In the case of many activities including drilling by smaller metals explorers – how useless, expensive and unproductive are the NSW Govt required Reviews of Environmental Factors (REF) reports.

We have all noticed over the last several years the Green & NIMBY campaigns against Coal Seam Gas (CSG) drilling in NSW. The NSW Govt has been so influenced by this that it has loaded the entire resource exploration industry with onerous time and money wasting extra red/green tape. Clearly the NSW Govt has little understanding of how mineral exploration works.
Before drilling a few holes now – the sort of low impacts where after normal site rehab you might have trouble finding sites in a few years – it is required to prepare a “Review of Environmental Factors” or REF which can run to over 100 pages and usually involve some flora & fauna study, heritage, you name it. Look in the list for REF’s from smaller metals explorers.
Here are headings from one small Chapter of an 80 page REF from a project in a remote and rugged area of NSW.
Flora and Fauna Assessment
Water
Air quality
Soil Resources
Noise and Vibration
Non-Aboriginal Heritage Assessment
Aboriginal Heritage Assessment
Visual Assessment
Socio-Economic
Hazardous
Contaminated Land
Bushfire
Cumulative Environmental Impacts
Just to drill several core holes to less than 160m depth – each hole widely separated over thousands of acres of bush and grazing land. A consultant has been used and I would guess the REF cost at $10K to $20K. A few years ago the exploration company geologist would have filed a brief Surface Disturbance Notice with his local branch of the “Mines Dept”, checked with a Mines Inspector if he was unclear about any point, agreed on compensation with the landowner and got on with work all within a few weeks.
The existing Exploration Licence document runs to 40 odd clauses covering every eventuality and the holder has already posted a bond of $10,000 and upward for a small EL. IMHO the majority of effort and cost expended on these REF’s is just an utter waste of money with the resulting REF’s reports of no value to society whatsoever. In fact a net loss to society if you add up the various public servants in the Govt Depts and Councils that have to receive, process, file, administer etc this twaddle. I have seen a REF where they solemnly discussed searching for indigenous artifacts and heritage on a tailings dump that was ~20 years old. The process has gone mad.
Every dollar wasted on pointless red & green tape is a dollar that can not be spent on mineral exploration and Australia will most definitely be the poorer for it.

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Productivity Commission Inquiry into Resource Exploration Productivity

Starting late 2012 the Productivity Commission, a Commonwealth bureaucracy, has been beavering away on a 12-month inquiry into Mineral and Energy Resource Exploration. They have found that Resource Exploration Productivity is falling – not surprising considering the ever increasing load of red & green tape that explorers have to comply with. The PC list of key points covers some of the issues of great concern to smaller metal/minerals explorers.
Judith Sloan comments on Labor future-proofing the PC against it being useful to the next Govt.
In view the PC is a Federal body and minerals are administered by the States and NT, it is hard to be optimistic about much good emerging from this current PC inquiry. I note not one listed metals exploration company has put in a submission – most of the peak bodies are there.

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A few interesting press articles touching on mineral resources exploration issues.

NSW court verdict on Rio’s coalmine expansion a blow to jobs

Coalition will ‘get around’ new law on coal seam gas – 31 May 2013
Environmental assessments will be done by states, says shadow resources minister, speeding up approval process for CSG wells

Blow for Newcrest – exploration licence quashed

Empire strikes back against shareholders

“Goose is cooked, but you didn’t hear it from me”

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New South Wales coal licensing corruption; ex Labor Govt Ministers being questioned at ICAC

By Clayton Loader
For months now the news media has featured revelations from public hearings at The Independent Commission Against Corruption (ICAC); featuring ex Labor Ministers Ian MacDonald and Edward Obeid. This article is an attempt to provide some context and work up a timeline including some basic maps so we have a idea what was done where & when.
We know that mining is an important factor in our National wealth – so this article is written from the perspective that we do not want a weaker and poorer Nation – but we expect mining and mineral exploration to be impartially regulated for the good of all.
Mining is worth $20Bn (mainly coal) per year to NSW and actual mines occupy a very small area of the State, although for sure in the Hunter region the percentage is higher because of open cast coal mining but that’s success for you. “Where there’s muck there’s money”, goes the old saying. Statewide agriculture earns less than half of mining and occupies vast areas, many farmers are keen sellers of their land when the miners knock on their door.
Here is link to a NSW Govt map of NSW coalfields just so everybody can update themselves on some basic geography.
Note Bylong in the north of the blue zone.
A quick diversion here quickly explaining the broad legal structure of how Australia regulates mineral exploration and mining.
In Australia the States own and administer the vast majority of terrestrial mineral rights – farmers and graziers own or lease surface rights. So lets get it correct first up – landowners do not own the minerals – they do not have a veto on access for mineral exploration – but they are entitled to fair compensation while exploration companies conduct exploration on the land.
The system works by States (& the NT) licencing competent exploration companies to explore for metals, coal, oil and gas. The expectation being that success leads to a Mining Lease at which point the explorer will usually buy the farms involved. There are strict compliance, environmental and reporting conditions on explorers and large cash bonds have to be posted to ensure performance. The aim is that the undiscovered mineral wealth of the State is explored for diligently and any mining opportunities are exploited which will have flow through benefits to the entire economy – all with a minimum of environmental impacts.
In NSW the Govt has traditionally played a role in coal exploration, they hold large prospective areas for the Crown which is intended to benefit all of us; they do some coal drilling and if payable-coal is discovered they can then offer potential mine areas out to industry by public tender.
To see the reasons for the flurry of Ministerial activity half a decade or more ago which has lead to the ICAC hearings, first we look at the 20 year price history for Australian thermal or steaming coal.
Quite a roller coaster but that’s commodities for you, prices are still at much higher levels than pre 2007.
A particular coal product varies in value due to location and rank which relates to the depth of burial during the geological time the coal was formed. Low rank coal, lignite or brown coal is usually cheapest and contains the least energy, this type of coal is used to generate electricity in Victoria.
Thermal or steaming coals are burnt for their energy but are higher rank than lignite.
Coking or metallurgical coals tend to be higher rank again and are generally more expensive; used in making steel. Google will provide links to much info for those interested.

In the space of about a year starting in late 2008 the NSW Minister Ian MacDonald, released by some form of tender process at least four coal exploration licences listed below for discussion.
Map of areas 2, 3 & 4.
[1] 15 Aug 2008 Govt announces $300Mn Watermark EL7223 deal with Shenhua a large Chinese resource group – situated SE of Gunnedah and NOT in the sights of ICAC, included as an example of what the State can earn through the public tender process at a time of high coal prices.
[2] Doyles Creek EL7270 granted to Doyles Creek Mining Pty Ltd on 15 Dec 2008 – The EL is now owned by ASX listed company Nucoal Resources Ltd – ICAC hearings are planned.
[3] Mt Penny EL7406 granted to Mt Penny Coal Pty Ltd (Cascade) on 21 Oct 2009. This is the Bylong Valley EL that has to date has been the focus of most ICAC and media attention. Mt Penny Coal Pty Ltd is owned by Cascade Coal and was in Late 2010 – early 2011 sold on to the ASX listed White Energy who pulled out of the deal with Cascade in April 2011.
[4] Ferndale EL7430 granted to Loyal Coal Pty Ltd on 18 Dec 2009 – Loyal was owned/controlled by Andrew Kaidbay who has told the ICAC that he has represented the Obeids – ICAC transcript from the morning of 29 Nov 2012 has Mr Kaidbay discussing the Yarrawa EL. Ferndale was owned by Coalworks who were taken over by ASX listed company Whitehaven Coal Ltd in 2012. The timing of Coalworks buying of Loyal Coal is not clear yet.

ICAC inquiries into these coal licensing corruption issues are termed Operation Jasper (EL’s 7406 & 7430) and Operation Acacia (EL7270 Doyles Creek). Jasper also includes Glendon Brook (EL 7405) which has not been examined here.
A link to a pdf file – Operations Jasper Acacia Indus public inquiry scope -
Operations Jasper and Acacia transcripts can be located at this link – helps if you know the date – the pdf files are searchable.

A curious point about Mt Penny EL is the Obeid family and their connections bought land there in 2007-2008 well before the EL grant. In normal mineral exploration this is putting the cart before the horse, you get the EL first, buying land comes later if you are lucky enough to prove up payable reserves.

There must be hundreds of media articles online now that can be easily searched for; this April 2012 SMH article by Kate McClymont covers a broad sweep of the issues very well. “And on that farm he had some mates

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Basics of the importance of mineral exploration to the New South Wales economy

In Australia the States (or Crown) own the vast majority of mineral rights – farmers and graziers own or lease surface rights. The States licence competent exploration companies to explore for minerals, coal, oil and gas.
There are strict conditions on explorers and large cash bonds have to be posted to ensure compliance.  The aim should be that the mineral wealth of the State is explored for diligently and any mining opportunities discovered are exploited to benefit the entire economy – all with a minimum of environmental impacts. There are long established laws protecting the rights of landowners and occupiers while exploration companies access their lands.
Minerals are worth about $20Billion per year to the NSW economy – most from coal – and mining operations occupy a very tiny area of the State – while agriculture occupies vast areas but the income generated is less than $10Billion per year.

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An “off the cuff” account from a small mineral exploration company at the front lines of mineral exploration in New South Wales

I have started this blog to discuss issues around mineral exploration in New South Wales, thats in Australia. Mineral exploration in Australia is controlled by State Governments – I doubt other States (or the Northern Territory) are very different from NSW. Many people are telling me they are concerned by unnecessary red & green tape adding serious costs and delays to their work. Late last year I was sent in this account of the bureaucratic process being entered into by a small company putting precious investment dollars on the line trying to explore for uranium in NSW. Continue reading

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