Submission - Draft Mineral Titles Regulations
The proposed changes incorporate a reduction in the maximum area size of exploration licence applications from 500 blocks to 250 blocks. The impacts will be a reduction on the foothold on land by explorers and an increase the fees and charges.
In general terms the Northern Territory is a broad under-explored region and exploration in the “higher-risk” greenfields areas should be encouraged. When confronted by this issue in other jurisdictions which as Western Australia, companies simply take out twice as many exploration licences and wear the added administration costs, in effect doubling fees, administration time and increasing red tape. This may actively discourage the record levels of exploration seen in the recent past in the Northern Territory.
It may be more efficient if companies could exercise their own discretion in the size of area they apply for, as they inevitably pay the rent. In any case, the general availability of land will determine the size of the licence areas. Government should not take the position that this change will increase ground turnover, because the provisions of relinquishment in the Act apply the same to a single large tenement as they do to a large amalgamation of small tenements.
Another potential issue in relation to dropping the maximum size of tenements is that all exploration deeds/agreements with land councils have annual compensation pegged to the number of tenements covered by the deed, not the area. If the average tenement size effectively halves then the average compensation will double - subtle but significant, based on $5,000 or $10,000 per tenement, escalating annually. The result is likely to be that bigger tenements equal less compensation.
If Government is to truly encourage greenfields explorers, it could be made more financially appealing by possibly:
- Having zone arrangements in the NT, based on the degree of previous and current interest, where slightly different provisions and fees apply. For example, areas in the southeast of the NT and the region west of Dunmarra where there has been little exploration and where there is currently significant vacant land could have reduced fees and more liberal relinquishment provisions. This would encourage grassroots explorers to focus on these areas. Conversely, areas where ground position is tight, turnover is poor and exploration is mature, should have more stringent rules and proportional rents.
- Reductions in greenfields zones should be much more relaxed, like 25% after 3 years, then 25% after 5 years.
- Rents shouldn’t escalate until the 4th year.
- Expenditure commitment per block should be less than brownfields zones and liberally applied.
The Northern Territory should also note the Minerals Council of Australia’s Exploration Policy submission to the Australian Government’s Policy Transition Group in November 2010 (copy attached) which outlined that exploration is critical to the growth, vitality and diversity of the Australian minerals industry. Both regional communities highly dependent on the industry and the wider Australian economy stand to benefit from increased exploration activity.