Are you aware of the legislative changes around renewal of Exploration Licences (EL) that took place in the mining laws in South Australia this year?
The South Australian Government made some significant changes to the Mining Act 1971 (SA) (Mining Act) and Mining Regulations 2020 (SA) (Mining Regulations) which came into force from 1 January 2021. The team at Hetherington have outlined some of the key changes to the renewal framework for Exploration Licences in South Australia, which have arisen from the amendments to the Mining Act and introduction of the Mining Regulations.
References to the Amended Mining Act refer to provisions of the Mining Act 1971 (SA) in force after 1 January 2021. References to the Old Mining Act refer to provision of the Mining Act 1971 (SA) in force prior to 1 January 2021.
We have prepared some examples below to help illustrate the above changes. Please note that all companies and Exploration Licence references used in the examples are fictitious and provided for demonstration purposes only.
EL 2021 was granted to Digdeep Co. on the 22 November 2017 for a term of 2 years. It was then renewed in 2019 for a further term of 3 years. In 2021, the licence would have reached a term of 5 years. This means upon renewal of the Exploration Licence, it will be taken to have reached a 6 year term and be brought under the Amended Mining Act. It can be renewed for a further maximum term of 6 years.
EL 2022 was granted to Digdeep Co. on 22 November 2019, for a term of 2 years. In 2021, the licence term has only reached 2 years, hence can be renewed for a further 3 years under the Old Mining Act, until it reaches its 5-year term. Therefore, on renewal in 2021, the Exploration Licence will be renewed under the Old Mining Act for a maximum term of 3 years. At the end of the 3-year renewal term (and 5-year total term) in 2024, the licence would be taken to have reached the end of its initial 6-year term under the Amended Mining Act and can be renewed for a further maximum term of 6 years under the Amended Mining Act.
EL 2023 has been granted as a subsequent Exploration Licence on 22 November 2016 to Digdeep Co. for a term of 5 years. Prior to the subsequent Exploration Licence being granted, it was in existence for a 5 year term as EL 2013. At 2021, upon renewal, this means EL 2023 has reached an aggregate term of 10 years. As EL 2023 has reached its 5 year term, it will be renewed under the Amended Mining. Under the Amended Mining Act, the EL will be taken to have reached an aggregate term of 12 years and a mandatory 50% reduction in area of the EL will be required. The mandatory 50% area reduction is able to include any area reductions that have already taken place over the first twelve (12) years of the Licence.
As can be seen in the above examples, renewal of existing Exploration Licences under the new framework can be complicated and may be limited depending on the age of the particular licence. It is important that all holders become familiar with the new legislative framework and plan renewal applications ahead to ensure maximum security of tenure in relation to key assets.
For more information on how Hetherington can assist in renewal of Exploration Licences, take a look at our Services, or all the experienced team at Hetherington to chat about how we can assist with the management of your tenement portfolio.
|Nethmi Amarasekera||Ben Muscat|