The mining lease is the workhorse tenement of the Mining Act 1992. Most producing mines in Papua New Guinea that are not on a special mining lease are on one.
Section 38(1) — who may apply
(a) the holder of an exploration licence, in respect of the land subject to that licence;
(b) the exploration licence holder together with a person to whom he applies to transfer his interest in the application under section 118; or
(c) any person, in respect of land that is not the subject of an exploration licence, special mining lease, mining lease or alluvial mining lease.
Paragraph (c) is important: a mining lease may be applied for over unencumbered land by anyone. It is not necessary to have explored first. Paragraph (b) allows the transfer to a developer to be dealt with as part of the same application.
Section 38(2) — the citizen requirement for alluvial-only leases
A mining lease which is for the sole purpose of mining alluvial minerals may be held only by:
(a) a citizen; or
(b) a company of which at least 51% of the issued ordinary shares are beneficially owned by citizens; or
(c) an unincorporated joint venture at least 51% of the interest in which is beneficially owned by citizens.
The word beneficially is doing the work. Nominee shareholdings and trust arrangements that leave real ownership offshore do not satisfy the section. This sits alongside the alluvial mining lease, which may be held only by a citizen or a land group over land they own, and the section 9(2) right to non-mechanised alluvial mining on your own land.
Sections 39 and 40 — term and area
| Limit | |
|---|---|
| Term (s 39) | Not exceeding 20 years, extendable under section 46 |
| Area (s 40(a)) | Not more than 60 km² |
| Shape (s 40(b)) | Rectangular or polygonal |
Section 41 — the rights conferred
(a) enter and occupy the land to mine the minerals on it, and carry on such operations and works as are necessary or expedient;
(b) construct a treatment plant on that land and treat any mineral derived from mining operations, whether on that land or elsewhere, and construct other treatment facilities including waste dumps and tailings dams;
(c) take and remove rock, earth, soil and minerals from the land, with or without treatment;
(d) take and divert water on or flowing through the land for mining or treatment; and
(e) do all other things necessary or expedient for mining or treatment operations on that land.
Subject to this Act, the holder of a mining lease:
(a) is entitled to the exclusive occupancy for mining and mining purposes of the land; and
(b) owns all minerals lawfully mined from that land.
Section 5 vests all minerals in the State. Section 41(2)(b) transfers ownership to the holder only of minerals lawfully mined. Mining outside the lease boundary, outside the approved proposals, or in breach of a condition is not lawful mining — and property in what is won does not pass.
Note too that paragraph (b) of section 41(1) allows treatment on the lease of minerals derived from mining operations elsewhere. A central mill can process ore from several sources; the tailings and waste dumps that come with it are expressly authorised.
Water rights under paragraph (d) must now be read with Part VII of the Environment Act 2000, which replaced the Water Resources Act referred to in section 41(1)(d) and vests the right to the use, flow and control of water in the State.
Sections 42 to 45 — application, proposals and refusal
be on the prescribed form, with attached either a schedule describing the corners of the boundary in latitude and longitude and a sketch map, or a survey under section 97; be accompanied by the applicant’s proposals and a statutory declaration that the area has been marked out under section 96; be lodged in triplicate with the prescribed fee; and be lodged in accordance with Division VI.1.
- Section 43 — the approved proposals, compliance with which is a mandatory condition of the lease under section 38(3)(b).
- Section 44 — refusal to grant.
- Section 45 — variation of the approved proposals.
- Section 46 — extension of term.
- Section 47 — reporting requirements.
Under section 38(4), the Minister shall not grant a mining lease in relation to a Mining Project unless he has first given written notice to the Company — the State participation machinery in Part IIIA.
Section 3(3) — provincial consultation
Before the grant of any mining lease the Minister shall consult with the provincial government, if any, in whose province the lease will be located.
A mining lease does not attract a development forum — that is reserved for special mining leases. Provincial consultation, the objection process and the Warden’s hearing are the avenues for those affected.
What it means for landowners
- Watch for marking out — section 96 requires the ground to be marked before a lease application, and the applicant swears a statutory declaration that it was done.
- Lodge an objection under section 107 within the time allowed after notice of the application under section 106.
- Attend the Warden’s hearing, which reports to the Council under section 109.
- Nothing may begin until compensation is settled — section 155.
- Build the compensation claim from section 154, including social disruption and land in the vicinity.
- Ask about the environment permit and the impact assessment; they are separate approvals.
- Ask about closure — the section 150 security, rehabilitation, and what happens to plant and buildings under section 152.
Sources
- Mining Act 1992 — ss 3, 5, 9, 29, 38–47, 96, 97, 106–110, 118, 150, 152, 154, 155
- Mining (Safety) Act (Chapter 195A)
- Environment Act 2000 — Part VII
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.