The Mining Act - Access & Compensation Agreements

Agreements between private landowners and mining companies for access and compensation for mineral exploration or mining are known as “Mining Access and Compensation Agreements” (MACA).  A MACA will deal with not only the amount of compensation payable to the landowner for disturbance, but will also place obligations on the mining company not to unduly interfere with farming operations including (for example) to leave gates as found, to notify the landowner before any mining activities take place on the land, to not bring dogs onto the land, and to maintain any tracks on the land in good condition. 

Clelands Lawyers has negotiated a number of MACA's between landowners and mining companies including for the Prominent Hill Mine operated by OzMinerals in the far north of South Australia and the Central Eyre Iron Project on Eyre Peninsula.  If you have any queries in relation to the proposed railway corridor on Eyre Peninsula contact us. This is a very specialised area of law and we are fortunate enough to have significant experience with it.  

In South Australia most minerals are owned by the Crown.  Under the Mining Act, the Crown (namely the State of South Australia) licences mining companies to mine and extract those minerals in return for the payment of royalties to the State.  However, in many cases these minerals are located beneath the surface of privately owned land. 

The Mining Act puts in place a procedure for mining companies to follow in order to be able to lawfully access privately owned land for mineral exploration and mining purposes.  The State has an incentive for mining operations to take place, as when minerals are extracted, significant royalties are paid to the State by the mining company in question.  However, a landowner is not entitled to any royalty payments for minerals extracted from beneath their land, so they will have little incentive to allow a mining company onto their land to carry out exploration or mining activities due to the significant disturbance this will cause to their farming operations. 

The Mining Act contains the method by which these competing interests are resolved. 

Under the Mining Act, a mining company can access privately owned land for mineral exploration and mining purposes if either sufficient compensation is paid to the landowner, and the consent of the landowner is given, or a Court order to that effect is made.  As a condition of access, the Mining Act requires a mining company to pay compensation to a landowner for any disturbance caused to their land as a result of mineral exploration or mining. 

Section 61 of the Mining Act titled “Compensation” includes the following:

“The owner of any land upon which mining operations are carried out in pursuance of this Act shall be entitled to receive compensation for any economic loss, hardship and inconvenience suffered by him in the consequence of mining operations.” 

The general description of the compensation payable means that very specific types of loss and disturbance can be compensated. For example, compensation can range from payment for each exploration hole drilled, to compensation for the loss of the net profit for an entire paddock if the mining activities prevent the paddock from being used.

“Exempt” land

The provisions of the Mining Act allowing a mining company to conduct mining operations on privately owned land do not apply if the land is “exempt” land.  If land is “exempt” under the Mining Act, then the provisions of the Mining Act do not apply, meaning that a landowner has the right to refuse entry to the mining operator even if sufficient compensation for disturbance is offered. 

“Exempt” land includes:-

  • A cultivated field
  • An orchard or vineyard
  • Land within 400 metres of a residence
  • Land within 150m of a dam or shed

There are two ways that “exempt” land status can be lifted:

  • With the agreement of the landowner; or
  • By order of a Court. 
Landowner’s right to require their land be purchased

In July 2011 the Mining Act was substantially amended.  One of the amendments was the inclusion of Section 62A “Right to require acquisition of land”. 

Section 62A is designed to cover the situation where compensation is not sufficient to fully compensate the landowner for the disturbance and loss of profit caused by the mining operations.  Essentially, Section 62A provides that if the level of disturbance caused by the activities of a mining operator are so significant as to” “substantially impair the owners use and enjoyment of the land", the landowner can apply to the Court for an order requiring the mining company to purchase their land. 

If the Court does make an order requiring the mining company to purchase the relevant land, the landowner is entitled to compensation equivalent to the market value of the land, and also “a further amount the Court considers just by way of compensation for disturbance”. 

The use of the phrase “a further amount the Court considers just by way of compensation for disturbance” arguably introduces the law concerning acquisition on “just terms” under the Australian Constitution.  If this is found to be the case, the compensation payable to an affected landowner under Section 62A could be significant. 

Our team will be pleased to assist you, contact Tom Walker

23 August 2016