New mining lease conditions take effect in NSW

On 2 July 2021, significant reforms that toughen the rehabilitation requirements for mining lease holders took effect. The highly prescriptive requirements have been implemented through an amendment to the Mining Regulation 2016, and will take effect for existing lease holders following a 12-month transition period for large mines or 24-months for small mines.

Key changes to NSW mining leases

The changes and timeframes brought by the Amendments vary depending on whether the mining lease relates to a large or small mine; with a large mine being a mine that requires an environment protection licence under the Protection of the Environment Operations Act 1997, and a small mine being any other mine.

The key changes include:

1. New standard rehabilitation conditions (to replace existing conditions where applicable) that will:
   1. require progressive rehabilitation;
   2. impose environmental protection obligations; and
   3. increase a lease holder's obligations regarding risk assessment, risk management, reporting and record keeping;
2. mining operations plans (MOPs) are to be replaced with a rehabilitation management plan (RMPs); and
3. annual environmental management reports are to be replaced with an annual rehabilitation report and forward program.

Progressive rehabilitation

The Amendments aim to bolster progressive rehabilitation of mines by expressly including this as a condition of a mining lease (older mining leases do not currently have this). The Amendments also introduce new regulatory frameworks that will enhance the NSW Resources Regulator's oversight of a lease holders' compliance with rehabilitation commitments.

The progressive rehabilitation condition will require mining lease holders to rehabilitate "as soon as reasonably practicable" after disturbance occurs. Critically, however, this term is not defined in the Amendments. Guidance material published on the Regulator's website states that it is an objective requirement – the lease holder must meet the standard of behaviour expected of a reasonable person in the lease holder's position.

The Regulator has promised more guidance on what is meant by "as soon as reasonably practicable", but in the interim has noted that the following considerations will be relevant:

• what was known, our ought to have been known by the lease holder at the time;
• what was reasonably foreseeable to the lease holder at the time;
• what was possible in the circumstances; and
• whether it was reasonable in the circumstances to do all that was possible.

Environmental protection obligations 

In addition to requiring progressive rehabilitation, the Amendments will impose new conditions that expressly impose the following environment protection obligations on lease holders:

• must take all reasonable measures to prevent or, if that is not reasonably practicable, to minimise harm to the environment caused by activities under the mining lease. This condition is currently included in many leases, but the Amendments will ensure that this requirement applies uniformly across all mining leases in NSW; and
• must ensure that it rehabilitates land and water in the mining area to achieve the final land use for the mining area as stated in the approved rehabilitation objectives and rehabilitation completion criteria and, for large mines, as spatially depicted in the approved final landform and rehabilitation plan.

Preparing the rehabilitation documents

The new standard mining lease conditions will impose conditions requiring new documents to be prepared to satisfy the rehabilitation assessment and planning requirements.

Lease holders will need to ensure that the rehabilitation documents are prepared in accordance with the manner and form that has been prescribed by the Secretary. This is referred to as the "form and way" requirements and a copy for each relevant rehabilitation document is published on the Regulator's website. The Regulator has also provided a series of Guidelines to lease holders with the preparing the documents.

An outline of each of the rehabilitation documents that need to be prepared is provided below.

Rehabilitation risk assessment (all mines)

To prepare the rehabilitation risk assessment (RRA), the lease holder must identify and evaluate all potential risks to achieving the rehabilitation objectives, rehabilitation completion criteria, and (for large mines) a final land form and rehabilitation plan. The lease holder also needs to identify and implement the specific measures required to eliminate, minimise or mitigate risks.

The lease holder must prepare the before the rehabilitation objective statement for (small mines), or before the RMP (for large mines). An RRA must also be prepared after a reasonably foreseeable hazard is identified that presents a risk to the holder’s ability to ensure that rehabilitation of the mining area achieves the final land use for the mining area or when directed by Secretary.

Rehabilitation management plan (large mines)

For large mines, a lease holder must prepare a rehabilitation management plan (RMP) that outlines the key risks to achieving rehabilitation objectives, rehabilitation criteria and final land use. It is required to incorporate the risk control measures identified in the RRA, and identify triggers and actions to manage and respond to risks to rehabilitation performance and outcomes.

The RMP must be prepared by 1 August 2022. It must also be amended:

• within 30 days after a substituted version of a rehabilitation document is approved by Secretary or if an amendment to the rehabilitation document is made;
• as soon as reasonably practicable after rehabilitation risk assessment is conducted to reflect any changes to risk control measures; or
• as directed by the Secretary.

Rehabilitation outcome documents (all mines)

The rehabilitation outcome documents that must be prepared are:

• a rehabilitation objective (RO) statement (describes the rehabilitation outcomes required to achieve the final land use for the mining area);
• rehabilitation completion criteria (RCC) statement (defines the key criteria and "benchmark values" for achieving the RO);
• final landform and rehabilitation plan (large mines only). These documents include ) is a spatial plan that must be lodged via the Mine Rehabilitation Portal depicting final land use and details the final landform topography and location of rehabilitation features.

Forward program (all mines)

The forward program provides a three-year forecast, involving a schedule of mining activities and a summary of the spatial progress of rehabilitation through its various phases, and requires that rehabilitation of land and water disturbed by mining activities under the mining lease as reasonably practicable after the disturbance occurs.

Lease holders must prepare and submit the forward program by 1 August 2022 for large mines or 1 August 2023 for small mines. A forward program must also be prepared and given to the Secretary 60 days after the last day of each annual reporting period, commencing with the annual reporting period in which the forward program was initially given, or at a later day approved by the Secretary. 

Ongoing reporting, recording and notification requirements

The Amendments will include new mining lease conditions regarding annual reporting, record-keeping, non-compliance reporting and notification requirements regarding new development. A summary of these new conditions is outlined below.

Annual reporting

Lease holders are required to annually submit a rehabilitation report and a forward program 60 days after the last day of each annual reporting period or as directed by the Secretary, in accordance with the approved "form and way".

For the annual rehabilitation report, this must report the rehabilitation carried out on the land during the previous 12 month period, and include data to enable the Regulator to assess whether the land is being progressively rehabilitated an in accordance with the approve RO, RCC and final land use. The requirements for the submission of the annual forward program are the same as those that are required for the initial version (see above).

Lease holders will also be required to submit a rehabilitation cost estimate (RCE) in the annual rehabilitation report and forward program. This is in addition to the current triggers for submitting an RCE, being when a lease is renewed or transferred. If the RCE is inadequate, it will be rejected and the lease holder will be required to submit a revised one, or the Secretary will determine the security amount.

Record-keeping

The holder a mining lease must create and maintain records of all actions taken that demonstrate compliance with the requirements. There are "form and way" requirements for record keeping that must be complied with. The Regulator has also published a guideline which outlines a number of records that must be kept for large and small mines.

Reporting non-compliances

Mining lease holders will be required to provide the Minister with a written report detailing a non-compliance with a condition of the mining lease or the Mining Act 2016 or Mining Regulation 2016 within seven days after becoming aware of the non-compliance. In addition to identifying and describing the non-compliance, the report must also describe the causes or likely causes of the non-compliance as well as the action that has or will be taken to mitigate the effects and prevent any recurrence.

Notification – development

Except in cases of state significant development, all mining lease holders are required to notify the Regulator of a development application within 10 days after either:

• making an application for development consent that relates to the mining area; or
• making an application for modification of a development consent that proposes to modify a condition of the consent that relates to rehabilitation of the mining area in a way that may affect an obligation under the mining lease relating to rehabilitation.

Notification is not required for state significant development as DPIE is automatically triggered in that scenario and will control any public notification of the development application.

Publication and record-keeping

The Amendments will also impose a new standard condition requiring lease holders to publish certain documents on its website in a prominent position. The documents and timeframe for publication are outlined below.

Personal information within the meaning of the Privacy and Personal information Protection Act 1998 can be excluded.

Transition arrangements

To give effect to the reforms, mining lease conditions will be varied by the Department of Industry, Planning and Environment (DPIE) through the existing variation process contained in Schedule 1B, Clause 12 of the Mining Act 1991.

However, the variations to mining leases will be carried out in accordance with transition arrangements to allow existing lease holders to prepare for the new requirements. 

For each mining lease, DPIE will review the existing conditions, identify any conditions that are no longer required (because they are outdated or duplicative, for example), and prepare a revised mining lease in draft. The lease holder will then have at least 28-days to make a submission about the proposed variation before the revised mining lease is issued.

The new mining lease conditions will be effective from 2 July 2022 for large mines and from 2 July 2023 for existing small mines.

Mine Rehabilitation Portal

To assist with monitoring compliance with a lease holder's progressive rehabilitation obligation, the Regulator has established a mine rehabilitation portal to collect geographical information system (GIS) spatial data about rehabilitation for large mines. Lease holders will be required to submit to the portal the final landform and rehabilitation plan data, as well as rehabilitation data submitted as part of the annual report and forward program. The Regulator has published a Guideline to assist leaseholders with data preparation and submission.