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Rock Solid Holdings Qld Pty Ltd v Faint[2019] QLC 50

Rock Solid Holdings Qld Pty Ltd v Faint[2019] QLC 50

LAND COURT OF QUEENSLAND

CITATION:

Rock Solid Holdings Qld Pty Ltd v Faint [2019] QLC 50

PARTIES:

Rock Solid Holdings QLD Pty Ltd

(applicant)

v

Ross William Faint & William Edward Faint

(non-active objectors)

FILE NO:

MRA382-19 (MLA100158, MLA100159, MLA100160, MLA100161)

DIVISION:

General Division

PROCEEDING:

Hearing of application for mining lease and objection

DELIVERED ON:

20 December 2019

DELIVERED AT:

On the papers

HEARD ON:

Submissions due 2 December 2019

HEARD AT:

Heard on the papers

PRESDIENT:

FY Kingham

ORDER:

I recommend to the Minister for Natural Resources, Mines and Energy, as the Minister responsible for the Mineral Resources Act 1989, thatMLs 100158, 100159, 100160, and 100161 be granted.

CATCHWORDS:

ENERGY AND RESOURCES – MINERALS – COURTS OR TRIBUNALS EXERCISING JURISDICTION IN MINING MATTERS – QUEENSLAND – where the applicant applied for four mining leases to mine gold – where the objectors to the mining lease did not elect to be active parties in the hearing – where the landholders do not consent to the grant of mining leases over the surface of land that is restricted land – whether the area is mineralised – where the Court recommended the leases should be granted

Mineral and Energy Resources (Common Provisions) Act 2014 s 68

Mineral Resources Act 1989 s 238, s 245, s 252, s 268(3), s 269(4), s 279, s 283B

Bat Advocacy NSW Inc v Minister for Environment Protection, Heritage and the Arts & Anor (2011) 180 LGERA 99; [2011] FCAFC 59, cited.

Sinclair v Mining Warden at Maryborough & Anor (1975) 132 CLR 473; [1975] HCA 17, cited.

Tickner v Chapman (1995) 57 FCR 451; [1995] FCAFC 1726, cited.

APPEARANCES:

Not applicable

  1. [1]
    Rock Solid Holdings QLD Pty Ltd has applied for four mining leases (MLAs 100158 – 100161) to mine gold in an area 18 to 21 km north/north-west of Clermont, in the Mining District of Emerald. The four leases, respectively known as “Nuggets Galore,” “Old Yellow,” “Springs,” and “Springs East,” collectively comprise the “Blackridge Conglomerate Gold Project Clermont.”
  1. [2]
    Ross William Faint and William Edward Faint are the freehold owners of Lot 21 on SP263857 and are the registered lessees of Lot 23 on CLM340. The MLAs affect the land held by the Faints under both tenures: the freehold, by Nuggets Galore and Springs East; and the leasehold, by all applications except Springs East.
  1. [3]
    The landowners lodged an objection to the grant of the mining leases,[1] but did not elect to be active parties in the hearing. That means they played no active part in the Court process.[2] Nevertheless, I must consider their objection when deciding what recommendation to make on Rock Solid’s applications.[3] Also, I must consider the statutory criteria specified in the Mineral Resources Act 1989.[4]

Has Rock Solid complied with the provisions of the MRA?[5]

  1. [4]
    Rock Solid lodged the four applications on 21 October 2017. A delegate of the chief executive of DNRME issued the mining lease notice for each lease on 11 July 2019.[6] The chief executive cannot issue that notice unless satisfied the applicant is an eligible person and has complied with the requirements for the application.[7]
  1. [5]
    The landowners objected that Rock Solid did not comply with the requirements of the MRA, for two reasons.
  1. [6]
    First, the landowners say Rock Solid did not define the boundaries of all restricted land within the lease areas, as required.[8] Restricted land includes land within 50 m laterally of an artesian well, bore, dam or water storage facility.[9] In its applications, Rock Solid acknowledged a number of restricted areas. The landowners say Rock Solid did not recognise all the restricted areas. That is because there is a dispute about the status of two former mining excavations that have filled with water: one on each of Old Yellow and Springs East. Rock Solid says they do not meet the definition of “water storage facility.”[10] It has drawn a distinction between a water body constructed to supply water to earlier mining operations, which it accepts as restricted land, and former excavations that have filled with water, which it does not accept as restricted land.[11] The landowners do not agree with that distinction. At least in respect of ML 100159, they say they use the disputed water body for their livestock.[12]
  1. [7]
    The second reason the landowners say Rock Solid has not complied with the MRA requirements for the application is that it does not have the landholders’ consent to the grant of mining leases over the surface of land that is restricted land.[13]
  1. [8]
    When Rock Solid lodged its applications, s 238 of the MRA provided that a mining lease could not be granted over restricted land unless, before the last objection day, the applicant lodged the owner’s consent to the restricted land being included in the surface area of the lease.[14]
  1. [9]
    On 25 October 2018, amendments to s 238 commenced. As amended, s 238 still prevents the Minister from granting a mining lease over the surface area of restricted land, unless the owner consents to it being included. However, amended s 238 allows the applicant to lodge the owner’s consent any time before the grant of the lease.[15]
  1. [10]
    In any case, the absence of the owner’s consent affects the scope of the grant of the lease, not the validity of the application. The lease will exclude the surface area of restricted land if the applicant has not lodged the owner’s consent, as required. It has a consequence for the grant, but not the validity of the application. It is not evidence that Rock Solid has failed to comply with the requirements of the MRA in relation to the application.

Is the land mineralised or are the other purposes applied for appropriate?[16] 

  1. [11]
    The landowners say Rock Solid has not proven the lease areas are mineralised. They rely on the statement in the application for Nuggets Galore that “there are no JORC-compliant resources on MLA10058.”[17]
  1. [12]
    JORC is the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.[18] It establishes standards for public reporting of mineral resources and ore reserves. The JORC Code provides:

A Mineral Resource is a concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade (or quality), and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade (or quality), continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.”[19]

  1. [13]
    The sub-division with the lowest level of confidence, an Inferred Mineral Resource, nevertheless requires sufficient supporting information “to enable the reader to evaluate the risk associated with the reported Mineral Resource.”[20]
  1. [14]
    The failure to demonstrate a JORC-compliant resource does not mean the lease areas are not mineralised. Although there is no definition of “mineralised” in the MRA, “mineralisation” is defined in the Macquarie Dictionary 3rd ed to mean:

mineralisationnoun the presence of ore minerals in an area.”

  1. [15]
    The areas applied for cover two historic gold mining camps: Blackridge and Springs. There was mining in these areas during an early gold rush in the Clermont area that started in the late 1800s.[21] Blackridge produced gold between 1879 and 1901 and Springs from the 1920s.[22] The publicly available information about the area, as recorded on GeoResGlobe confirms history workings for gold in the lease areas.[23]
  1. [16]
    In its applications, Rock Solid provides information about the geology of the lease areas and the extent to which it has been able to define the resource. It referred to exploration work undertaken by Denison Resources Limited in the late 1980s. There is evidence of the presence of coarse gold in the lease areas. This is difficult to sample as the “nugget effect” with coarse gold, that is, the clustering of metals in a deposit, can result in an over or under-estimation of the resource. Only large samples, or small-scale trial mining, will establish the grade with sufficient confidence to be JORC-compliant.
  1. [17]
    The JORC Code, even at the lowest level of confidence, requires reasonable prospects of eventual economic extraction.[24] Whether the land is mineralised is a different consideration, not dependent on establishing an economically viable resource. There is evidence before the Court of large tonnages of mineralised rock.

Will there be an acceptable level of development and utilisation of the mineral resources?[25]

  1. [18]
    Rock Solid proposes to undertake an extensive drilling program, bulk sampling and trial mining in the first two years. Although some of those activities may be authorised under a mineral development licence, only a mining lease can authorise mining.
  1. [19]
    Rock Solid has entered into an option agreement with Impact Minerals Limited, an exploration company listed on the ASX since November 2006, to purchase a 95% interest in these MLAs. The Managing Director of Impact, Dr Mike Jones, has both academic expertise and on the ground experience in mineral exploration and mining. The company has a successful history of delineating gold resources and it manages extensive tenement holdings. Impact prepared the application material, and will be the project operator. There is nothing in the material to suggest that there will not be an acceptable level of development and utilisation of the resource on these MLAs.

Is the area an appropriate size and shape?[26]

  1. [20]
    Rock Solid identified the MLA areas based on past exploration and research. They include areas suitable for the processing plant and associated infrastructure, and a small camp.[27]
  1. [21]
    The landowners observed that the total surface area applied for across the MLAs is 232.61 ha, but the environmental authority limits disturbance to 10 ha, leaving 222 ha unused.[28]
  1. [22]
    This misconstrues the purpose and effect of the relevant approvals. An ML grants an exclusive right to mine the area included in the grant, for the term of the ML. The EA conditions the way in which the mining activity can be undertaken. Under the EA issued for these MLAs, Rock Solid will be limited to disturbing no more than 10 ha at any one time. That fits with the proposed staged mining, using a mobile air processing plant with a small footprint, and progressive rehabilitation immediately after mining.
  1. [23]
    Rock Solid will not mine the entire surface area of the MLAs. The grant will exclude some areas that are restricted land. Rock Solid will use other areas for associated infrastructure. At the end of stage one, Rock Solid may well apply to amend the EA to allow greater disturbance under site-specific conditions.

Is the term appropriate?[29]

  1. [24]
    Rock Solid has applied for a term of 15 years. It estimates the combined leases contain approximately 700,000m3 of material suitable for mining. It expects to process approximately 60,000m3 per season. At that rate, at least 12 seasons would be required to complete the operation. Time to undertake initial exploration and final rehabilitation accounts for the other three years.[30]
  1. [25]
    The landowners argue the term could be shorter if there was more intense mining. However, the mining is necessarily seasonal, as the operation requires access to sufficient water. The landowners have an understandable and justified concern about the impact of the mining on their cattle grazing operation. However, the staged mining proposed by Rock Solid will minimize actual disturbance and it is open to the miner and the landowners to agree on both the conditions and the amount of compensation for the disturbance.

Does Rock Solid have the necessary financial and technical capabilities?[31]

  1. [26]
    One of the Directors of Rock Solid has 30 years’ experience in prospecting, exploring, and mining and holds relevant machinery tickets.[32] Although it is not the applicant, Impact holds an option to purchase 95% of the MLAs and to operate the mine. I have already adverted to the relevant experience of Impact’s Managing Director. Further information about the experience of the Directors and Chairman of Impact are contained in Rock Solid’s statutory declaration.[33]
  1. [27]
    Rock Solid estimates the costs of bringing the operation into production and cash-flow positive status is between $30,000 and $40,000. Both Directors of Rock Solid have confirmed the company has sufficient funds in place to meet 100% of the financial requirements of the MLAs.[34]
  1. [28]
    The landowners have not called into question the financial or technical capability of the applicant.

Has Rock Solid’s past performance been satisfactory?[35]

  1. [29]
    Rock Solid has declared it has no relevant history of non-compliance.[36] The officer who referred the application to the Court advised that she was not aware of any action taken under the MRA against the company or any of its directors.[37]

Is there any disadvantage to other miners?[38]

  1. [30]
    Although the landowners say the MLAs will disadvantage other exploration or mining companies, the only affected tenure holders are wholly owned subsidiaries of Impact, which has an option to purchase 95% of the MLAs.[39]

Will the operations conform to sound land use management?[40]

  1. [31]
    The landowners argue that, as mining will only occur a few months per year, the areas will be left and could oxidise in the balance of the year. This misapprehends the mining program or progressive rehabilitation as mining progresses. Mined areas will be backfilled and re-seeded as mining moves on to the next area. During trial mining, the rotary air concentrator distributes waste material as it extracts the ore, eliminating extensive mullock heaps. A bulldozer will follow the concentrator and flatten the waste. New topsoil will be added where appropriate, as the areas to be mined are heavily disturbed with low productivity. Bulk sampling areas will be progressively filled and rehabilitated.[41]

Will the operations cause any adverse environmental impact and, if so, to what extent?[42]

  1. [32]
    Under its EA[43], Rock Solid must comply with the standard conditions contained in two regulatory documents:
  1. (a)
    Code of environmental compliance for exploration and mineral development projects – Version 1.1; and
  1. (b)
    Eligibility criteria and standard conditions for mining lease activities – Version 2 (ESR/2016/2241).
  1. [33]
    The landowners are concerned about the potential impacts of a larger open pit operation. That is not what is currently proposed, or authorized under the EA. If Rock Solid wants to undertake an operation of that nature, it would have to apply for site- specific conditions.
  1. [34]
    There is a Category B Environmentally Sensitive Area in the southernmost area of MLA100161. Specific conditions apply to that area. Rock Solid cannot carry out activities within one kilometre of that area, and must not cause any impact, directly or indirectly on that area.[44]
  1. [35]
    There is nothing to indicate the current EA conditions are inadequate to minimize any adverse environmental impacts of the mining as currently proposed. Should Rock Solid wish to undertake a larger scale operation, it will have to apply to amend its EA and provide more detailed information and environmental assessments, so site-specific conditions may be formulated.

Will the public right and interest be prejudiced?[45]

  1. [36]
    There is no public infrastructure on the lease area.
  1. [37]
    The landowners argue the public interest is damaged in two ways. First, because it will have an extremely large impact on their agriculture operations, one of the state’s five economic pillars. Second, because the large area under the MLAs does not promote active mining and does not meet the objectives of the MRA.
  1. [38]
    The landowners have led no evidence about their agricultural operation. I am not in a position to assess the nature and scale of the potential impact of mining on that operation. However, as currently proposed, the staged mining program will limit actual disturbance, including areas under rehabilitation, to 10 ha at any one time. The restricted area provisions also provide some protection in relation to access to water for stock purposes. If the landowners do not consent to a restricted area being included in the surface area for an ML, it must be excluded from the grant.
  1. [39]
    Further, the landowners’ concern about the impact on their operation does not sit comfortably with their second argument, that the MLAs do not promote active mining.

Has any good reason been shown for refusing the application?[46]

  1. [40]
    The objection does not raise any other reason for refusing the lease, nor does any of the other material before the Court.

Taking into consideration the current and prospective uses of the land, is the proposed mining operation an appropriate land use?[47]

  1. [41]
    I have already referred to the limited area that can be disturbed at any one time and the difficulty in assessing the nature and scale of the impact of that operation, without evidence about the landowners’ agricultural enterprise.
  1. [42]
    Rock Solid says 50% or more of the MLAs is already disturbed by previous mining and is of limited utility for grazing. The topsoil is poor. Significant parts of MLA100158 are open to the main road and do not run cattle.
  1. [43]
    Rock Solid proposes to rehabilitate all mined ground. It will limit its water storage facilities to existing dams, where possible. If new dams are required, it will compensate the landowners.[48]
  1. [44]
    Given the prior disturbance of the land, the staged nature of the mining activities, and the requirements for progressive rehabilitation, I am satisfied mining is an appropriate land use taking into account current and prospective uses of the land.

Conclusion and recommendation

  1. [45]
    In deciding what recommendation to make, I must weigh the various factors that I must take into account, by bringing my mind to bear[49] upon the salient facts that give shape and substance to the matter[50] and considering how all the relevant factors weigh in the balance.[51]
  1. [46]
    Rock Solid has complied with the requirements of the MRA for the application. That is so whether or not it has the landowners’ consent to including restricted areas in the surface area of the lease. If necessary, the current dispute about what areas are restricted land will have to be resolved before grant, to ensure any restricted areas for which there is no consent are excluded from the grant.
  1. [47]
    I am satisfied the areas of the MLAs are mineralised. Rock Solid proposes a staged mining plan to undertake bulk sampling and trial mining. As currently proposed, no more than 10ha will be disturbed at any one time. Rehabilitation will immediately follow from mining.
  1. [48]
    Rock Solid has the financial and technical capability to undertake the proposed mine and has no history of non-compliance in 30 years of mining. It has entered into an option agreement with Impact, a successful exploration and mining company, which will operate the mine. The only affected holders or applicants for tenures under the MRA are associated with Rock Solid or Impact.
  1. [49]
    The EA proposes appropriate conditions for the staged mining now proposed, including special conditions to protect an environmentally sensitive area on Springs East. If the sampling and mining program provides a basis for doing so, Rock Solid may undertake a large-scale open pit mine, but must first apply for amendments to the EA.
  1. [50]
    As currently proposed, the impact on the landowners’ operation will be minimised. It is not possible to assess the nature and scale of the impact without evidence about that. In any case, the landowners are entitled to compensation for the impact of mining.[52] If there is a material change in circumstances for the mining lease (such as a different mining method that changes the impact of the mine) the Court can review the original compensation agreement or determination.[53]
  1. [51]
    The public interest is not prejudiced by the MLAs and, in the context of past disturbance and the rehabilitation requirements, mining is an appropriate use of the land.
  1. [52]
    Weighing matters I must consider in the balance, they favour the grant of the MLAs.

Order:

I recommend to the Minister for Natural Resources, Mines and Energy, as the Minister responsible for the Mineral Resources Act 1989, thatMLs 100158, 100159, 100160, and 100161 be granted.

FY KINGHAM

PRESIDENT OF THE LAND COURT

Footnotes

[1]Ex 10, Objection form for a mining lease application.

[2]Land Court Practice Direction 4 of 2018.

[3]Mineral Resources Act 1989 s 268(3).

[4]Ibid s 269(4).

[5]Ibid s 269(4)(a).

[6]Ex 15, pages 1-4.

[7]MRA s 252(1).

[8]MRA s 245(1)(h)(ii).

[9]Mineral and Energy Resources (Common Provisions) Act 2014 s 68(b)(i)(A).

[10]Ibid s 68(4). 

[11]Ex 4, Old Yellow Restricted Land Details.

[12]Ex 10, Annexure A.

[13]MRA s 238(1). 

[14]MRA current as at 31 August 2017 s 238(1).

[15]MRA s 238(1).

[16]MRA s 269(4)(b).

[17]Ex 3, page 9.

[18]Australasian Joint Ore Reserves Committee (JORC), Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, 2012 Edition.

[19]Ibid [20].

[20]Ibid [21].

[21]Ex 5, page 6.

[22]Ibid.

[23]Queensland Government, GeoResGlobe (2019) .

[24]JORC, above n 18, [20].

[25]MRA s 269(4)(c).

[26]MRA s 269(4)(d).

[27]Ex 3, Justification of Application Area and Shape.

[28]Ex 10, Annexure A.

[29]MRA s 269(4)(e).

[30]Ex 3, Justification of 15 Year Term.

[31]MRA s 269(4)(f).

[32]Ex 16.

[33]Ex 17, pages 5-6.

[34]Ex 16.

[35]MRA s 269(4)(g).

[36]Ex 17, page 6.

[37]Ex 1.

[38]MRA s 269(4)(h).

[39]Applicant’s submissions, filed on 28 November 2019.

[40]MRA s 269(4)(i).

[41]Ex 17, page 3.

[42]MRA s 269(4)(j).

[43]Ex 2.

[44]Ex 2.

[45]MRA s 269(4)(k).

[46]MRA s 269(4)(l).

[47]MRA s 269(4)(m).

[48]Ex 17, page 4.

[49]Tickner v Chapman (1995) 57 FCR 451, 495. 

[50]Bat Advocacy NSW Inc v Minister for Environment Protection, Heritage and the Arts & Anor (2011) 180 LGERA 99, [44]–[45]. 

[51]Sinclair v Mining Warden at Maryborough & Anor (1975) 132 CLR 473. 

[52]MRA s 279(1).

[53]MRA s 283B(1)(b).

Close

Editorial Notes

  • Published Case Name:

    Rock Solid Holdings Qld Pty Ltd v Faint

  • Shortened Case Name:

    Rock Solid Holdings Qld Pty Ltd v Faint

  • MNC:

    [2019] QLC 50

  • Court:

    QLC

  • Judge(s):

    Kingham P

  • Date:

    20 Dec 2019

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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