Establishing worth of waivers

The state government review of the Mining Act 1971 has the potential to have significant impacts on the agricultural sector.

In light of the review under way, a recent decision of the Environment, Resources and Development Court has come at an opportune time. 

In Marmota Energy Ltd versus NG&JK Harrop & Clinpara, the court considered an application by Marmota for a wiaver of the benefit of an exemption pursuant to section 9AA of the Mining Act 1971. The waiver was sought so Marmota could undertake exploration works on the subject land.

Marmota proposed constructing a number of pits and about 80 drill holes with a diameter of between 95 millimetres and 150mm and a depth of between 65 metres and 100m, with the work undertaken across two months.

The landowners opposed the application for a waiver. 

Pursuant to section 9 of the act, land used as a yard, garden, cultivated field, plantation orchard or vineyard is 'exempt land'.

This means the land cannot have prospecting, exploring or mining occur upon it, unless the exemption is waived by the landowner.

If the landowner does not agree to a waiver, the mining operator can apply to the ERD Court for an order waiving the benefit of the exemption.

To obtain the order, the mining operator must show that any adverse effects of the operations can be appropriately addressed by imposing conditions on the mining operator.

The landowners raised a number of issues, including disruption to farming practices, fire risks, ground compaction, weed infestation and remediation of holes and pits.

While the court found the concerns were serious and well founded, the judge said these concerns could be adequately addressed by conditions and therefore made orders waiving the benefit of the exemption.

Of particular interest was the compensation paid in respect of the waiver. There is no guidance in the act as to how compensation should be calculated. This was not a matter on which the court heard evidence.

The court largely adopted the position put forward by the mining operator and awarded some compensation, including payments of between $25 and $200 for the holes, depending on the type of hole, as well as $200 a pit and a single payment of $2000 to each landowner at the conclusion of the waiver. 

The court decision did not set out in any detail how the compensation payments were calculated. That is a matter still to be determined.

Hopefully the state government review might look at this issue in more detail and specify some criteria for how compensation is to be calculated.

This article was originally published in The Stock Journal on 9 March 2017

Practice Area: Environment, Mining & Resources , Farm Law

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