Section 150 of the Mining Act 1992 is the provision that stands between a landholder and an operator who walks away.
Section 150(1) and (2) — the obligation, and the sanction
A person to whom a tenement has been granted shall, within 30 days of being notified of the grant by the Registrar, lodge with the Registrar a security for compliance with his obligations under this Act.
Failure to lodge a security constitutes a breach of a provision of this Act for the purpose, inter alia, of section 142(1)(a) — the ground on which the Managing Director may require the holder to show cause why the tenement should not be cancelled.
Separately, under section 111(2), where the applicant fails to lodge the security (or pay the rent) within 30 days, the Minister may cancel the grant — and under section 111(3) the Registrar issues the title document only on compliance.
Note the breadth of what the security secures: compliance with his obligations under this Act — not merely rent, and not merely rehabilitation. That includes the approved programme or proposals, reporting, and compensation.
Section 150(3) — the amount and the form
(a) be the prescribed sum; and
(b) may, subject to the approval of the Managing Director, be:
(i) by bank guarantee; or (ii) by insurance company bond; or (iii) by cash deposit; or (iv) partly by cash deposit and partly by such other method as the Managing Director allows; or (v) by such other method as the Managing Director allows.
Every option in paragraph (b) is subject to the approval of the Managing Director. A parent company guarantee, a letter of comfort or a self-insurance arrangement is not automatically acceptable; the forms the section names first are a bank guarantee and an insurance company bond.
For landholders, the question worth asking is not only whether a security has been lodged but in what form. A bank guarantee from a licensed bank is worth a great deal more than an undertaking from a company that may not exist at closure.
Section 150(4) — discharge
The Managing Director may, on the expiry, surrender or cancellation of a tenement and on written application by the former holder accompanied by evidence satisfactory to the Managing Director showing cause why the security should be discharged, discharge it wholly or in part.
The burden is on the former holder, and it is a burden of evidence: he must show why the security should be released. Nothing is returned automatically.
What comes out of the security first
The Registrar shall, after deducting from the security:
(a) any fee, rent, royalty, compensation, penalty or other money or any other account payable on or before that date; and
(b) any costs incurred by the Authority in ensuring that any other liabilities are met,
remit the balance, if any, to the former holder.
Unpaid compensation comes out of the security before anything is returned. But it can only be deducted if it is established.
That means getting the amount fixed: a compensation agreement registered under section 156, or a Warden’s determination under section 157. Under section 159 either becomes a condition of the tenement and is binding as a contract.
Then tell the Registrar, in writing, before the tenement is surrendered or expires.
Paragraph (b) is wider than it first appears: the Authority may deduct the costs it incurs in ensuring that any other liabilities are met — which reaches beyond debts to work that has to be done.
The restoration check on surrender
The Registrar shall, before registering a surrender, satisfy himself that the holder has complied with any conditions of the tenement which relate to the cessation of exploration and mining operations, restoration of the land and surrender.
So a holder cannot surrender its way out of rehabilitation. And under section 140, surrender does not affect the holder’s liability to pay money, perform obligations, or for any act done or default made on or before the surrender date.
The separate environmental bond
The section 150 security secures obligations under the Mining Act. Separately, under section 99 of the Environment Act 2000, the Director of Environment may require an environmental bond — supported by a bank guarantee, insurance policy or other approved security — whose discharge is conditional on there being no contraventions of a specified kind, or on specified action being taken to achieve compliance.
An environmental bond may also be imposed as a permit condition under section 66(1)(j), alongside conditions requiring monitoring, an environmental management programme, audits and rehabilitation of the affected area.
Ask about both. They cover different obligations and are released by different officials.
Checklist
| For the holder | For landholders |
|---|---|
| Diary the 30 days from notification of grant | Ask whether a security has been lodged, and in what form |
| Obtain the Managing Director’s approval of the form | Ask about the separate environmental bond |
| Pay the rent within the same 30 days | Get compensation agreed and registered, or determined |
| Keep compliance current — programme, proposals, reporting, compensation | Notify the Registrar in writing of unpaid compensation |
| On ending, meet the cessation and restoration conditions before applying to surrender | Ask the Registrar to confirm the section 139(1) check before a surrender is registered |
| Apply in writing for discharge, with evidence | Record the condition of the land as the operation closes |
Get advice early — the Public Solicitor, or a firm from the law firms directory.
Sources
- Mining Act 1992 — ss 111, 139–145, 150, 152, 154–159
- Environment Act 2000 — ss 66, 99
- Mining (Safety) Act (Chapter 195A)
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.