Australia: Mining licences not an ‘access all areas' pass for exploration

On 10 May 2016, Chief Justice Preston of the Land and Environment Court (Court) overturned a decision made last year by the Mining Commissioner in relation to Korean-owned mining company Hume Coal Pty Ltd (Hume Coal accessing land for prospecting, in Martin v Hume Coal Pty Ltd [2016] NSWLEC 51.

The Chief Judge found that access to land is a right within the scope of an exploration licence and accordingly, cannot be exercised within prescribed distances of homes, gardens or "significant improvements" under the Mining Act 1992 (NSW) (Mining Act). The decision sets an important precedent both for landowners whose properties are the subject of an exploration licence, and mining companies who hold such licences and wish to exercise the rights conferred by them.In this case note, we highlight key features of the decision.

This is the second decision by the Mining Commissioner under the Mining Act which has been overturned by the Court. In Hall v O'Brien [2015] NSWLEC 200, the Court also found that the Mining Commissioner had misinterpreted the manner in which access management plans are regulated under Part 10A of the Mining Act.

The facts

Five landowners (Landowners) whose Southern Highlands properties lie within the area of an exploration licence held by Hume Coal received notice under section 142 of the Mining Act of Hume Coal's intention to seek access to each of the Landowners' properties (Notice).  A dispute arose as to whether access could occur within certain distances of various improvements on those properties. Section 31 of the Mining Act prohibits licence holders exercising any rights under an exploration licence within prescribed distances of dwelling houses, gardens or other significant improvements.

Hume Coal contended that its licence conferred only the right to prospect on the land, and accordingly the proximity restrictions applied only in respect of prospecting operations. On this basis Hume Coal argued, and the Mining Commissioner found in the first instance, that access is not a right under the licence but rather granted by the Landowners or imposed pursuant to Part 8 of the Mining Act. This meant that Hume Coal could access any part of the Landowners' properties, irrespective of any improvements. The Landowners disagreed and appealed the Mining Commissioner's decision.

Was access an implied right of the licence?

The Court found that access was an implied right conferred by the licence. Although section 29 of the Mining Act and the conditions of Hume Coal's licence did not expressly confer a right to access, the right to prospect necessarily implies the right to do all things necessary to exercise that right, including accessing all parts of the land by vehicle, transporting equipment for prospecting to and from the land and transporting samples removed from the land for testing.  Furthermore, one of the licence conditions permitted Category 1 prospecting operations, defined under the licence as development to which clause 10(2) of the Mining State Environmental Planning Policy  (Mining, Petroleum Production and Extractive Industries) 2007 (Mining SEPP) applies. Clause 10(2) of the Mining SEPP includes 'accessing areas by vehicle' within its scope.

What are significant improvements?

Having found that the licence included access rights, the exercise of which are restricted by section 31 of the Mining Act, the Court then had to determine whether certain improvements on the Landowners' properties were significant improvements to which those restrictions applied.

The Court determined that the equestrian course, cattle laneways and irrigation pipes were 'substantial' and 'valuable' structures, and hence significant improvements to which section 31 applied.

In relation to the improved pastures and lucerne, the Court highlighted the established common law definition of 'work', being the physical result of labour conducted on land rather than the process of labour itself. Whether an improvement is a 'work' depends on the nature and extent of what has been done, and its significance in relation to the site on which it is situated. The Court found that improved paddocks which are the product of sufficient labour are capable of being defined as a 'work', and hence could be significant improvements to which section 31 applied.

The Court was also asked to determine the relevant date for assessing improvements, as the Landowners had erected fences after receiving Hume Coal's Notice. Notwithstanding Hume Coal's argument, that the date for determining any "significant improvement" under section 31 should be the date the Notice is served, the Court found that the proximity limitations imposed by section 31 apply at the time the rights under the licence are exercised.

What this case means

This case sets an important precedent which constrains mining companies' ability to access land under prospecting licences and throws into sharp relief the conflict between mining companies and landowners. Like prospecting operations, access to land cannot be conducted within certain proximities of dwelling houses, gardens or significant improvements, which include 'works' such as improved paddocks and 'structures' such as an equestrian course, cattle laneways and irrigation pipes.

Moreover, these significant improvements enjoy this protection against access rights under mining licences as at the date those rights are exercised, and not the date Notice is served.

Following the decision, Hume Coal has urged the State Government to review legislation around access to land, to ensure progress in the exploration industry is not impeded. Conversely the Landowners welcomed the decision, commenting that the court's finding restores some balance to a system previously weighted in favour of mining companies ².

Footnotes

¹ Jean Kennedy and Philippa McDonald, ' Five Southern Highlands families win appeal against Hume Coal accessing their land', ABC News (online),10 May 2016 .
² Peter Ker, ' Paddocks protected in blow to coal miners', Sydney Morning Herald (online), 10 May 2016 .

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