Starr v Chalcophile Resources Pty Ltd
[2016] QLC 20
•15 March 2016
LAND COURT OF QUEENSLAND
CITATION: Starr v Chalcophile Resources Pty Ltd [2016] QLC 20 PARTIES: Geoffrey Dennis Starr
(applicant)v Chalcophile Resources Pty Ltd
(respondent)FILE NO: MRA117-12 DIVISION: General Division PROCEEDING: Hearing of objection to grant of mining lease DELIVERED ON: 15 March 2016 DELIVERED AT: Brisbane HEARD ON: Heard on the papers
Decision reserved on 1 February 2016HEARD AT: Brisbane MEMBER: WA Isdale RECOMMENDATIONS: 1. That the application be granted in whole, but subject to a condition or conditions.
2. That the condition or conditions limit ML 70414 to alluvial gold and silver and that the Minister additionally consider imposing a depth limit.
CATCHWORDS: Mining Lease – gold – silver – recommendation to the Minister
Mineral Resources Act 1989 ss 2, 177, 248, 265, 268, 269
APPEARANCES: None. Hearing conducted by written submissions at the request of the parties SOLICITORS: Not applicable
The application
Mr Geoffrey Dennis Starr applied for Mining Lease (ML) 70414 on 25 August 2009. It is proposed to be over an area of 203.1552 ha and for a period of 10 years. The purpose is said to be for surface mining of gold and silver. The land is used for low intensity grazing and two dams are situated on its mid-southern boundary. The surface area is required for treatment plant, soil heaps, machinery, a small camp and a small dam. The area is south of Clermont and gold was first mined in the area a century ago. It is envisaged that mining would be by a small family concern. The applicant claims experience in both surface and underground gold mining, having operated tenements north of Clermont for about 10 years. He claims to own the necessary equipment and to have a good record of rehabilitation of tenements.
The respondent has objected to the granting of the mining tenement so the matter has been referred to the Court. At the request of the parties, the Court adjourned the hearing of the matter for a lengthy period. The parties were unable to reach agreement so the Court made orders to progress the matter. The parties have provided written submissions and requested the Court to decide the matter on the written material that has been provided. As the Court has advised the parties, this includes the material provided by the mining registrar. That material was available for perusal by the parties if they wished to do so.
The Court’s function
The Chief Executive has referred the matter to the Court in accordance with s 265(4) of the Mineral Resources Act 1989 (the Act) due to the presence of the objection.
Section 268 of the Act provides that:
“(1)On the date fixed for the hearing of the application for the grant of the mining lease and objections thereto, the Land Court shall hear the application and objections thereto and all other matters that pursuant to this part are to be heard, considered or determined by the Land Court in respect of that application at the one hearing of the Land Court.
(2)At a hearing pursuant to subsection (1) the Land Court shall take such evidence, shall hear such persons and inform itself in such manner as it considers appropriate in order to determine the relative merits of the application, objections and other matters and shall not be bound by any rule or practice as to evidence.
(3)The Land Court shall not entertain an objection to an application or any ground thereof or any evidence in relation to any ground if the objection or ground is not contained in an objection that has been duly lodged in respect of the application.
… ”
Section 269 requires the Court to then forward the objections, the evidence and exhibits and the Land Court’s recommendation to the Minister who retains the decision-making power. Section 269 is in the following terms:
“(1) Upon the hearing by the Land Court under this part of all matters in respect of an application for the grant of a mining lease, the Land Court shall forward to the Minister—
(a)any objections lodged in relation thereto; and
(b)the evidence adduced at the hearing; and
(c)any exhibits; and
(d)the Land Court’s recommendation.
(2)For subsection (1)(d), the Land Court’s recommendation must consist of—
(a)a recommendation to the Minister that the application be granted or rejected in whole or in part; and
(b)if the application relates to land that is the surface of a reserve and the owner of the reserve has not consented to the grant of a mining lease over the surface area, the following—
(i)a recommendation to the Minister as to whether the Governor in Council should consent to the grant over the surface area;
(ii)any conditions to which the mining lease should be subject.
(3)A recommendation may include a recommendation that the mining lease be granted subject to such conditions as the Land Court considers appropriate, including a condition that mining shall not be carried on above a specified depth below specified surface area of the land.
(4)The Land Court, when making a recommendation to the Minister that an application for a mining lease be granted in whole or in part, shall take into account and consider whether—
(a)the provisions of this Act have been complied with; and
(b)the area of land applied for is mineralised or the other purposes for which the lease is sought are appropriate; and
(c)if the land applied for is mineralised, there will be an acceptable level of development and utilisation of the mineral resources within the area applied for; and
(d)the land and the surface area of the land in respect of which the mining lease is sought is of an appropriate size and shape in relation to—
(i)the matters mentioned in paragraphs (b) and (c); and
(ii)the type and location of the activities proposed to be carried out under the lease and their likely impact on the surface of the land; and
(e)the term sought is appropriate; and
(f)the applicant has the necessary financial and technical capabilities to carry on mining operations under the proposed mining lease; and
(g)the past performance of the applicant has been satisfactory; and
(h)any disadvantage may result to the rights of—
(i)holders of existing exploration permits or mineral development licences; or
(ii)existing applicants for exploration permits or mineral development licences; and
(i)the operations to be carried on under the authority of the proposed mining lease will conform with sound land use management; and
(j)there will be any adverse environmental impact caused by those operations and, if so, the extent thereof; and
(k)the public right and interest will be prejudiced; and
(l)any good reason has been shown for a refusal to grant the mining lease; and
(m)taking into consideration the current and prospective uses of that land, the proposed mining operation is an appropriate land use.
(5)Where the Land Court recommends to the Minister that an application for the grant of a mining lease be rejected in whole or in part the Land Court shall furnish the Minister with the Land Court’s reasons for that recommendation.
(6)If—
(a)the application is for the grant of a coal mining lease; and
(b)under section 318BA, a preference decision is required; the Land Court can not recommend that the lease not be granted so as to give preference to petroleum development.”
The respondent’s grounds of objection
The respondent holds EPM 17968 in respect of all minerals other than coal and ML 70414 wholly overlaps EPM 17968. The respondent has not consented to the application for ML 70414 and without such consent s 248 of the Act provides, by sub-section 4, that the application cannot be granted. A consent was possible on the basis that the applicant’s rights would be restricted to the surface of the land but the application is not so limited so it is objected to. The consent which the respondent was willing to give is for less than the applicant actually applied for. If the applicant is granted the mining lease it seeks, the respondent would lose its valuable rights under EPM 17968 to explore for minerals and potentially be granted a mining lease. It refers to s 177 of the Act in this regard.
The respondent submits that the proposed mining lease is located in an area mineralised with gold where there is a prospect of discovery of a significant gold deposit. It also submits that ML 70414 includes substantial areas that would not be required for an alluvial operation. It submits that granting ML 70414 would be substantially inconsistent with the objectives of the Act. These are set out in s 2 as follows:
“The principal objectives of this Act are to—
(a)encourage and facilitate prospecting and exploring for and mining of minerals;
(b)enhance knowledge of the mineral resources of the State;
(c)minimise land use conflict with respect to prospecting, exploring and mining;
(d)encourage environmental responsibility in prospecting, exploring and mining;
(e)ensure an appropriate financial return to the State from mining;
(f)provide an administrative framework to expedite and regulate prospecting and exploring for and mining of minerals;
(g)encourage responsible land care management in prospecting, exploring and mining.”
The parties have sought to enable the applicant to mine alluvial gold at the surface without the respondent losing its rights to any hardrock mineralisation below.
The applicant’s submissions
The applicant submitted that the intention is to mine the surface alluvial gold deposits. In the Clermont region this is typically about 96% pure with silver content usually under 3%. Mining operations would be required by the draft Environmental Authority to be conducted so that the area of disturbance did not exceed 0.5 ha at any one time. Open-cut mining activity is contemplated and the limit on the area of disturbance would restrict deep excavation. This is due to the need to batter the slope of an excavation to comply with safety requirements.
The applicant submits that it does not have approval to sink shafts and conduct underground mining. It points to the potential of rental and royalty income to the State and rates payable to the local council.
In reply to the respondent’s reference to s 177 of the Act, the applicant stresses the intention to mine for alluvial gold. The applicant submits that the respondent has now changed its position as the section would apply to any form of mining. This would exclude gold or silver, however mined, from the respondent’s EPM 17968. Section 177 provides as follows:
“Upon the grant of a mining claim, mineral development licence or mining lease consequent upon an application made by the holder of an exploration permit granted in respect of the same area for the same mineral (whether or not at the direction of the Minister) or by an eligible person with the consent of the holder, the area of the exploration permit shall be reduced accordingly and the terms and conditions applying to the exploration permit may be varied as the Minister directs.”
It was submitted on behalf of the respondent that, if the mining lease is granted, the area of the exploration permit is reduced in relation to, in the present case, gold and silver, effectively taking away its rights in respect of those minerals.
The Court does not accept this submission by the respondent as the words of s 177 direct its operation to cases where the application is made by the holder of the exploration permit. In the present case, that would be the respondent, which is not what has occurred in this case.
The respondent’s reply
The respondent refers to its letter dated 16 February 2012 and e-mailed to the applicant that day. It was in the following form:
“16 February 2012
Mr Geoffrey Starr
Registrar
Clermont Qld 4721Dear Geoffrey
RE: MINING LEASE APPLICATION 70414
I have tried ringing you on your mobile number, (redacted by the Court for privacy reasons), this afternoon to discuss and explain the necessary course of action taken by our subsidiary company, Chalcophile Resources Pty Ltd, in formally objecting to your mining lease application 70414. Documentation was lodged with the Mining Registrar on 15 February 2012 and express mailed to your postal address at Clermont the same day.
We have no problem with you proposing to conduct alluvial mining operations, but are concerned with our ‘giving away’ the hard rock potential in the lease area under application. You will see by the wording on page 3 of our objection that we seek to negotiate a resolution with you as part of the mining lease grant process.
In the near two and a half year period since you pegged the lease, the Company has identified the local and highly significant ‘Palm Trees Gold (hard rock) Prospect’ which encompasses historic workings running into the Copperfield mine area to the west. Some of these historic workings exist within your MLA. We understand that the alluvials you seek to mine have shed from local hard rock targets, ones which we wish to progress through an orderly exploration process. Accordingly, it is in the best interests of both parties to meet to talk through the issues at hand. A good time for us would be in early April when we recommence field activities based out of Clermont.
Please contact us at your earliest convenience.
regards
David Hall
Executive Director – Operations
Diatreme Resources Limited”It was submitted that the respondent’s consent to the grant of ML 70414 was restricted to rights to mine surface alluvial gold and silver. The respondent repeats its reliance on s 177 of the Act and disagrees with the applicant’s submissions concerning limits to depth of mining implied by the conditions of the draft Environmental Authority. These, it submits, only relate to areas within 1 km of an endangered regional ecosystem so only apply to approximately one-third of ML 70414. The conditions would not in any case impose a depth restriction on the applicant’s rights if ML 70414 was granted.
Consideration of the matters set out in s 269(4) of the Act
Whether―
(a) the provisions of this Act have been complied with.
The material provided by the Chief Executive and by the applicant and respondent do not indicate that there has been any non-compliance so, on the material provided, the answer to this question is “Yes”.
(b) the area of land applied for is mineralised or the other purposes for which the lease is sought are appropriate.
There is no dispute that the area is mineralised. The respondent submitted that the area currently sought includes substantial areas that would not be required for an alluvial operation. As the material provided does not specify such areas in a way in which they could be described with co-ordinates and excluded, there is no opportunity for the Court to suggest such a course. This shortcoming in the material which has been provided could, it appears, be overcome by a condition in which mining is limited to alluvial gold and silver. The answer is “Yes”.
(c) if the land applied for is mineralised, there will be an acceptable level of development and utilisation of the mineral resources within the area applied for.
The applicant’s claimed mining experience has not been challenged. He claims over 16 years experience in mining surface alluvial gold deposits and describes in his material the method of stripping layers to expose the gold-bearing wash. This appears to be an acceptable level of development and utilisation of these mineral resources. The answer is “Yes”.
(d) the land and the surface area of the land in respect of which the mining lease is sought is of an appropriate size and shape in relation to –
(i)the matters mentioned in paragraphs (b) and (c);
and
(ii)the type and location of the activities proposed to be carried out under the lease and their likely impact on the surface of the land.
The land has an area of 203.1552 ha and is, very roughly, rectangular. It is an appropriate size and shape in relation to the matters mentioned in paragraphs (b) and (c). It is an appropriate size and shape in relation to the type and location of the activities proposed to be carried out under the lease and their likely impact on the surface of the land. The material indicates that it is proposed to use alluvial open cut mining with an excavator and front-end loader. A mobile air-operated processing plant is expected to be used so that there will be no need to use trucks to transport material. Dry processing is expected to be used primarily, although small wet plant may be used subject to weather conditions. Disturbance will be minimised by the mining method which makes the use of trucks to transport material unnecessary. The answer is “Yes”.
(e) the term sought is appropriate.
The 10 year term sought is appropriate in view of the area and the operations contemplated. The answer is “Yes”.
(f) the applicant has the necessary financial and technical capabilities to carry on mining operations under the proposed mining lease.
The applicant claims, in the application for ML 70414, to own and have operated gold mining tenements north of Clermont for approximately 10 years. This includes surface and underground alluvial gold mining and processing, using wet and dry processing plants. He claims to own the equipment necessary to conduct his mining activities. This has not been contradicted. The answer is “Yes”.
(g) the past performance of the applicant has been satisfactory.
The applicant claims experience in operating earthmoving machinery and to have a good record for completing rehabilitation on mining leases, including his own. This was not challenged. The answer is “Yes”.
(h) any disadvantage may result to the rights of –
(i)holders of existing exploration permits or mineral developments licences, or
(ii)existing applicants for exploration permits or mineral development licences.
There would be a disadvantage to the respondent. As has been discussed, it does not have a problem with the applicant conducting alluvial mining operations, and its rights in relation to potential hard rock mineralisation could be preserved by a clear and specific condition limiting the applicant to mining for alluvial gold and silver. A specific depth limit could also be imposed. There is no material before the Court to suggest what such a depth limit, if considered desirable, should be. The answer is “Yes”, a disadvantage would result to the rights of the respondent, but a condition or conditions could be imposed so as to limit that disadvantage to what it has indicated it is prepared to consent to.
(i) the operations to be carried on under the authority of the proposed mining lease will conform with sound land use management.
The presence of an environmental authority for the proposed operation and compliance with its terms would indicate that the operations will conform with sound land-use management. The answer is “Yes”.
(j) there will be any adverse environmental impact caused by those operations and, if so, the extent thereof.
The excavation and processing would be expected to cause adverse environmental impact, such as that caused by dust and possibly erosion and run-off. The extent of these would normally be controlled by the existence of the environmental authority. The answer is “Yes”.
(k) the public right and interest will be prejudiced.
There is not, on the material provided, any interference with public roads or infrastructure. The answer is “No”.
(l) any good reason has been shown for a refusal to grant the mining lease.
In view of the limited consent from the respondent and the possibility of conditions to limit the terms of ML 70414 strictly to alluvial gold and silver, the answer is “No”.
(m) taking into consideration the current and prospective uses of that land, the proposed mining operation is an appropriate land use.
The current land use is described as low intensity grazing. On the material, that use, and mining, are the prospective uses of the land. Taking this into account, the proposed mining operation is an appropriate land use. The answer is “Yes”.
Conditions to which the mining lease should be subject
The Land Court recommends that ML 70414 should be subject to a condition that it is limited to alluvial gold and silver and that the Minister additionally consider imposing a depth limit. No evidence was provided to the Court in regard to any specific depth limit so the Court is unable to recommend a suitable form of words for such a condition. The Minister will have the benefit of expert advice from the relevant department in this regard.
Recommendations
1. That the application be granted in whole, but subject to a condition or conditions.
2. That the condition or conditions limit ML 70414 to alluvial gold and silver and that the Minister additionally consider imposing a depth limit.
WA ISDALE
MEMBER OF THE LAND COURT
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