Landholder frequently asked questions
New extractive industries regulations commence on 26 January 2020. This page is being reviewed and may require updates.
The process of exploring and mining of mineral resources may raise questions for landholders. Frequently asked questions are answered below.
Community and landholder concerns
All new licence applications must be advertised in a newspaper circulating in the locality of the proposed licence, and a Wednesday edition of a newspaper circulating generally throughout Victoria (mining licences of less than five hectares only need to advertise in the local newspaper).
The applicant must fulfil this requirement within 14 days of being notified that their application has been given highest ranking. Where it is a mining licence, the applicant must give notice to all affected landholders within the area of the application.
This public notification gives landholders the opportunity to raise concerns by lodging an objection or making a comment for ministerial consideration before the application is determined.
Note: if your property falls within the area of an application, it does not automatically follow that entry to your land is required.
If mineral resources are found on your property, the exploration licensee may then apply for a mining licence.
The granting of the mining licence confers mineral rights from the Crown to the licensee, but it does not give the licensee authority to carry out mining operations. Mining can only begin when a number of other approvals including planning permission, work plan approval, rehabilitation bond lodgement and landholder agreements are in place.
All mineral resources belong to the people of Victoria and are therefore owned by the Crown. When minerals are mined, under the proper authority, they become the property of the person extracting them.
Before any activity can commence, the licensee is required to contact the affected landholders to discuss the implications of their proposed activities. As well, the licensee is required to have obtained consent of the landholder or reached a compensation agreement with the landholder.
Exploration does not always lead to mining. Due to the difficulty of identifying commercial ore bodies, only about one in 1,000 exploration projects progress to the mining stage.
A mineral deposit must first be determined as economically viable before any further activity can proceed. This will depend on a variety of factors including the size and grade of the resource, the predicted price of the mineral, accessibility, transportability and expected efficiency of production.
Note: while exploration often takes place over large areas, the area subsequently mined, if at all, is usually much smaller.
Mining licence boundaries are often irregular in shape and therefore must be readily identified. Within four weeks of a mining licence being granted, the licensee must mark out the land with corner posts, identification plates and trenches.
This must be done in accordance with the coordinates of the licence boundaries as per the granted licence document and instruments. If the licensed area is more than five hectares, boundaries must also be surveyed.
If landholder consent to enter the land has been sought but not obtained, access may be granted by authority from the Minister for Resources. Entry in this case is only for the purpose of marking out and having the area surveyed.
Holders of an exploration or mining licence must ensure that their operations minimise, as far as possible, interference with other activities on the land.
Where mining is proposed on agricultural land, the licensee must prepare a statement of economic significance to establish whether the value of the mineral resource is more or less than its agricultural worth.
This statement must be made within six months of the granting of the licence (or lodging of a work plan) and a copy must be provided to the landholder.
Rights, requirements and processes
An exploration licence grants exclusive rights, subject to conditions, to explore for minerals in graticular sections comprising an area of up to 500 square kilometres (or larger with ministerial approval). Mining is not permitted on an exploration licence.
In general, an exploration licence is valid for five years, with the option to apply for renewal of up to 5 years, and provides the right to apply for a mining licence. During the term of an exploration licence, licensees are required to relinquish ground.
There are four relinquishment requirements: after two years, 25 per cent of the ground must be relinquished; after four years an additional 35 per cent must be relinquished, after 7 years an additional 20 per cent must be relinquished and after 10 years another 10 per cent must be relinquished.
A mining licence does not imply permission for mining to take place, but is required to seek work approvals required to establish a mining operation. Exploration is also permitted under a mining licence, which may cover an area of up to 260 hectares (or larger with ministerial approval). A mining licence may be valid for up to 20 years or longer with ministerial approval, with the option to apply for renewal.
Under both licences, work (other than work using hand tools) cannot take place within 100 metres of a dwelling (house) unless the landholder consents.
An application for an exploration or mining licence must include information about the applicant and their proposed operation.
This includes technical qualifications and experience, a map of the proposed licence area, information on compliance with Native Title requirements (if the application refers to Crown land), estimates of annual expenditure, evidence of financial capability to undertake the proposed work, and details of the proposed work program.
Most licences take three to four months to process. This period can be significantly longer where there are competing applications or where processes are required to address the Commonwealth Native Title Act 1993.
The granting of a licence does not immediately imply authority to begin work. For mining, and in some cases exploration, the licensee must obtain numerous consents and approvals from other agencies, ministers, bodies and individuals before they can commence work.
Any person may object to or comment on a licence being granted, provided the licence application is new and not a renewal.
The objection or comment must be in writing, include the grounds on which it is made (relevant to legislative provisions), and be sent to the appropriate government representative within 21 days after the latest date on which the licence application was advertised.
All objections and comments received are considered by the appropriate government representative before a decision is made on whether to grant the licence.
As a result, additional conditions may be imposed on the licence. These may relate to technical requirements but can also include issues that are of community concern.
When assessing the suitability of a licensee, the department refers to section 15(6) of the MRSDA. This includes whether the applicant is ‘fit and proper’ to hold the licence, intends to comply with the MRSDA, genuinely intends to do work, has an appropriate program of work and is likely to be able to finance the proposed work and rehabilitation.
Objections and comments not directly related to section 15(6) of the MRSDA cannot be considered when assessing whether a licensee is ‘fit and proper’.
However, objections and comments will be considered before a decision is made on granting the licence and in relation to the work approval process.
Exploration authorisation typically requires a work plan, rehabilitation bond, public liability insurance and various other consents and approvals. The work plan must address management strategies for public safety, environmental impact and land rehabilitation.
Low-impact exploration as defined in the MRSDA does not require a work plan.
For exploration work that is deemed to have a material impact on the environment, the Minister may require preparation of an impact statement (different from an Environment Effects Statement). This provision is intended to assess and manage unusually high-impact exploration activities, for example major access road or pilot plant construction.
Authorisation of mining requires an approved work plan, rehabilitation bond, public liability insurance, planning approval and other consents including consent/compensation with landholders. Planning approval entails a planning permit or preparation of an Environment Effects Statement (EES) in accordance with the Environment Effects Act 1978.
The work plan required to gain work authorisation must address management strategies for public safety and environmental impact, a rehabilitation plan and a community engagement (CE) plan.
Affected landholders (whose land is located within the boundaries of the mining licence) and relevant stakeholders must be consulted in the preparation of the work plan, which becomes binding on the licensee when approved by the department.
The community engagement (CE) plan prepared by the mining licensee should clearly identify the community and describe how, when and what engagement will occur with that community during all stages of the mining project.
Minimum requirements of the CE plan are stipulated in the Mineral Resources (Sustainable Development) (Mineral Industries) Regulations 2013 and depend on the geographical size of the licence and what activities the licensee is undertaking.
The department provides Community Engagement Guidelines for Mining and Mineral Exploration in Victoria to assist licensees in their fulfilment of these requirements. Exploration licensees are not required to develop a CE plan.
In addition to the CE plan, both exploration and mining licensees have a duty to consult with the community during all stages of a project, from exploration through to the operational phase and rehabilitation. This means that the licensee must share information with the community about any activities authorised by the licence that may affect that community.
Consultation techniques may include face-to face meetings, notice boards, information flyers, telephone, written electronic surveys, hotline or phone-in opportunities, media advertising, invitations for submissions, public exhibitions and websites.
The purpose of this requirement is to share information with the community about any activities authorised by the licensee and ensure that the community is provided with reasonable opportunities to express their views.
The Minister for Resources may impose and vary conditions on a licence, most notably for the protection of the environment.
Conditions usually involve:
- rehabilitation of the land
- protection of the environment
- protection of groundwater
- provision and implementation of environmental offsets
- reports on the discovery of minerals
- access to and use of the land by other licence holders
- protection of community facilities.
Exploration licence holders are also bound by the department's Code of practice for mineral exploration.
The code provides practical guidance about how exploration work should be conducted in Victoria to meet regulatory requirements and environmental standards.
Consent and compensation
Under section 42(2)(c) of the MRSDA, permission to start work on a mining licence will only be granted once the licensee has obtained the written consent of the landholder or made and registered a compensation agreement with them.
Most companies will present a contract proposing conditions of access to your property for the purpose of exploration or mining. The content of any contract is subject to agreement by each party. The department is not a party to such contracts.
We recommend you seek legal advice before you enter into any binding contract.
If a landholder does not provide consent and an appropriate amount of compensation cannot be agreed, then either party may refer to the Victorian Civil and Administrative Tribunal (VCAT).
VCAT does not determine the right to access land, rather the amount of compensation to be paid to the landholder.
VCAT is available where conciliation between the parties has failed to achieve a satisfactory settlement negotiation and should be used as a last resort.
Yes, landholder consent is binding on all subsequent landholders.
As stated in section 45(3) of the MRSDA, landholder consent allowing the exploration and/or mining of minerals cannot be withdrawn by the landholder or any subsequent landholders.
Compensation provisions apply only where landholders suffer loss or damage as a result of work on a licence or approval of a work plan. Compensation is not payable for the value of the minerals, nor is it a prerequisite for landholder consent.
Compensation relating to private land usually arises where land is to be occupied for exploration or mining. Landholder consent or a compensation agreement must be in place before work can be approved.
This requirement does not give landholders the absolute power to control access, because if agreement is not reached the amount of compensation is determined by the Victorian Civil and Administrative Tribunal (VCAT) or the Supreme Court.
Compensation is payable only for loss or damage to the landholder’s interests in the land as a direct, natural and reasonable consequence of the exploration or mining activities.
Such instances include:
- deprivation of possession of the whole or any part of the surface of the land
- damage to the surface of the land
- damage to any improvements on the land
- severance of the land from other land belonging to you
- loss of amenity including recreation and conservation values
- loss of opportunity to make any planned improvement on the land
- any decrease in market value of your interest in the land
- reasonable incidental expenses in obtaining and moving to replacement land, if required
- intangible and non-pecuniary disadvantages not otherwise compensable (additional 10 per cent).
We recommend you seek legal advice before you enter into a compensation agreement.
Where parties have failed to negotiate a satisfactory settlement, the disputed compensation claim may be referred to the Victorian Civil and Administrative Tribunal (VCAT), in accordance with Part 10 of the Land Acquisition and Compensation Act 1986.
If the amount of compensation in dispute exceeds $50,000, either party can seek to have the matter resolved by the Supreme Court.
Any amount of compensation paid, agreed to be paid, or determined is not affected by any subsequent change in the ownership or occupancy of land. New owners or occupiers cannot seek further compensation.
The compensation agreement remains with the land not the landholder.
Environmental and land use concerns
All areas in Victoria, unless specifically exempt (e.g. National Parks, State Parks, wilderness areas), are open to exploration and mining licence applications.
Before any minerals exploration or mining operation can commence, a work plan addressing environmental risks must be approved and a rehabilitation bond lodged. The rehabilitation bond represents security of payment for any rehabilitation work that may be necessary as a result of a minerals exploration or mining operation. Other approvals may also be required under the Environment Protection Act 1970 and the Water Act 1989.
In addition, exploration licence holders are bound by the department's Code of Practice for Mineral Exploration. The code provides practical guidance about how exploration work should be conducted in Victoria to meet regulatory requirements and environmental standards.
Mining licensees must also obtain a planning permit or prepare an Environment Effects Statement (EES), which includes public and stakeholder consultation. As part of this process, potential environmental impacts must be identified and assessed and mitigation measures proposed. Residual environmental impacts will be considered during the planning approval process or when a determination is made for the project to proceed.
Further, all mineral development projects in Victoria are subject to the government’s ‘Permitted clearing of native vegetation – Biodiversity assessment guidelines’, which strives for net gain in native vegetation via protection, enhancement and revegetation of the state’s native flora.
Environmental issues expected to be addressed by licensees include:
- dust and noise emissions control
- drainage and discharge control (including storm water management)
- erosion control
- noxious weeds and pests control
- removal or restoration of native vegetation
- progressive and final rehabilitation
- groundwater protection.
These and other relevant environmental issues are expected to be addressed in the licensee’s work plan, which provides detailed information about proposed on-site works and subsequent rehabilitation of the land.
Licence holders are required to rehabilitate any land disturbed by the carrying out of work under the licence. For exploration and mining licenses the rehabilitation work must be carried out with respective work plans and licence conditions. The licensee must consult with the landholder about the proposed work.
Rehabilitation plans must take into account any special characteristics of the land, the surrounding environment, the need to stabilise the land, the desirability or otherwise of returning agricultural land to its original state, and potential long-term impact on the environment. In addition, licensees are required to lodge a rehabilitation bond to ensure satisfactory rehabilitation occurs.
Rehabilitation obligations can continue beyond the life of a licence.
Ground water and surface water is used in a variety of ways in exploration and mining operations including:
- for dust control
- in drilling
- to maintain vegetation areas
- for ore processing
- to reduce erosion
- to make mining safe.
Mining operations may include the construction of facilities including water races, tailings dumps, tailings dams, drains, dams, reservoirs, pipelines and bores. These will be specified in the work plan.
Water is subject to well established controls allowing for a variety of uses. Mining operators must obtain allocations through licences under the work authority, the Water Act 1989, while water discharges (e.g. water injected back into groundwater or discharged into streams) is subject to the Environment Protection Act 1970.
Issues regarding groundwater management are examined by the department in partnership with the Department of Environment, Land, Water & Planning (DELWP). Conditions for protection of groundwater may be imposed on an exploration or mining licence.
Where the land covered by a licence is defined as restricted Crown land (regional parks and most reserves) the consent of the Crown land Minister is required.
For work on other Crown land, only an approved work plan is required. DELWP is usually consulted before the department approves a work plan that includes Crown land.
Where the land is managed by the Melbourne Water Corporation or an Authority under the Water Act 1989, consent must be sought from the Board or that Authority.
Where the proposed licence covers public highways, roads and streets, then the manager of those roadways must be given 21 days' notice of the proposed work.
If you suspect that a licensee is not meeting its obligation to minimise risk to people, property, or the environment, you can contact an inspector from the department and enquire about the situation. If you have a complaint about an operation, this too can be registered with the department.
All complaints will be investigated by an inspector from the department.
This investigation could potentially lead to:
- directions of measures that must be taken to remove or reduce the risk
- a prohibition notice barring the licensee from carrying out or continuing to carry out any activity related to minerals exploration or mining operations
- other action under the MRSDA.
Continual breaches may result in the department proposing cancellation of the licence. Other enforcement actions include prosecution and infringement notices.
An inspector from the department will advise you of the outcomes of an investigation.
For more information please contact us.
Page last updated: 20 Nov 2019