An exploration licence is granted so that the ground is explored, not so that it is held. Sections 25 to 27 of the Mining Act 1992 make that concrete.
Section 25(1) — the minimum annual expenditure
The minimum expenditure required to be spent annually in connection with an approved programme shall be as prescribed.
The figure is set by regulation rather than by the Act. What the Act fixes is what counts.
Section 25(2) and (3) — acceptable expenditure
Acceptable expenditures are those directly connected with the acquisition and interpretation of exploration data from the area of the exploration licence, including related laboratory and feasibility work.
Expenditure on (a) the purchase of a tenement, or (b) the purchase of land or buildings, is not acceptable expenditure.
Section 25(3)(a) and section 31 work together. Section 31 prevents a person whose only interest is in an exploration licence in its first two-year term from creating, transferring or disposing of that interest — subject to exceptions including a holder that is a corporation listed on a public stock exchange. Section 25(3)(a) then ensures that buying a tenement cannot be counted as exploring it.
Together they are the Act’s answer to speculation: money must go into the ground, not into the licence.
The words “from the area of the exploration licence” also matter. Expenditure must relate to that licence area. Regional work, corporate overhead and unrelated studies are outside the definition.
Sections 20, 24 and 26 — the approved programme
Section 24(b)(i) — an application for the grant or extension must be accompanied by a programme on the prescribed form, together with a statement of the technical and financial resources available to the applicant.
Section 110(3)(a) — the Council shall consider that programme in making its recommendation, and may under section 110(4)(c) defer and require it to be revised.
Section 26 — the approved programme.
Section 20(2)(b) — the licence shall require as a condition that the holder complies with the approved programme.
Section 27 — variation of the approved programme.
Because compliance with the approved programme is a mandatory condition, a departure from it is a breach of a condition — and under section 142(1)(b) the Managing Director may require the holder to show cause why the tenement should not be cancelled.
It also limits what may lawfully be taken from the ground. Under section 23(1)(b), the right to extract, remove and dispose of rock, earth, soil or minerals extends only to such quantity as the approved programme permits, and is subject to section 162 on the preservation of cores.
Where circumstances change, the answer is a variation under section 27, not a departure. Note that section 29(1) refers to conditions of an approved programme having been varied under section 27 where an application for a lease is pending.
Section 32 — proving the expenditure
In respect of every period of six months calculated from the date of grant — and on expiry, cancellation and on applying to surrender — the holder shall lodge a report on the prescribed form summarising all acceptable expenditure incurred under section 25(2) since the last report.
It must be lodged within 30 days of the end of the reporting period (s 32(2)(a)).
That report is confidential under section 32(3) — not to be made available outside the Authority, except so far as necessary to publish statistical information or to advise the National Executive Council. See reporting requirements.
Section 28 — where it bites
(a) complied with the conditions of the licence during the previous term — which includes compliance with the approved programme and the expenditure requirement;
(b) paid compensation as required by this Act; and
(c) submitted a programme for the extended term which the Council recommends for approval.
Where the Council cannot give that advice, the Minister may still extend on the Council’s recommendation, and may impose further conditions (s 28(3)). And where he considers it in the best interests of the State, he may refuse to extend (s 28(2)).
Under section 22(2), at each application for extension the holder must relinquish not less than half the area held at the start of that term — down to floors of 30 sub-blocks, or 75 where the Managing Director waives or varies the requirement on the Council’s advice for special circumstances.
So the system pushes in one direction: spend the money, report it, hand back what you are not working.
What this means for landowners
- Extensions are not automatic. They depend on compliance, on expenditure, and on compensation having been paid.
- Object to an extension under section 107 if compensation is outstanding or the holder has not done what it said it would.
- Tell the Chief Warden if you have not been paid — under section 28(4) the Council relies on his advice on that question.
- Ask what the approved programme says about work on your land, and hold the holder to it.
- Watch the relinquishments. Half the ground goes back at each extension, and relinquished land may then be reserved or applied for by others — subject to the 30-day bar in section 30.
Sources
- Mining Act 1992 — ss 20, 22–32, 107, 110, 142, 162
- Mineral Resources Authority (Amendment) Act 2018
Before relying on anything here, read the current text of the Mining Act 1992 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.