Northern Territory Mining Regulations

Brett Cohen Partner - Clayton Utz

Mining the Territory Conference Darwin, 11 September 2013

© Clayton Utz

The mining industry

• The Territory's largest

• Over 20% of GSP

• $2.5b in revenue

• Employs around 5000 people

• However, vast areas remain under-explored, and

quality projects remain undeveloped

• A climate of constrained access to capital - Vital that

regulations are proportionate and cost-effective

Mining and exploration in the Territory

• Snapshot of the NT regulatory framework

• The NT Mining Management Act (MMA)

• Wholesale recent changes to the MMA

• Environmental securities

• New levy on mining rehabilitation securities

The NT regulatory framework

• Combination of NT and Commonwealth laws regulate

mining activities

• Fraser Institute survey 2012 - NT the top ranked

jurisdiction in Australia for ease of doing business in

minerals exploration and mining investment

• Maintaining the right regulation balance between

facilitating business activity, and community benefits

Mining activities - primary laws

Titles and tenure

Mineral Titles Act (NT)

Regulates grant and

administration of tenure for mining

activities

Titles and authorities for

exploration, mining and associated

infrastructure

Native Title Act (Cth) and

Aboriginal Land Rights (NT) Act

(Cth) also relevant to grants of

tenure

Conducting mining activities

Mining Management Act (NT)

Regulates safety, health and

environmental aspects of mining

activities

Authorisations required for mining

activities

Management and monitoring of

mining activities; environmental

rehabilitation securities

Significantly amended and

strengthened in recent years

Mining activities - (some) other major laws

Environmental regulation Waste Management and Pollution Control Act (NT)

Environmental Offences and Penalties Act (NT)

Environmental assessments

Environmental Assessment Act (NT)

Environment Protection and Biodiversity Conservation

Act (Cth)

Native title and Aboriginal land rights

Native Title Act (Cth)

Aboriginal Land Rights (NT) Act (Cth)

Heritage and sacred sites

Northern Territory Aboriginal Sacred Sites Act (NT)

Heritage Act (NT)

Dangerous goods

Dangerous Goods Act (NT)

Transport of Dangerous Goods by Road and Rail

(National Uniform Legislation) Act (NT)

Health and safety

Work Health and Safety (National Uniform Legislation) Act (NT)

Water

Mineral Titles Act (NT)

Water Act (NT)

Royalties

Mineral Royalty Act (NT)

Uranium Royalty (Northern Territory) Act (Cth)

Primary agencies and regulators

NT Department of Mines and Energy Mineral titles

Mining Environmental Compliance Division

NT Geological Survey

Native Title and Aboriginal Land Rights Unit

NT Environment Protection Authority

Environmental assessments

Environmental approvals and licences

Cth Department of the Environment,

Water, Heritage, and the Arts

Commonwealth environmental assessments

NT Worksafe

Occupational health and safety

Dangerous goods regulation

NT Department of Lands, Planning and the Environment

Heritage administration

Department of Land Resource Management

Pastoral land administration

Part 4 MMA - Conducting mining activities

To conduct "mining activities" in the NT, require the following

under the MMA:

• valid title ("mining interest") under Mineral Titles Act (Part 4,

Div 1)

• an Authorisation under MMA (Part 4, Div 2)

• submit Mining Management Plan under MMA (Part 4, Div 3)

• lodge security under MMA (Part 4, Div 4)

Part 4 Div 2 MMA - Authorisation of mining activities

"mining activities" defined in s.4 MMA:

• exploration for minerals

• mining for minerals

• processing of minerals, tailings, waste

• decommissioning or rehabilitating a mining site

• handling, transport and storage of minerals, contaminants, waste

• construction, operation, maintenance and removal of plant and buildings

• construction and maintenance of mining-related infrastructure

• operations for care and maintenance of a mining site

When does exploration require an Authorisation?

Under s.35 MMA, only exploration involving "substantial disturbance" of a mining

site requires an Authorisation, that includes:

• land clearing; earthworks (e.g. cutting, filling, excavating, or trenching)

• above-ground works (e.g. roads, buildings, bridges, railways, airstrips,

conveyors, pipelines, telephone lines or powerlines)

• below-ground works (e.g. tunnels, wells, pipelines, conduits, cables)

• waterworks (e.g. dams, canals, drainage or alteration of water courses)

• extracting resources from the land

• stockpiling ore, overburden, waste materials or by-products

• establishing an exploration/workers' camp

• blasting

• activity that is likely to have a significant impact on flora or fauna

When does exploration not require an Authorisation?

According to DME guidance, no "substantial disturbance" for:

• remote sensing, including geophysical surveying (although

active remote sensing and seismic techniques in water do

constitute a "substantial disturbance")

• non-intrusive actions such as fossicking, rock chipping and

soil sampling by non-mechanical means (to assess land's

potential for future exploration - s.17 Mineral Titles Act)

Part 4 Div 3 MMA - Mining Management Plan

Under s.40 MMA, a Mining Management Plan must include the following:

• details of the mining interest (title) held relating to the mining activities

• details of the ownership of the mining interest

• description of the mining activities the Authorisation is required for

• organisational structure details for carrying out the mining activities

• details of the relevant management system for the mining site

• plans of proposed and current mine workings and infrastructure

• plan and costing of closure activities for mining site

• other details and plans as may be required by the Minister

Part 4 Div 4 MMA - Environmental rehabilitation securities

Operator is responsible for rectifying environmental harm arising from

mining activities, and for rehabilitation of affected area

Under s.43 MMA, a security (in the form of cash or bank guarantee)

required in relation to an Authorisation secures any of the following:

• operator's obligation to comply with MMA or an Authorisation

• payment of costs and expenses to prevent, minimise or rectify

environmental harm on a mining site or resulting from mining activities

• payment of costs and expenses to complete rehabilitation of a mining

site

Security is released once criteria specified in the approved closure plan

have been met, upon proof that rehabilitation is adequate

Calculation of environmental securities • Costing of closure activities required in MMP (s.40 MMA)

• Minister determines level of security by balancing protecting the community

from closure liabilities and optimising benefits to the community from

proposed project

• Default expectation is 100% of security calculated for rehabilitation.

Calculation based on actual cost of rehabilitation commensurate with size,

environmental risk and expected project life

• Operator completes self-assessment, by reference to security calculation

form that indicates costs for different disturbances

• Additional security amount then added to fund contingencies arising from

failure of rehabilitation and cover post closure costs (e.g. monitoring,

maintenance, site visits, remediation etc) - currently 15%

Recent changes to MMA - effective 1 July 2012

Result of comprehensive review, implemented wholesale changes to the MMA:

• broadening of environmental offence provisions, and increased penalties

• wider notification requirements for all environmental incidents - previously

only "serious accident or critical incident"

• power for CEO to direct operators to investigate and report on environmental

incidents, and CEO's discretion to publish report

• annual report on environmental performance for minerals mining

• clarification of activities requiring an Authorisation

• changes to process for granting and varying Authorisations

• Minister may require provision of social and economic benefits to

communities affected by mining activities

Recent changes to MMA - effective 1 October 2013

Further changes to MMA:

• non-refundable annual 1% levy on securities - establishment of Mining

Rehabilitation Fund

• removal of mandatory annual report on environmental performance

introduced in 2012 - now affected sites determined by Minister

• extended period for commencing proceedings for offences under the MMA -

3 years up from 12 months

• DME ability to recover costs for investigations and successful prosecutions

• may prescribe minimum security amount by Regulation

• clarification (widening?) of power to make Regulations to impose fees and

charges

Levy on mining rehabilitation securities

• Non-refundable 1% levy on securities, calculated by reference to total

calculated rehabilitation cost

• Decrease of 10% in total security amount payable by operators

(effectively taken from 15% contingency fee applied to securities)

• Primary objective to generate funds to address environmental issues

on legacy mine sites - establishment of Mining Rehabilitation Fund.

33% of funds generated from levy paid into Fund

• 90% of current authorised operators who lodge securities will pay

annual levy of $2,000 or less per site, and 74% will pay a levy of $500

or less per site. Around 5% will pay in excess of $10,000 per site

Levy - DME worked examples (cash securities)

Smaller operator Larger operator

Current security $10,000

Apply 10% discount $9,000

Cash refunded to operator $1,000

1% levy payable $90

Current security $5,000,000

Apply 10% discount $4,500,000

Cash refunded to operator $500,000

1% levy payable $45,000

Contact details

Brett Cohen

Partner - Clayton Utz

Corporate - Energy & Resources

bcohen@claytonutz.com

(08) 9426 8462

0434 154 196

www.claytonutz.com