As a general rule, acquisitions of interests in mining or production tenements by foreign persons require FIRB approval regardless of value, except for in certain circumstances acquisitions by foreign persons from the United States, New Zealand and Chile, for which the monetary threshold is $1,154 million.
Acquisitions of interests in the land underlying mining, production or exploration tenements may need approval depending on the nature of that underlying land.
Importantly, acquisitions of interests by foreign persons (except foreign government investors) in an exploration tenement may not need FIRB approval under the regime. However, each tenement will confer different rights and obligations and should be closely examined if the acquiring entity is a foreign person under the FIRB legislation. Foreign persons who are foreign government investors need to notify FIRB and seek approval for the acquisition of any interest in a prospecting, exploration, mining or production tenement (including where that tenement is being obtained on initial grant).
The Treasurer, through FIRB, is generally required to make a decision on an application within 30 days of receipt of the application and fee, and respond to the application within a further 10 days. The time frame does not begin until the correct application fee has been paid in full. However, if FIRB needs additional time to consider an application, they can seek the applicant’s consent to an extension of time.
If the extension is not agreed to, FIRB has the power to prevent the investment for a period of up to 90 days while it further considers the application. Interim orders to this effect are made public and are generally to be avoided wherever possible.
FIRB is a complicated area, and investors should remember to get FIRB advice early in a proposed acquisition, because it may impact the structure of an acquisition. Investors should also remember that just because a company is Australian, or even listed on the ASX, it may still be a foreign person for FIRB purposes, and need approval.