Exceptional Circumstances Policy

1 Purpose

This operational policy sets out the types of factors the Minister for Resources (or Ministerial delegate) as decision maker may consider when assessing whether there are exceptional circumstances to warrant a second renewal of an exploration licence under the Mineral Resources (Sustainable Development) Act 1990 (MRSDA).

This operational policy applies to the renewal of exploration licences under section 31(6)(a) of the MRSDA only. It does not address all the other requirements that a licence holder must demonstrate to support an application for a second renewal of an exploration licence, such as the requirement to demonstrate the likelihood of identifying minerals in the land covered by the licence under section 31(6)(b) of the MRSDA.

Licence holders who believe that there are exceptional circumstances warranting a second renewal of their exploration licence are encouraged to:

• proactively communicate with Earth Resources Regulation at the time (or as close to the time as possible) of the exceptional circumstance occurring rather than waiting for end of the licence term,
• contact the regulator to discuss their circumstance with a view to identifying the types of evidence that can be used to demonstrate exceptional circumstances, and
• make an application at least three (3) months prior to the expiry of the existing exploration licence.

This operational policy does not apply to retention licences.

1.1 Policy intent

The objectives of the MRSDA include (but are not limited to) encouraging and facilitating exploration for minerals and fostering the establishment and continuation of mining operations. This also includes providing an effective administrative structure for making decisions concerning the allocation of rights to mineral resources for the benefit of the general public.

Within this context, the overall intent of this operational policy is to enable the development of the State’s resources by retaining competent explorers and providing opportunities for other explorers to enter the sector by ‘turning over’ areas otherwise held by unsuccessful explorers. (Legislative time limits and relinquishment requirements applicable to exploration licences also aim to enable the entry of other explorers to identify prospective mineral resources and move towards mining those resources.)

More specifically, licence holders are encouraged to:

• undertake sufficient exploration activities during the initial term and first renewal of an exploration licence to confirm prospectivity, with the aim to potentially progress towards or into mining of an available resource under a subsequent retention or mining licence. (A retention licence is an intermediate licence between an exploration licence and a mining licence and may be applied for where a mineral resource has been identified and other requirements are met. For more information, refer to retention licence guidelines).
• appropriately manage the risks that are within their control associated with achieving the exploration work program activities and outcomes.

An exploration licence can only be renewed a second time if, among other things, the Minister (or delegate) considers that there are exceptional circumstances to warrant the renewal. A second renewal is neither automatic nor a right.

Exceptional circumstances are assessed on a case-by-case basis.

2 Relevant legislation

The objectives of the MRSDA are set out in section 2 and include encouraging and facilitating exploration for minerals and fostering the establishment and continuation of mining operations.

Section 31(6) of the MRSDA specifies that an exploration licence may only be renewed for a second time if the decision maker considers that there are exceptional circumstances to warrant a second renewal and is satisfied that there is a likelihood of the licence holder identifying minerals in the land covered by the licence during the period for which the licence may be renewed.

The licensee must have made progress in identifying and testing of a target or targets and delineating mineral resources, and therefore be likely to be able to prepare a mineralisation report during the term of the renewal. (The Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves (the JORC Code) sets the minimum standards for public reporting of minerals exploration results, mineral resources and ore reserves).

Other relevant legislative requirements include:

• Section 32(2A) of the MRSDA specifies that a second renewal of an exploration licence can only be for a period of up to five years.
• Regulation 30 of the Mineral Resources (Sustainable Development) (Mineral Industries) Regulation 2019 (the Regulations) specifies the information requirements for renewal of exploration licences.

The relevant extracts of the MRSDA and the Regulations are listed in Appendix 1.

3 Assessment of exceptional circumstances

All applications for a second renewal of an exploration licence must set out all matters that the applicant considers are exceptional circumstances to warrant a second renewal.

3.1 What is an exceptional circumstance?

Exceptional circumstances may be positive events such as where a significant exploration discovery becomes known late in the licence term changes the exploration model fundamentally for example information that leads to the reinterpretation of historical data or the testing of new or different targets.

Exceptional circumstances may also occur when a licence holder has done everything reasonably within their power or control to deliver on their agreed work program but has been unable to meet their statutory obligations.

Exceptional circumstances may constitute events or actions by third parties that:

1. are beyond the licence holder’s control, and
2. the licence holder could not reasonably have anticipated, avoided or managed within the current exploration licence term, and
3. have had a significant and direct impact on the progress of the agreed program of work set out in the current exploration licence.

Examples of the types of activities that may be considered severally or collectively as exceptional circumstances during the term of a first licence renewal include:

• natural disasters including extreme weather events, such as major storms, major flooding, bushfires and earthquakes
• pandemics or other global emergencies that impact the conduct of minerals exploration
• delays in gaining agreements with landowners for access to land, wherein the licence holder has acted proactively and in good faith using the available negotiation, mediation and appeal means to secure access
• delays in gaining agreements with Traditional Owners, wherein the licence holder has acted proactively and in good faith using the available means,
• delays in regulatory processes that are outside of the control of the licence holder, wherein the licence holder has acted proactively and in good faith, or
• other events or actions by third parties that are clearly outside of the control of the licence holder.

3.2 What is not an exceptional circumstance?

Common and foreseeable risks in the resources sector, are unlikely to demonstrate that exceptional circumstances exist including, for example:

• availability of personnel with relevant experience or capability to conduct the exploration work program, including geologists
• availability of personnel with relevant management, financial or technical skills to manage the exploration program
• availability of project finance
• availability of exploration equipment
• delays or failure in securing necessary board approvals
• delays in gaining access to land wherein the licence holder has not acted proactively or in good faith using the available means to secure access
• delays in regulatory processes that are within the control of the licence holder
• seasonal weather conditions
• ill health of personnel, including staff and contractors
• poor exploration results
• delays relating to the completion of mineralisation reports or compliance obligations.

Exceptional circumstances do not generally include short term disruptions or circumstances that have a non material impact on the conduct of licence holders’ exploration programs.

A licence holder may wish to consider relinquishing all or part of a licensed area during the term of the current exploration licence as an alternative under these types of circumstances.

3.3 Information required to support a claim of exceptional circumstances

Applicants need to set out all the matters that they consider are exceptional circumstances warranting the second licence renewal with as much written evidence as possible, having regard to the guidance provided in sections 3.1 and 3.2 above.

The evidence should generally demonstrate and explain clearly:

• the actions that the licence holder took to identify, avoid and manage risks to the delivery of the exploration program
• the nature of the exceptional circumstance(s) that has or have occurred
• the impact it had on the licence holder’s ability to meet the statutory requirements under the MRSDA
• the event could not be reasonably anticipated, avoided or managed by the licence holder.

Examples of information that can be used to support the claim may include letters, emails, technical data, maps and plans.

Licence holders can contact Earth Resources Regulation to discuss their circumstance with a view to identifying the types of evidence that can be used to demonstrate exceptional circumstances. Licence holders are also encouraged to proactively communicate with the regulator at the time (or as close to the time as possible) of the exceptional circumstance occurring rather than waiting for end of the licence term.

Any discussions between a licensee and regulatory staff should not be interpreted as endorsing the validity of a claim for exceptional circumstances. All licensing decisions will be made in writing by the relevant decision maker.

Failure to provide sufficient supporting evidence about an exceptional circumstance may result in the refusal of an application for a second renewal of an exploration licence.

3.4 Exceptional circumstances impacting multiple licence holders

Further guidance may be issued from time to time on any exceptional circumstances that potentially impact multiple licence holders, as per information issued in response to COVID-19.

3.5 Renewal term

The terms for second licence renewals will be set taking account of the following factors (up to the maximum five year term):

• the period/impact of the exceptional circumstance(s) during the term of the first licence renewal,
• exploration results during the terms of the original licence and first licence renewal,
• the appropriateness of the proposed exploration work program to be conducted during the second licence renewal term, and
• the likelihood of the licensee identifying economic minerals in the land licence area during the proposed renewal period.

All renewal periods will be rounded up to the nearest 12 months based on the anniversary of the grant date for the original licence.

(Second renewal of an exploration licence occurs only where there are exceptional circumstances and there is the likelihood of identifying minerals during the second renewal period. Where a mineral resource is not economically viable to mine a Retention Licence may be applied for).

4 General procedures

4.1 Procedural fairness

Licence holders will be informed in writing of any decision and the reasons for the decision with respect to their application for a second renewal of their exploration licence based on exceptional circumstances.

Applicants will be provided 28 days to respond in writing to further explain any relevant matter and provide supporting evidence.

4.2 Provision of accurate and sufficient information

Licence holders need to submit current and accurate information to inform the assessment of their application for a second renewal of their exploration licence.

An application may be refused if a licence holders fails to provide sufficient information to enable the assessment of their application for a second renewal of their exploration licence.  A negative inference will not be drawn from any failure to provide the further requested information. However, the assessment may result in an unfavourable determination in circumstances where the application is assessed on incomplete or insufficient information.

Earth Resources Regulation will consider the provision of any false information with respect to an applicant’s status as fit and proper to hold any minerals licence in Victoria, in accordance with the Fit and Proper Person Policy.

4.3 Rights of appeal

A decision not to renew a licence for a second term may be judicially reviewed by the Supreme Court of Victoria: https://www.supremecourt.vic.gov.au

A dispute may also be brought to the Mining Warden for resolution. The Mining Warden is an independent statutory office holder appointed by the Governor in Council under the Mineral Resources (Sustainable Development Act) 1990 who investigates and attempts to resolve disputes by mediation, conciliation or arbitration, including between a licensee or an applicant for a licence and the Department.

5 Transitional arrangements

Applicants already seeking a second renewal of their exploration licence will be given an opportunity to submit any additional information to support their application in line with this operational policy.

6 Other relevant policies

Other policies and guidelines of relevance to this operational policy include:

• Exploration Licence Guidelines.

Appendix 1: Relevant sections of the legislation

Mineral Resources (Sustainable Development) Act 1990

Section 31 - Renewals of licences

6. In the case of the application for the second renewal of an exploration licence, the Minister may only renew the licence if the Minister:
   1. considers there are exceptional circumstances to warrant that second renewal.

Section 32 - Period of renewal

2. (A) In the case of an application for the second renewal of an exploration licence, the Minister may only renew the exploration licence for a period of up to 5 years.

Mineral Resources (Sustainable Development) (Mineral Industries) Regulations 2019

Regulation 30 - Information requirements for renewal of exploration licences

An application for renewal of an exploration licence under section 29(1) of the Act must contain:

5. reasons for renewal of the licence, including:
   3. if the application is for the second renewal of the licence, all matters that the applicant considers are exceptional circumstances to warrant a second renewal.

Page last updated: 13 Dec 2022