house, gravity separation plant, dam wall and settling pond is for 585 hectares (after substantial partial abandonment of an area originally applied for) situated at Cape Flattery north of Cooktown. The Application was lodged at the Mining Registrar's Office at Cairns on 27th February, 1990 and a certificate of application was issued on the 27th May, 1991 setting the last date for receipt of objections as 24th June, 1991. The Application is deemed under Clause 3(10)(c) of the Second Schedule to the Mineral Resources Act, 1989-1990 to be an application for mining lease under that Act. The additional information required by paragraph (d) of Clause 3(10) has been lodged by the Applicant. No objections were lodged. The following matters have been taken into account and considered by me in making my recommendation: (A) HAVE THE PROVISIONS OF THE MINERAL RESOURCES ACT BEEN COMPLIED WITH? The material indicates that the Applicant is an eligible person. The land applied for is within land owned by the Hope Vale Aboriginal Council as a Deed of Grant in Trust. Consent to the grant of the Mining Lease was given by the Owner on 9th July, 1992. I accept, on the material before me, the Application is not otherwise in respect of land over which, pursuant to Section 7(6) of the Mineral Resources Act, 1989-1990, a mining lease shall not be granted without the consent of another person or persons. A declaration of posting was lodged on the 27th June, 1991 and I am satisfied on the material, including the [1992] QMW 54 -- 1 of 6 -- uncontested information in the application form and the declaration of posting and advertising that all the provisions of the Mineral Resources Act, 1989-1990 (other than section 7.1 and the provisions requiring the hearing) have been substantially complied with. The hearing is dispensed with pursuant to 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? The land applied for is within a well known zone of silica sand mineralisation. I accept the Applicant's advice that the site contains estimated reserves of 65 million tonnes. In view of this advice I am satisfied that the land applied for is mineralised. I am also satisfied, on the information given by the Applicant, that the other purposes for which the lease is sought, namely the construction of a power house, gravity separation plant, dam wall and settling pond, are appropriate. (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? Preparation of designs and engineering plans will commence immediately after grant of the Mining Lease. Estimated cost of bringing the mine into full production is $30M and the necessary work, which will take 4 years, will commence about September, 1994. Planned annual production rate when fully operational is 1 million tonnes. There is nothing in the material which indicates that the Applicant is unable to conduct a mining operation at the proposed level. In my view there will be an acceptable level of development and utilisation of the mineral resources within the area applied for. (D) IS THE LAND AND THE SURFACE AREA OF LAND IN RESPECT OF WHICH THE MINING LEASE IS SOUGHT OF AN APPROPRIATE SIZE AND SHAPE? The area and shape has been reduced from its original 3667 hectares to 585 hectares in consultation with the Owner and has regard to the area of mineralisation and the availability of water supplies. -- 2 of 6 -- 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. (E) IS THE TERM SOUGHT APPROPRIATE? The term of lease applied for is 21 years. The information given indicates that the deposit of an estimated 65 million tonnes mined at the proposed rate of 1 million tonnes per year will not be worked out within that time. I am satisfied that the term sought is appropriate. (F) HAS THE APPLICANT THE NECESSARY FINANCIAL AND TECHNICAL CAPABILITIES TO CARRY ON MINING OPERATIONS UNDER THE PROPOSED MINING LEASE? The Applicant Company has operated a silica sand mining operation at Cape Flattery since 1968 and has since 1978 been wholly owned by Mitsubishi Corporation. Evidence has been produced in relation to the Applicant's financial and technical capacity to carry on mining operations under the proposed lease, and indicates that the Applicant's paid up capital is $4,400,002; the shareholder's reserves presently total $10,361,356 and operating profit for 1990/1991 was $2,739,857. Improvements belonging to the Applicant on adjoining leases which will be used in the overall mining operation are valued at $70M. I have no reason not to accept the Applicant's advice and I am satisfied that the Applicant has the necessary financial capability and that it has sufficient technical expertise to properly carry on the proposed mining operation under the proposed lease. (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 unsatisfactory. (H) WILL THE OPERATIONS TO BE CARRIED ON UNDER THE AUTHORITY OF THE PROPOSED LEASE CONFORM WITH SOUND LAND USE MANAGEMENT? The evidence suggests that in the operation to be carried on under authority of the proposed mining lease the -- 3 of 6 -- Applicant will construct a 300 tonnes per hour gravity separation mill on site and transfer the product of mining by conveyor apparatus through proposed Mining Lease 40048 to Mining Lease 2806 for shipping at the Applicant's port facility at Cape Flattery. The mining operation will be conducted in accordance with an agreed EMOS and Plans of Operation approved from time to time. There has been no mine working plan submitted at this stage but the information produced in support of the Application leaves me with no reason to believe that the proposed mining operations will not conform with sound land use management. (I) WILL THERE BE ADVERSE ENVIRONMENTAL EFFECTS CAUSED BY THE PROPOSE OPERATION, AND IS SO, THE EXTENT THEREOF? Treatment of minerals on site and the proposed excavations appear unlikely to affect any river system and mining will be conducted in accordance with plans of operations and a "whole of mine" EMOS produced in consultation with the Department of Minerals and Energy, the Hope Vale Community and conservation interests and approved by the Department of Minerals and Energy. It seems certain that adverse environmental effects will be adequately identified and addressed in the proposed consultative process. (J) WILL THE PUBLIC RIGHT AND INTEREST BE PREJUDICED? No factors prejudicial to the public right which will not be addressed in the consultative process mentioned in Part (I) have been identified. (K) HAS ANY GOOD REASON BEEN SHOWN FOR A REFUSAL TO GRANT THE MINING LEASE? In my view, apart from the matter discussed in Part (A), no good reason has been shown for a refusal to grant the mining lease. (L) IS THE PROPOSED MINING OPERATION AN APPROPRIATE LAND USE, TAKING INTO CONSIDERATION THE CURRENT AND PROSPECTIVE USES OF THE LAND? The material presented by the Applicant indicates that the land could be used for very limited cattle grazing -- 4 of 6 -- purposes and appears, on the evidence, to be suitable for no other commercial use. In my view, no evidence has been presented to show 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 in these proceedings, an appropriate land use, taking into account the current and prospective uses of the land. APPENDICES The following documents are appended: * Copy of Declaration of Posting and Advertising; * Copy of Affidavit dated 12th November, 1992 lodged by the Applicant; * Deeds of Compensation "A" and "B" between the Applicant and the Owner; * Copy of Owner's consent to grant of the Mining Lease dated 9th July, 1992; * Copy of Applicant's Certificate of Incorporation; * 1989/1990 and 1990/1991 Annual Reports of the Company. RECOMMENDATION I recommend to the Honourable, the Minister that the Mining Lease be granted. Mareeba 24 November 1992 Warden -- 5 of 6 -- -- 6 of 6 --