Exemptions for tenement minimum expenditure conditions
In any period of heightened uncertainty in the mining industry, Western Australia’s unique “jealous neighbour” tenement minimum expenditure conditions become increasingly relevant.
To date, the Department of Mines, Industry Regulation and Safety (DMIRS) is holding the line that expenditure conditions are required to be met in order to ensure tenements in Western Australia (WA) are maintained in good order.
This is equally important for tenement holders to guarantee their security of tenure as well as being particularly relevant for holders who may have contractual obligations under a royalty, joint venture, sale and purchase agreement or other contractual arrangements to maintain tenements in good standing.
Thankfully, there is a process under the Mining Act 1978 (WA) for the grant a ‘certificate of exemption’, which, as the name suggests, totally or partially exempts a tenement from its expenditure conditions.
There are various grounds set out in section 102(2) of the Mining Act which could be available for explorers or producers facing difficulties in meeting their tenement minimum expenditure conditions, including:
or the general Ministerial discretion whereby:
In novel situations with no established precedent for an application for exemption, tenement holders may be dealing not only with DMIRS but also with challenges and plaints from third parties.
Care should be taken when compiling your application for exemption to meet the strict timing and form requirements and to provide sufficient supporting materials to give yourself the highest possible chance of being successful.
We remain hopeful that government will take a pragmatic and supportive approach towards the industry.
If you have any questions on your particular scenario or would like to speak to one of our experts in WA mining law, please contact our WA Resources and Energy team.