Mining Terminology

Annual Environmental Report +

The DMP Minerals Environment Branch requires all Mining Tenements to have an Annual Environmental Report (AER) submitted each year. The AER should provide a concise outline of the project operations, mine site environmental management and rehabilitation work undertaken in the previous 12 months and the proposed operations, environmental management plans and rehabilitation programs for the next 12 months.

Caveat +

Mining Act Section 121

A caveat is a legal notice that certain actions may not be taken without informing the person who lodged the notice.

Caveats are lodged to protect clients interest in tenements, they must prove a connection to tenement i.e. sale agreement, royalty agreement, mortgage held. You cannot lodge a caveat for non-payment of services.

If caveated tenement is surrendered a registered post letter is sent by Department of Mines and Petroleum (DMP) advising caveator of surrender and giving 14 days notice. If letter is sent objecting to surrender quoting Section 122E(c)(ii) of the Mining Act within 14 day period the surrender will be rejected, referred to as an absolute surrender.

Combined Reports +

The holder(s) of, or agent for, a group of granted tenements may apply for Ministerial approval, in accordance with Section 115A(4), to submit one combined annual mineral exploration report on a common date for a group of two or more contiguous (or nearly contiguous) tenements that are being worked in a common exploration program.

Conversion +

The process of changing mining tenure from one tenement type to another. Usually between Prospecting Licences and Mining Leases, and vice versa, but can also include Exploration Licences. Land area considerations and expenditure and are the common reasons for tenement conversion.

DMP +

Department of Mines and Petroleum - West Australian government department responsible for the regulation of these extractive industries www.dmp.wa.gov.au

Exemption from Drop-off of Exploration Licences +

The principle of the compulsory drop-off provision at the end of years 3 and 4 for pre 10 February 2006 licences and for 6th year deferrals for post 10 February 2006 licences is that the holder will have conducted exploration so as to identify areas of interest and is able to relinquish the balance of the ground.
Exemption from the requirement to drop-off ground is provided for those cases where the holder, for specified reasons is unable to conduct or complete planned exploration programs. The onus is on the holder to provide evidence to support the applications.

Expenditure Exemption +

An application for a certificate of exemption under section 102 shall be made in the form No. 18 in the First Schedule and lodged at the office of the mining registrar with the prescribed fee

Reasons for Exemption
Under Section 102(2) exemption may be granted on a mining tenement for the following reasons:

  1. Title is in dispute
  2. Time is required to evaluate work done, plan future exploration or mining or raise capital therefore:
  3. Time is required to purchase and erect plant and machinery
  4. The ground is for any sufficient reason unworkable
  5. The ground contains a mineral deposit which is uneconomic but which may reasonably be expected to become economic in the future or that at the relevant time economic or marketing problems are such as not to make the mining operation viable;
  6. The ground contains mineral ore which is required to sustain the future operations of an existing or proposed mining operation
  7. Political, environmental or other difficulties in obtaining requisite approvals prevent mining or restrict it in a manner that is, or subject to conditions that are, for the time being impracticable: or
  8. Is comprised within a project involving more than one tenement and that expenditure on a tenement or tenements comprised in that project would have been such as to satisfy the expenditure requirements in relation to the tenement concerned had that aggregate expenditure been apportioned in respect of the various tenements comprised in this project.

Under Section 102(3) the Minister for Mines may grant an exemption for any other reason other than those set out above which, in his opinion, is sufficient to justify exemption. Details to support an exemption under this section must accompany the application.

Expenditure Reports +

Refer Mining Regulation 22
After tenement has been granted for 1 year an Expenditure Report (Form 5) is required to be submitted to Department of Mines and Petroleum (DMP) every year thereafter.

The reports required under section 68(3) shall be a report on operations on the mining tenement in the form No. 5 in the First Schedule to be filed -
(a) within 60 days after each anniversary date of the commencement of the term of the licence or within any extension of that period under subregulation (1a); and
(b) within 60 days after the surrender, forfeiture, expiry or other cancellation of the licence or within any extension of that period under subregulation (1a).

    Type of activities which may be claimed for expenditure is as follows:
  • Geological activities: geological mapping, sampling, drilling supervision, core logging, non-core drill-sample logging, geological data processing and interpretation, petrology, planning of exploration programs, report preparation; where appropriate, general prospecting can be added here.
  • Geochemical activities: geochemical sampling, analysis of surface geochemical samples or subsurface drilling samples, geochemical data processing and interpretation. ALSO show number of samples collected.
  • Geophysical activities (surface/subsurface): ground geophysical surveys, downhole logging, geophysical data processing and interpretation.
  • Airborne geophysical activities: aerial survey costs, geophysical data processing and interpretation.
  • Remote sensing activities: aerial photography, remote sensing images, photo interpretation, image processing and interpretation.
  • Mineralogical activities: (exploration for diamonds, heavy mineral sands, etc.): bulk sampling, mineral separation, mineralogy and analysis of diamond indicator minerals or other minerals.
  • Surveying activities: gridding, line clearing, grid tie-in, tenement boundaries, etc.
  • Core drilling: diamond drilling costs (including pre-collar open-hole non-core drilling), access road and drill-site preparation; ALSO show metres drilled and number of holes completed.
  • Non-core drilling: drilling costs, access road preparation; ALSO show metres drilled and number of holes completed. Costs for deep geochemical sampling by auger or air-core drilling can also be shown here. (N.B. Specify drilling for groundwater supply.)
  • Costeaning: plant and equipment hire for trenching and bulk sampling.
  • Field supplies: exploration equipment, consumables and supplies, plant and equipment hire, fuel, oil, etc., depreciation of direct exploration equipment, wages for non-professional field personnel.
  • Drafting activities: drafting equipment, consumables and supplies, salaries for drafting personnel
  • Travel: travel costs directly associated with mineral exploration activities conducted on the tenement.
  • Field camp activities: establishment and maintenance of exploration base camps, food and accommodation, vehicle costs, contractor helicopter support
  • Environmental: environmental studies
  • Feasibility study activities:
  • Rehabilitation activities:
  • Aboriginal Heritage Survey:

Exploration Licence +

An exploration licence permits exploration over a much larger area of land for a much longer period than a prospecting licence. The holder of an exploration licence is authorized to enter land for the purpose of exploration for minerals with employees and contractors and such vehicles, machinery and equipment as may be necessary or expedient. It permits exploration for minerals and the undertaking of operations and works necessary for that purpose including digging pits, trenches and holes and sinking bores and tunnelling.
An exploration licence holder may excavate, extract or remove earth, soil, rock, stone, fluid or mineral bearing substances not exceeding a prescribed amount (a total of 1000 tonnes over the term of the licence) or such greater amount as the Minister may approve. The taking of a greater amount without approval renders the licence subject to forfeiture.

Extension of Term of Exploration Licence +

Under Section 61(2) of the Mining Act the holder of an Exploration Licence may apply to the Minister to extend the term of the licence beyond its initial 5 year term if satisfied that a prescribed ground under Regulation 23AB of the Regulations exist. Section 61(3) keeps the licence in force until an extension application is determined.

Forfeiture Notices +

Tenements get listed for forfeiture when they are late meeting compliance i.e. paying rent on time, lodging expenditure reports late, not lodging mineral exploration reports etc.

For the first two offences the Warden is likely to impose a fine but the third offence is likely to have tenement forfeited.

The fines imposed by the Warden are quite substantial and are multiplied by how many days late the reports were lodged.
Forfeiture action affecting Mining Leases and Exploration Licences are listed before the Chief Warden in Perth to recommend either fine or forfeit.
The Chief Warden hears the matter then makes a recommendation which is then forwarded to the Minister for Mines and Petroleum to make a final decision.
The Minister assesses the recommendation and considers the interests of the state then decides if and when Mining Leases and Exploration Licences are to be fined or forfeited, should the Minister decide to forfeit, the forfeiture list is published in the Government gazette and placed on notice boards in Mining Registrar offices around the state.
The compliance date listed against a tenement under forfeiture is not necessarily the date action will be taken, the decision making process can take months depending on the information given to the compliance team to evaluate.

Forfeiture Notices - Prospecting tenements +

Unlike other forfeiture hearings for Prospecting Licences and Miscellaneous Licences which are heard and determined by the Warden for same Mineral Field in open court, Warden at that time determines to either fine or forfeit and in the case of forfeiture Warden nominates a time and date for the forfeiture to be affected. Essentially anyone in open court would hear the result, which is then put on the notice board including the determination as read out in open court that nominates the time and date for the action to be effected.

Mining Lease +

Refer Mining Regulation 24

  • A mining lease is the appropriate tenement for the development of and production from, an ore body discovered by prospecting or exploration.
  • The maximum area for a mining lease applied for before 10/02/2006 is 1000 hectares. After then, the size applied for is to relate to an identified orebody as well as an area for infrastructure requirements.
  • Mining leases must be marked out
  • Application must be lodged within 10 days of marking out.
  • Application is made to the Mining Registrar of any DMP Office
  • An application fee and rental is payable

Pursuant to section 74(1)(ca) an application for a mining lease shall be accompanied by a mining proposal OR a statement in accordance with subsection (1a) and a mineralisation report that has been prepared by a qualified person. The statement under subsection (1a) shall set out information regarding the mining operation likely to be carried out including:

  • When mining is likely to commence
  • The most likely method of mining; and The location, and the area, of land that is likely to be required for the operation of the plant, machinery and equipment and for the other activities associated with those mining operations

Native Title Advertising Notification +

Prior to a tenement being granted the DMP Tenure and Native Title branch will send out a Native Title Advertising Notification, once the 4 month objection period is closed and no objections have been received the tenement will be granted straight away.

Partial Surrender of Exploration Licence +

At the end of both the third and fourth year of its term, the licensee is required to surrender 50% of the licence. For a licence applied for and granted after 10.02.2006, the surrender requirement is 40% at the end of the sixth year if tenement is renewed.

Rates +

Council rates are a contribution each ratepayer makes towards the cost of providing facilities and services to the community.

  • Mining Tenements are rateable and are raised from the first day of each financial year. ie from 1st July each year. Therefore rates notices are usually issued sometime after the middle of the calendar year for annual rates.
  • Rate notices are issued by local Shires and Councils.
  • Most mining tenements are subject to rates except for Prospecting leases of 10 hectares or less which are not rateable.
  • When rates are fully paid for the whole financial year, from 1st July to 30th June, and the tenement is withdrawn or expires during that time any monies paid from date of death to 30th June are refunded or credit given.
  • Interim rate notices can be issued any time during the calendar year. eg if a tenement is granted after the date annual rate notices are issued and also if a tenement’s value has increased or decreased since the initial rate notice was issued.
  • Rates must be paid before the due date or penalty interest is charged. Non payment of rates can then proceed to debt recovery action.

Rent +

All live tenements must pay rent yearly to Department of Mines and Petroleum (DMP). They allow 30 days to pay from anniversary of tenement. Failure to pay rent can result in the tenement being forfeited. Rent can be paid by mail returning a cheque with the bottom portion of the rent notice, over the counter at a DMP mining registrar office, or online via credit card at www.dmp.wa.gov.au