Mining Leases for infrastructure get a judicial workout

What you need to know

• Harvey v Minister for Primary Industry and Resources [2022] FCAFC 794 is the first thorough consideration of the "infrastructure mining lease" provisions of the Native Title Act (section 24MD(6B)).
• The Full Court said that for that provision to apply, a grant must be both the creation of a right to mine and be for the sole purpose of the construction of an infrastructure facility associated with mining.  It also adopted a narrow interpretation of "infrastructure facility".
• In most cases, here the mining infrastructure process does not apply, the future act will either need to be validated by the right to negotiate process where it is the creation of a right to mine or by the simple freehold test process if it is not (as was the outcome in this case).
• The Full Federal Court's decision narrows the scope of section 24MD(6B), at the same time the new eight month consultation period is added to the section 24MD(6B) process in the Native Title Legislation Amendment Act 2021 (Cth).

What you need to do

• Proponents should carefully consider the tenure options for infrastructure associated with mining facilities and ensure that the relevant Department correctly categorises the application under the Native Title Act 1993 (Cth).  
• If section 24MD(6B) does apply, proponents will need to ensure that project timeframes adequately provide for the extended time period.  

Dispute about which Native Title Act process applies to the grant of an ancillary mineral lease for the McArthur River Mine

Harvey v Minister for Primary Industry and Resources [2022] FCAFC 66 involved a dispute about which process in the Native Title Act 1993 (Cth) applied to an application for an ancillary mineral lease for the McArthur River Project in the Northern Territory.

The activities proposed by the ancillary mineral lease involved enlarging the existing dredge spoil deposition area for the McArthur River Mine. The spoils resulted from dredging the navigation channel used by vessels accessing the mine's loading facility.

The Native Title Act contains three distinct processes that might apply to the grant of the ancillary mineral lease if it affects native title. While such a future act passes the freehold test, the procedural rights vary according to the closeness of its association with mining.

In this case, the Department took the view that the ancillary mineral lease did not create a right to mine, and issued notices indicating that the process in section 24MD(6A) of the Native Title Act applied.

The native title holders argued that the process in section 24MD(6B) applied, because the application would involve "the creation of a right to mine for the sole purpose of an infrastructure facility associated with mining". They sought declarations to prevent the grant of the ancillary mineral lease because of a failure to accord them the procedural rights contained in section 24MD(6B).

The primary judge found that the ancillary mineral lease did not fall within section 24MD(6B) of the Native Title Act, and after an appeal by the native title holders, the Full Federal Court agreed.

Although the Full Court disagreed with the primary judge on some issues, the ultimate outcome was to confirm the narrow operation of section 24MD(6B).

Full Federal Court finds that section 24MD(6B) has two limbs

The question raised on the appeal was whether the grant of ML 29881 would be the creation of a right to mine for the sole purpose of the construction of an infrastructure facility associated with mining within the meaning of s 24MD(6B)(b) of the Native Title Act.

First, the Full Court said that for a future act to fall within section 24MD(6B) it must satisfy two elements:

• it must be the creation or variation of a right to mine; and 

• the sole purpose of the creation or variation must be the construction of an infrastructure facility associated with mining.

The Full Court disagreed with the interpretation adopted by the primary judge that sought to apply only one test that focused on the second element of the provision. If a future act is not the creation of a right to mine, then there can be no application of section 24MD(6B) even if the sole purpose of the future act relates to the construction of an infrastructure facility associated with mining.

Meaning of "right to mine"

The Full Court noted that the phrase "right to mine" is not defined in the Native Title Act, but the word "mine" is defined to include exploration, extracting petroleum or gas from the land and quarrying. It was common ground between the parties that the word "mine" as used in the Native Title Act incorporates its ordinary meaning, being the extraction of minerals from the ground, plus the extended meaning from the definition in the Native Title Act.

The issue in dispute was the range of activities encompassed with the phrase "to mine".

The Full Court held that the immediate statutory context of section 24MD(6B) indicates that the phrase "right to mine" cannot be given an unduly narrow construction. The expression “right to mine” refers to a future act that confers a right to engage in mining activities, which typically involve the exploration for and extraction of a mineral (or petroleum or gas) from the ground, and encompasses rights necessary for its meaningful exercise. These might include activities such as the evaluation, processing or refining of minerals, the treatment of tailings, the storage of waste or the removal of minerals from the title area. The Full Court said that typically, each of those categories of activities will be directly associated with and form part of the mining activity on a given parcel of land. Rights permitting such activities can be appropriately described as a right to mine.  The legislature contemplated that a right to mine might be created for the sole purpose of the construction of an infrastructure facility associated with mining.

In this case, the Full Court held that the grant of the mineral lease for the dredge spoil area did not constitute the creation of a "right to mine" within the meaning of section 24MD(6B) because the activities authorised by mineral lease were too remote from mining activities and could not be regarded as necessary for the meaningful exercise of a right to mine. The purpose of the dredge spoil area is to hold dredge spoil to enable vessels to ship ore from the loading facility to ocean going vessels. The Full Court said that the ordinary meaning of mining does not encompass the transportation of mined ore to customers. Clear statutory language would be needed for the phrase "right to mine" to encompass activities associated only with the transportation of mined ore.

The Full Court made it clear that the grant of a mineral lease that does not involve the creation of a right to mine, does not trigger section 24MD(6B) of the Native Title Act. Instead, native title holders and claimants have the same rights as holders of ordinary title by operation of section 24MD(6A).

Meaning of " infrastructure facility"

The definition of "infrastructure facility" in section 253 of the Native Title Act relevantly provides:

infrastructure facility includes any of the following:

(a) a road, railway, bridge or other transport facility; …

(f) a storage or transportation facility for coal, any other mineral or any mineral concentrate;

(g) a dam, pipeline, channel or other water management, distribution or reticulation facility; …

(i) any other thing that is similar to any or all of the things mentioned in paragraphs (a) to (h) and that the Commonwealth Minister determines, by legislative instrument, to be an infrastructure facility for the purposes of this paragraph.

The question for the Full Court was whether this definition was intended to be exhaustive or inclusive. If inclusive, would it also encompass things within the ordinary meaning of the phrase. 

The Full Court noted that definition of "infrastructure facility" was considered by it in South Australia v Slipper [2004] FCAFC 164.  In Slipper, the Full Court was not asked to consider whether it was an exclusive definition and focused instead on whether the facility in question fell within the ordinary meaning of the phrase. Accordingly, this decision was considered in addition to the contentions advanced in this appeal.

The Full Court said that the use of the word “includes” is a strong indicator that the definition of “infrastructure facility” is intended to be non-exhaustive, but it is necessary to consider whether contrary indications arise from the statutory text, context and purpose. In this case, there are a number of strong indicators in favour of an exhaustive construction of the definition.

There were five indicators arising from the statutory text, context and purpose that led to the Full Court to conclude that "infrastructure facility" was an exhaustive definition. These include:

• each of the things enumerated in paras (a) to (h) of the definition appears to fall within the ordinary meaning of the phrase “infrastructure facility”. This suggests that the legislature sought not to expand the ordinary meaning of the term, but to provide an exhaustive explanation of its meaning for the purpose of the Act;
• paragraph (i) empowers the Minister to determine, by legislative instrument, that “any other thing that is similar to any or all of the things mentioned in paras (a) to (h)” is an infrastructure facility for the purpose of the definition.  If the definition were intended to be inclusive, para (i) would be unnecessary; and
• there is a discernible statutory purpose for limiting the definition to the enumerated things. It is understandable that Parliament defined the categories of infrastructure facility to be excluded from the right to negotiate in exhaustive terms.

This conclusion involves something of a departure from the reasoning of the Full Court in Slipper.

The Full Court agreed with the primary judge that the dredge spoil area does not meet the definition in paragraph (f) or (g) of the definition of "infrastructure facility" and would not be an "infrastructure facility" within the meaning of the Native Title Act.

Result - section 24MD(6B) does not apply

Because the ancillary mineral lease was not the creation of the right to mine (or for an 'infrastructure facility') it did not fall within section 24MD(6B) of the Native Title Act, and only the process in section 24MD(6A) of the Native Title Act applied. Section 24MD(6A) provides that native title holders have the same procedural rights as ordinary title holders. 

Impact on the recent amendments to section 24MD(6B)

Section 24MD(6B) originally included a two month notification and objection process and an option for objections to be heard by an independent person or body. An objection could only be referred for hearing by the native title party, leaving many objections potentially unresolved.

The 2021 amendments to the Native Title Act (Native Title Legislation Amendment Act 2021 (Cth)) included a new section 24MD(6B)(f) that requires the Government party to refer an objection for hearing, but not until eight months after notification. This makes the section 24MD(6B) process potentially longer than the six month period in the right to negotiate process, which was intended to be the more significant procedural right.

The Full Federal Court's decision narrowing the scope of section 24MD(6B) looks to mean that it will be used less frequently than has been the case, in any event.

Authors: Leonie Flynn, Expertise Counsel and Clare Lawrence, Partner