Key takeaways
Securing a mining tenement in Australia is a multi-step process that involves identifying prospective ground, applying for an exploration tenement and complying with legislative requirements.
Once a commercially viable mineral resource is discovered, exploration tenement holders may apply for a mining lease to move to the development and operational phases.
Engaging with stakeholders, including pastoralists, Indigenous groups and other land users, is key to ensuring that exploration and mining activities are conducted responsibly and sustainably.
Mining tenements are the foundation of any mining or exploration project in Australia. Depending on the type of tenure, mining tenements permit the holder to explore, develop, and extract minerals from a specified piece of land. Certain tenure also permits the construction of infrastructure for the purposes of exploration or mining projects. The process of securing a mining tenement, from initial discovery through to mineral production can be a complex journey as it requires compliance with various legislative enactments and regulations, and there are a number of steps before a miner, explorer or prospector can access the ground and carry out activities.
In Part 1 of HopgoodGanim’s Mining Project Lifecycle Series, we outline the general progression of mining tenements from initial discovery to production, and navigating land access, native title, environmental approvals and more. More detail on these specific issues will be provided later in the series.
The initial discovery phase and exploration
Identifying prospective ground
The first step in any mining or exploration project is to identify prospective ground. This involves analysing geological data to determine areas that are geologically prospective for mineralisation. Such data may already exist, from geological data acquired from publicly available mineral exploration reports submitted to the relevant government department, or other sources. Increasingly, explorers are using machine learning and AI to assist with this analysis. However, ultimately it involves some form of geological “theory” to support the area identified for initial exploration.
Making an application for an exploration tenement
Once prospective ground has been identified, an explorer can obtain a mining tenement to conduct exploration activities to explore for minerals by making an application. This tenement is commonly called an exploration licence or exploration permit.
Exploration tenements can be granted over land that is ‘open for mining’. This includes vacant Crown land, pastoral land and private land, and excludes areas exempt from mining and where the relevant land is subject to a current mining or exploration tenement.
Once an application is made, there may be a process by which third parties can object to an application. The objection may be based on rights as a landholder, native title holder or a competing tenure holder. Objections will need to be addressed before a tenement is granted.
This may involve an agreement with the landholder or native title holder or a determination by a court, tribunal or the relevant minister for a competing tenure holder.
Exploration tenements
Exploration tenements authorise the holder to enter land and undertake operations and work necessary, including digging pits, trenches and holes and sinking bores and tunnelling, with such vehicles, machinery and equipment as necessary or expedient to carry on such operations. Exploration tenements also permit the removal of mineral bearing substances (provided the removal of materials do not exceed the prescribed amounts depending on the jurisdiction).
Once an area is identified as prospective, explorers may carry out exploration activities in stages to gather sufficient data to determine whether a particular area warrants further investigation or development. Each stage of exploration is dependent on the results of the previous stage.
An exploration program may start with low impact activities before progressing to more intensive impact activities.
These activities may include:
Geological mapping to observe the location, types and characteristic of rocks or exposed sediments on the surface of land.
Geochemical surveys to obtain rock chip or soil / sediment samples for lab analysis to assess the presence and concentration of minerals and target areas to be explored further for mineralisation.
Geophysical surveys to understand the underground geological (such as airborne geophysical surveys, seismic, electromagnetic or gravity surveys).
Costean or trench sampling to take subsurface samples.
Drilling to take rock chips (air or auger drilling), or deeper drilling (e.g., rotary air blast (RAB) or reverse circulating drilling (RC drilling), diamond drilling etc.).
Bulk sampling to analyse material to be mined for further testing and to refine proposed mining and mineral processing procedures. Further planning and development or environmental approvals (or an application for a mining lease) may be required depending on specific activities, e.g., whether ore is proposed to be extracted and tested off-site and if the extracted material from the licence area exceeds prescribed limits.
Drilling is a critical phase in the development of an exploration project, and is used to identify and then define the size, depth, and quality of the deposit.
After the drilling phase, a pre-feasibility study may be performed to provide an initial analysis on the technical, economic, social and environmental feasibility. Thereafter a definitive feasibility study may be commissioned which evaluates a mining project's technical, economic, and operational viability which can then inform a decision to mine. An outline of the approvals pathway in relation to applying for a mining lease is outlined further below.
Expenditure and reporting requirements
Generally, the holder of an exploration tenement will be obliged as a condition of the tenement, to expend a certain amount on explorations each year or to comply with a prescribed work program. The holder of an exploration tenement is also required to record and report to the relevant state government department on the expenditure incurred on a tenement (e.g., expenditure associated with exploration, heritage surveys, rent and rates, administration / overheads, land access and native title costs).
Other approvals
Undertaking exploration activities may also require the use of water, which is generally subject to obtaining water licences, for example to permit the extraction of groundwater, or to construct a bore for that purpose.
Tenement conditions imposed on an exploration tenement may also require further approvals or reports to be submitted before the holder may conduct exploration activities.
Applying for a mining lease (or a retention licence)
When the exploration phase has matured to a stage where a commercially viable resource has been discovered, exploration tenement holders may apply for a mining tenement.
In some cases, when an area is identified as having significant mineral resources but the timing for development is uncertain, the holder of the tenement may for economic or other reasons, apply for a retention tenement. A retention tenement permits the holder to secure its rights to the ground and delay development until the market or other conditions are more favourable, at which time the holder may convert the retention tenement to a mining tenement.
A mining lease is typically sought over a smaller area than the original exploration tenement. An application for a mining tenement needs to comply with the requirements of the relevant legislation and regulations. Once granted, the holder of a mining tenement can proceed to the development and operation phases of a project, and will be permitted to carry out productive mining operations.
The holder of a mining tenement will be required to comply with ongoing rehabilitation and environmental obligations, as well as obligations relating to mine closure.
In the mining phase, the holders of a mining tenement must also comply with a range of State and Federal legislation relating to environmental protection. Referrals of significant proposals to the relevant government agencies responsible for the protection of the environment are assessed in respect of the project’s environmental impact, and as to whether the project may proceed at all, or if the proposal may proceed subject to compliance with conditions.
When applying for a mining or retention tenement which overlaps native title land, the right to negotiate process under the Native Title Act 1993 (Cth) may need to be complied with in order for the grant of a tenement to be valid. This involves an agreement making process between the applicant for the tenement and the native title party.
There are also additional project approvals that may be required depending on the requirements of the project, this may include:
- additional ancillary or infrastructure tenure to support the infrastructure required for the project, (e.g., power generation facilities, transmission lines, pipelines, roads, processing facilities); and
- environmental and/or any relevant planning and development approvals.
Implications
Navigating the mining tenure system in Australia is a multi-stage process that begins with identifying prospective ground and securing an exploration tenure to access land and conduct exploration activities. Obtaining an exploration tenure also involves negotiating land access agreements with competing land users, the requirement to address native title compliance, and managing Aboriginal cultural heritage before exploration activities can be conducted. Once a mineral resource has been identified that warrants development, a mining lease may be obtained together with other project approvals required for the development and operation of the project.
The Australian mining sector is highly regulated, and compliance with mining and environmental legislation and regulations, and engaging with stakeholders, including Indigenous groups, is key to ensuring that exploration and mining activities are conducted responsibly and sustainably. While each jurisdiction has specific legislation and regulations, the general process is similar across the country.
