ARTICLE
16 May 2018

Changes to control regime for mining permits

Article discusses changes to control regime for mining permits if and when the Crown Minerals Amendment Bill is passed. .
New Zealand Energy and Natural Resources

The Crown Minerals Amendment Bill has gone through its first reading and is now with the Economic Development, Science and Innovation Committee, although submissions have not yet been called.

The Bill began life under the previous National-led government and has support on both sides of the House.

Changes affecting tier one permit operators

Currently, a change in control can be notified to Energy & Resources Minister Megan Woods after the fact, and she has a three month window in which to revoke the permit if not satisfied that the financial capability standards are still being met.

The Bill:

  • requires Ministerial consent prior to the change taking effect. Failure to obtain this risks revocation, and
  • expands the matters that the Minister can take into account beyond financial competence to the operator's ability to comply with the work programme, pay royalties to the Crown and have adequate health and safety systems in place.

If enacted, these changes mean that any agreement resulting in a change of control of a tier one permit operator should be conditional on obtaining Ministerial consent.

Changes for other permit participants

The most significant change affecting non-operator permit participants is that the period within which the Minister can revoke a permit following a change in control would be the later of three months from:

  • the date of the notice, or
  • the date that the participant has provided all of the information that the Minister needs to be satisfied as to their financial capability.

The effect of these proposed provisions will be to extend the timeframe within which the Minister can exercise her discretion and to open up the prospect of more and deeper information requests from NZ Petroleum and Minerals.

In other contexts (such as the overseas investment and merger clearance regimes) this can result in application timetables blowing out significantly – which applicants and advisers will need to keep in mind.

Other changes

The Bill proposes a series of other relatively minor technical amendments aimed at improving the effectiveness and efficiency of the permitting regime.

The information in this article is for informative purposes only and should not be relied on as legal advice. Please contact Chapman Tripp for advice tailored to your situation.

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