Minister for Resources and Energy Chris Hartcher said the audit would involve a desktop analysis of existing licences to identify areas of noncompliance and to uncover any hidden discoveries.
“Inconsistencies or noncompliance may require the licence holder to provide any necessary additional information and may prompt further examination,” Hartcher said.
“Further investigations of specific licences may also be warranted.
“This is an important step in ensuring transparency and proper process in the award and application of exploration licences.
“The full audit process is expected to be completed by November this year.”
Hartcher also announced a steering committee to develop a revised fees structure to remove major cash payments for exploration licences.
Project-related fees will only be paid where the project passes stringent assessment requirements and obtains a mining licence.
NSW Minerals Council deputy CEO Sue-Ern Tan said the minerals industry was not afraid of transparency.
“Explorers report annually to the NSW government on how they are performing against their exploration licence requirements, including details of their activities during the year and the results of their exploration program,” Tan said.
“Exploration licence holders have a wide range of conditions that they must comply with, covering environmental management, geological reporting, and land access.
“When licences are renewed, explorers have to justify the renewal with detailed information about their work and results to date, and the work that they have planned.
“All of these reports are reviewed by the government to assess exploration progress.”
The government already had the ability to cancel an exploration licence if licence conditions were not being met, Tan said
“There are legitimate reasons why planned exploration activities may be delayed.
“For example, there may be unforseen delays in getting access to finance, equipment, or in reaching land access agreements with landholders.
“Delays such as these do not mean that an explorer is ‘sitting on’ their licence and do not indicate that an explorer is ‘hiding’ a discovery.”
The new framework will also examine the applicant’s ability to develop the mine, economic credentials to carry out exploration activity and sustain the potential mining project over the life of the mine, and the proximity of existing licence holders and operators.
“Under the former Labor government, the community rightly felt that fair process was at risk with hundreds of millions of dollars demanded at the exploration stage,” Hartcher said.
“We are now working to implement a system where fees paid will be based on a predetermined ‘Schedule of Fees’ and based on the scale and tonnage of the approved mine.
“Exploration licences will only be granted based on predetermined criteria including the ability to implement best practice environmental standards, as well as safety performance and management.”
Hartcher said the NSW government would also consult with the community prior to the tender for a coal or coal seam gas exploration licence.
“We are committed to balancing the rights of landowners and the expectations of miners, but ultimately the community must be the first to hear about any exploration activity,” he said.
Tan said exploration licences did not permit mining, nor did they guarantee that a mining lease would be granted.
“If there is the potential for a mine to be developed, it must be assessed under the Environmental Planning and Assessment Act 1979,” she said.
“This involves a series of stages that normally take several years. Each proposal must be considered on its merits and there is no guarantee that approval will be granted.”
