//Exploration Regulations
Exploration Regulations2018-08-14T03:27:26+00:00

EXPLORATION REGULATIONS

The ownership of minerals in Queensland largely vests in the State.  The Queensland Government Department of Natural Resources and Mines (DNRM) is responsible for regulating exploration for minerals and energy resources.

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KEY ACTS

The Mineral Resources Act 1989 (Qld) (MR Act) establishes and regulates the process of obtaining exploration permits in relation to coal and other minerals.  Similarly, exploration for onshore petroleum and gas is regulated by the Petroleum and Gas (Production and Safety) Act 2004 (Qld) (P&G Act).

Provisions which are common to all types of resources, and provisions relating to the overlap of resource activities, are set out in the Mineral and Energy Resources (Common Provisions) Act 2014 (Qld) (MERCP Act).

TENURE SNAPSHOT

Queensland is recognised as being highly prospective for coal, minerals (such as gold, zinc and copper) and petroleum (in both liquid and gaseous form).  Rights to explore for and to produce coal, minerals and petroleum are held under various forms of tenure.  Key tenures and a snapshot of the rights afforded under them are set out below.

TENURE TYPESNAPSHOT OF ENTITLEMENTFURTHER INFORMATION FROM QUEENSLAND GOVERNMENT
Prospecting permit ‘PP’
• Granted over either specific land parcels or a mining district, excluding areas covered by other mining tenure
• Access is subject to obtaining the landowner’s permission
• Carry out survey and pegging for a mining claim or mining lease, prospecting and hand mining.
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Exploration permit (Minerals specified on the permit)
‘EPC’ for coal
‘EPM’ for other minerals
• Granted over large ‘sub-blocks’, which are rectangles Qld is divided into for administrative purposes
• Access subject to land access requirements
• Carry out exploration (drilling, seismic, etc.)
• Priority above all others to apply for MDL or ML.
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Mineral development licence ‘MDL’
• Granted over specified metes and bounds
• Access subject to land access requirements
• Carry out exploration activities authorised under an EPC or EPM
• If specified, carry out bulk sampling activities
• Compelled to carry out work specified by the Minister in the MDL grant.
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Mining lease ‘ML’
• Granted over specified metes and bounds
• Exclusive access to surface area (subject to compensation agreement with landowner)
• Production activities
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TENURE TYPESNAPSHOT OF ENTITLEMENTSFURTHER INFORMATION FROM QUEENSLAND GOVERNMENT
Authority to prospect ‘ATP’
• Granted over large ‘sub-blocks’, which are rectangles Qld is divided into for administrative purposes
• Access subject to land access requirements
• Carry out exploration (drilling, seismic, etc.)
• Production testing
• Plugging and abandoning wells.
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Potential commercial area declaration ‘PCA’• Enables an area within the ATP to be retained for up to an additional 15 years – avoiding the ordinary relinquishment requirements
• Granted subject to demonstrating that the area contains a commercially viable resource and compliance with the ATP.
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Pipeline licence ‘PPL’• Authorises construction and operation of a pipeline on designated 'pipeline land'
• Pipeline land requires either an easement, the landowner’s consent or otherwise ministerial consent
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Petroleum Facility Licence ‘PFL’• Authorises construction and operation of processing, refining, storage or transport facilities on 'petroleum facility land'
• Petroleum facility land requires either an easement, the landowner’s consent or otherwise ministerial consent .
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Petroleum lease ‘PL’
• Granted over specified area – usually described by providing an electronic Shapefile with the application
• Subject to compensation agreement with landowner
• Production activities.
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Petroleum Survey Licence ‘PSL’ and Data Acquisition Authority ‘DAA’• PSL authorises survey of land to determine suitability for either a PPL or PFL, and to survey the pipeline route
• DAA authorises limited geophysical survey activities outside the area of, but immediately adjacent to, an ATP or PL.
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MINERAL AND COAL EXPLORATION AUTHORITIES

ENTITLEMENTS UNDER AN EPM OR EPC

Exploration permits are granted for a maximum five year term and allow the holder to enter land within the permit area to undertake exploration activities, provided land access requirements are met.

Mining is not authorised.

Land access requirements dealing with the interaction between landholders and explorers are discussed in greater detail below.

Exploration permits may be renewed by application.

Exploration permit holders are entitled at the exclusion of all others to seek an ML within the area of the permit.

OBTAINING AN EPC

Application for an EPC occurs exclusively through a competitive tender process initiated by the Minister for Mines.

To initiate a call for tenders, the Minister publishes a gazette notice inviting applications.  The call will provide details of the proposed area for the permit, along with any conditions of the proposed permit.

OBTAINING AN EPM

An application for an EPM can be made either in response to a call for tenders, or by a general application.  The application must specify the minerals sought.

ENTITLEMENTS UNDER AN MDL

An application for an MDL can only be made within the area of an EPC or EPM to evaluate the economic development of an ore body.  Evaluation activities include mining feasibility, metallurgical test work and engineering studies.  The application must be for the same minerals sought in the EPM or EPC.

PERMIT AREA

For the purpose of exploration, land in Queensland is divided into blocks and sub-blocks determined by identified longitudinal and latitudinal boundaries.  Exploration permits can only be granted over sub-blocks, with all sub-blocks requiring at least one common side with another sub-block.

An exploration permit for coal may not exceed 300 sub-blocks.

An exploration permit for minerals other than coal may not exceed 100 sub-blocks.

RELINQUISHMENT

It is a condition of all exploration permits that a portion of the permit area is relinquished.  The relinquishment schedule for each exploration permit outlines when the period reduction in the permit area is due to occur. The area of an EPC or an EPM must be reduced by:

(a)          40% of the original area by the end of the first three years after the permit is granted (i.e. end of first work period); and

(b)          a further 50% of the remaining area at the end of five years (i.e. end of second work period).

There are additional reporting requirements at each relinquishment, including an obligation to provide a summary of the activities carried out, including maps, and a digital copy of all geochemical and geophysical surveying data.  Further details on the relinquishment requirements, including the reporting requirement are provided in the DNRM Relinquishment Guide.

MINIMUM EXPENDITURE AND OTHER CONDITIONS

Exploration permits carry a condition that the holder must carry out the program of works and studies for the purpose that exploration permit was granted.  The Minister may also include as a condition of grant that the holder comply with minimum work commitments and expenditure requirements during the term.  Other conditions include specific annual reporting requirements which are used to determine that minimum expenditure and the program of works conditions are complied with, and the payment of an annual rent.

An exploration permit holder must also report the discovery of any minerals to DNRM within 14 days of the discovery.  This is imposed where the mineral appears to be of commercial value in ‘payable quantities’.

MDLs

MDLs entitle the holder to carry out the same exploration activities that were authorised under the exploration permit from which the MDL was sought.

MDLs also entitle the holder, at the exclusion of all others, to seek an ML within the MDL area.

The Minister may require more detailed exploration efforts under an MDL.  This also authorises the holder to undertake activities that are required to carry out those activities.  For example, the Minister may require:

(a)          geological, geophysical and geochemical programs and other works as are reasonably necessary to evaluate the potential for development of any mineral occurrence of possible economic potential occurring in or on the area of the mineral development licence;

(b)          mining feasibility studies;

(c)           metallurgical testing;

(d)          environmental studies;

(e)          marketing studies;

(f)           engineering and design studies; and

(g)          such other activities as the Minister considers appropriate.

In some cases, additional activities, such as bulk sampling, are required in order to comply with the MDL requirements, and as a result those activities are authorised under the MDL.

PETROLEUM AND GAS EXPLORATION AUTHORITIES

OVERVIEW

In Queensland, exploration for petroleum, oil, coal seam gas and natural gas is authorised by an ATP.  An ATP is granted for a maximum period of twelve years and allows its holder to explore and test areas for petroleum as well as evaluate the feasibility of petroleum production in a particular area.  Subject to its conditions being complied with, an ATP can be renewed.

OBTAINING AN ATP

ATPs are applied for through a competitive tender process.  Unlike coal, a process also exists under the P&G Act for the Minister to call for a tender for production tenure (a petroleum lease (PL)) – effectively skipping the exploration stage.  The call for tender is initiated via publishing a gazette notice inviting applications.  The call will provide the eligible parties with the proposed area for the permit, along with any details or conditions of the proposed permit.  The decision to grant the ATP to a particular party is made based on criteria such as the applicant’s financial and technical resources, the proposed work program and predicted expenditure.

PERMIT AREA

ATPs can only be granted over sub-blocks, with all sub-blocks requiring at least one common side with another sub-block.

An ATP must not exceed 100 sub-blocks.

TRANSITIONING TO PRODUCTION

An ATP holder can apply directly for a petroleum lease, or for a part of the ATP to be declared as a potential commercial area (PCA).   The PCA is a way of retaining an area of the ATP beyond its term to provide extra time to commercialise the resource.  The maximum term for an ATP is 12 years, while the declaration for the PCA can be for up to 15 years.

MINIMUM EXPENDITURE AND OTHER CONDITIONS

ATPs carry a condition that the holder must carry out the program of works and studies for the purposes that the ATP was granted.  The Minister may include as a condition of grant that the holder comply with minimum work commitments and expenditure requirements during the term.  Other conditions include specific annual reporting requirements which are used to determine that minimum expenditure and the program of works conditions are complied with, and the payment of an annual rent.

RELINQUISHMENT

It is a condition of ATPs that a portion of the permit area is relinquished either during the permit term or before renewal.  The relinquishment schedule for an ATP requires the holder to relinquish at least 8.33% of the original permit area annually, or 33% every 4 years.

There are additional reporting requirements at each relinquishment, including an obligation to provide a relinquishment report.  Further details on the relinquishment requirements, including the reporting requirements are provided in the DNRM Relinquishment Guide.

FURTHER CONSIDERATIONS

OVERLAPPING TENURE

There is inevitably an overlap between areas of prospective coal and coal seam gas.  The MERCP Act commenced in 2016 and seeks to manage this overlap by establishing an overlapping tenure regime. This regime has the potential to significantly impact the area available for exploration under an ATP or EPC.  Generally, in an area of exploration tenure overlap (for example where an ATP and EPC overlap), the parties can continue their activities to the extent that it does not adversely impact the activities of another permit holder.  If conflict arises, priority is given to the party whose activities are already under way.

At the production stage, competing rights to develop the land for petroleum, gas or coal resources are dealt with either through a joint development plan or a right of way for coal.

The overlapping tenure requirements, including safety and health, are set out in the:

(a)          MERCP Act;

(b)          Mineral and Energy Resources (Common Provisions) Regulation 2016 (Qld);

(c)           P&G Act;

(d)          Coal Mining Safety and Health Act 1999 (Qld); and

(e)          Coal Mining Safety and Health Regulation 2001 (Qld).

DNRM has also published this guideline: Overlapping tenures – coal and coal seam gas.

OTHER REQUIREMENTS

To obtain an exploration authority (whether for coal, minerals or petroleum), applicants will be required to consider native title and cultural heritage, and obtain an environmental authority where the activity is not a small-scale mining activity.

AUTHORISED ACTIVITIES AND LAND ACCESS

The holder of an exploration authority is entitled to enter land to carry out preliminary activities for the purposes of their tenement once an entry notice has been given to the owner and occupier of the land.  Preliminary activities are activities which will have no, or only a minor impact on the activities carried out by the owner and occupier of the land such as:

  • walking the permit area;
  • driving an existing road or track in the permit area;
  • extracting soil and water samples; and
  • conducting environmental surveys.

The holder may not enter private land to carry out advanced activities unless each owner and occupier of the land:

  • is a party to a conduct and compensation agreement (CCA) about the advanced activity and its effects;
  • is a party to a deferral agreement;
  • has elected to opt out from entering into a CCA or deferral agreement; or
  • is party to Land Court proceeding commenced pursuant to section 96 of MERCP.

Advanced activities are authorised activities other than a preliminary activity, such as:

  • seismic survey activities;
  • drilling, levelling of drilling pads and digging sumps;
  • open trenching;
  • vegetation clearing;
  • constructing an exploration camp, track or access road; and
  • bulk sampling.

The MERCP Act sets out a process for negotiating CCAs and provides for a mechanism for referral to the Land Court where the terms of the CCA cannot be agreed between the owner or occupier of the land and the tenement holder.

The party affected by the advanced activities is entitled to compensation for any compensatable effect the person suffers as a result of those activities.  Compensatable effects include, among other things deprivation of possession of the surface of the land, diminution of value of the land and of the use made or that may be made of the land or any improvement on it.

Importantly, under the MERCP Act, the Land Court provides a mechanism which allows the activities to be carried out, even where the parties cannot agree to the terms of a CCA.

The Land Access Code and Framework also applies to access to private land for exploration in Queensland.