What does the High Court decision mean for WA mining?

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WA miners have scrambled to secure their leases after a major High Court decision. But what does it all mean?

There’s never a dull moment in the mining industry in Australia. The latest news to shake the sector is that of a stalemate between the West Australian Government and Federal Attorney-General Christian Porter, which has left hundreds of mining leases and billion-dollar projects in legal limbo. It was recently reported in the AFR.

Allow us to break down this situation in a nutshell:

The beginning of WA mining’s troubles

In 2017, the High Court overturned a decision by the WA Supreme Court in a dispute over the mining lease for a property called Minderoo. Two parties — Forrest and Forrest, and Wilson — had claimed the lease and the State’s mining warden had made a determination.

The High Court invalidated the warden’s decision and overturned the Supreme Court’s decision because the applicants had failed to comply with the lodgement requirements for the lease under the State’s Mining Act 1978. The tenement has been granted invalidly, the High Court said, because the mineralisation reports had not been lodged at the same time as the application, but some time later.

The very fact of the challenge departed from the general rule that, once a lease is granted, it can’t be legally challenged. That the challenge was successful has, as the expression goes, opened up a can of worms. It has allowed questions to be asked about the validity of mining leases across the state.

The WA Government has since been scrambling to fix this legal loophole, and this has brought it into conflict with the Federal Attorney-General.

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Current situation for WA miners

Originally, the WA Government said it would amend legislation to validate vulnerable leases.

However, things weren’t as easy as the government had hoped. Based on legal advice that the legislation could “trigger futures provisions under the Native Title Act”, which affords land rights to Australia’s Aboriginal people, WA won’t move ahead with the legislation until the Federal Government makes amendments to the Native Title Act.

The Federal Government, however, is adamant that WA needs to amend its Mining Act before it makes any changes to the Native Title Act. So the WA Government is stuck.

This tug of war between state and federal governments leaves about 25% of mining leases in limbo — with 564 leases issued since 2006 potentially invalid. 

Mining organisations are now finding themselves in a precarious position, with lawyers warning them that they could be exposed to action from other miners, native title claimants and environmental groups as long as uncertainty looms over the leases. In the meantime, a number of these organisations that are potentially invalid are taking precautions and lodging new lease applications inclusive of all required reports and information.

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In the report by the AFR, WA Mines Minister, Bill Johnston, said: “The issue is probably the most significant facing the state’s mining industry with the High Court decision undermining security of tenure.”

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What next in the WA mining lease debacle?

Right now, the Federal Government is working on a “package of broad Native Title reforms” and expects to release a draft bill for public comment this year.

Warren Pearce, Chief Executive of the Association of Mining and Exploration Companies, told the Australian Financial Review: “The WA Government appeared to have a sound plan to deal with lease uncertainty” and he urged Canberra to “show more urgency in dealing with the native title issue”.

As you would expect, uncertainty on the renewal of leases leaves mining organisations feeling exposed.  There are no signs yet that this is having an impact on mining jobs or mining industry recruitment, but if the situation isn’t resolved, mining companies with at-risk leases could well hold up projects until they have certainty.

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