| 1.0 |
THE LEGISLATION |
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In 1991 the Resource Management Act 1991 (RMA) and the Crown Minerals Act 1991 (CMA) were enacted. The Mining Act 1971 was repealed however the transitional provisions of the CMA provide that existing licences and the rights under the earlier legislation continue in force. Consents under both the CMA and the RMA may be needed in order to undertake prospecting, exploration and mining. These are addressed below. Other legislation is also applicable such as the Health and Safety in Employment Act 1992 which addresses safety of an operation. |
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| 2.0 |
SUMMARY |
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In order to undertake any prospecting, exploration or mining in New Zealand an Applicant must first ascertain if the following consents are required: |
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| Type of Consent |
Prospecting |
Exploration |
Mining |
| 1 |
Minerals permit under CMA if Crown owned minerals |
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yes |
yes |
yes |
| 2 |
Minerals permit under CMA if private minerals |
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No |
No |
No |
| 3 |
Access Arrangement or private agreement with landowner & occupier |
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Sometimes Yes if DoC |
Yes |
Yes |
| 4 |
Land Use consent from District Council under RMA |
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Rarely |
Sometimes |
Generally |
| 5 |
Land Use consent from Regional Council under RMA |
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No |
Sometimes |
Generally |
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| 3.0 |
CROWN MINERALS ACT 1991 |
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The CMA covers the allocation of the Crowns mineral resources and royalties. In New Zealand all gold, silver, uranium and petroleum, existing in its natural state, is owned by the Crown by statute (often referred to as statute minerals), while other minerals including coal may be owned by either the Crown, the owner of the land or another party. The ownership of non-statute minerals depends on the year and manner in which the Crown disposed of the land. If the Crown owns the land this does not mean that the Crown will automatically own the minerals. Title searches are needed to ascertain the mineral ownership. Mineral ownership can be complicated. Mineral ownership is sometimes separated from the land in a separate deed.
All prospecting, exploration or mining for Crown owned minerals requires a permit under the CMA which are granted in accordance with a Minerals Programme that details the policies by which the CMA is administered. The 1996 Minerals Programme is being reviewed. There are regulations for forms, reporting and fees. |
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| 3.1 |
Types of Permits |
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There are three main types of permits. There is no maximum or minimum size for any of these permits. |
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| i. |
Prospecting Permits are for reconnaissance prospecting or minimum impact work including airborne and low-impact ground methods. A prospecting permit can be granted for up to two years and is able to be extended in duration for up to another 2 years if conditions are complied with. A prospecting permit can be granted over Crown and Private minerals. The annual fee payable is $3.50 per square kilometre (GST inclusive). |
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| ii. |
Exploration Permits are for identifying crown mineral occurrences and evaluating the feasibility of mining. Activities include geological, geophysical and geochemical surveys, drilling, bulk sampling and mine feasibility studies. An exploration permit can be granted for up to five years with the right of an extension of duration for up to another five years but this is subject to a 50% reduction of area unless special circumstances apply. The annual fee payable is $3.50 per hectare (GST inclusive). |
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Mining Permits are for extraction of crown minerals. The nature and extent of the mineral deposit must be detailed in any application. A mining permit can be granted for up to 40 years. The annual fee payable is $10.00 per ha (GST inclusive). Where production is valued at more than $100,000 pa the miner must pay the Crown a royalty of either 1% of sales revenue (ad valorem royalty or AVR) or 5% of profits (accounting profit royalty or APR), whichever is the greater in any given year. Where revenues are less than $1 million in any year only the AVR royalty applies. The royalties are being reviewed at Dec 2006. |
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| 3.2 |
Allocation of Permits |
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Under the current minerals programme permit applications are received in accordance with two main allocation methods: |
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| i. |
First acceptable work programme offer. This is a priority in time allocation and allows the first party who applies for a permit over a specific “open” area to have their application considered in priority to any applications over the same area, provided there is an acceptable work programme. |
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| ii. |
Subsequent permit application. This applies where an existing permit holder has a prospecting or exploration permit and wishes to proceed to the next level of permit over all or part of the same area and can justify its application with a suitable work programme and on the basis of results from work undertaken. |
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| 3.3 |
Processing of Permit Applications |
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A permit application is lodged with Crown Minerals, part of the Ministry of Economic Development. It is plotted by Ministry and checked for overlaps. Under the current minerals programme an application can only overlap a granted permit with the consent of that permit holder or mining privilege holder. An application can sit in second priority over another application. The Ministry assesses the application, its plan, description and its work programme and also forwards a copy of the application to local Iwi (Maori) as part of the Crown’s consultation.
If for exploration and mining for non statute minerals (eg copper) the applicant must also have the mineral ownership, plan and description approved by an accredited agent at the cost of the Applicant. The timing of the iwi consultation, obtaining of the agents report and internal assessment varies depending on current policy of the Ministry. Generally they run in parallel. The Ministry sets conditions on permits and if all matters are satisfied the Minister of Energy grants the permit. Other than the Iwi consultation, there is no public objection process under the CMA. |
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| 3.4 |
Access |
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The granting of a permit under the CMA does not grant the permit holder any rights of access to the land. A permit holder must obtain a written access arrangement from the land owner and occupier for all activities except those defined in the CMA as minimum impact activities over certain categories of land.
A permit holder can conduct "minimum impact activities" by either obtaining written consent of the owner and occupiers or alternatively giving at least 10 days notice in a prescribed manner. Some categories of land are excluded from this minimum impact approval including conservation land, land under crop, land situated near or used as a garden, stockyard, orchard, farm plantation and indigenous forest etc. In these special cases, and in the case of Maori Land, the land owner or the land occupier retains the right of veto over access for all activities including minimum impact activities and a written agreement must be obtained for all work on these special categories irrespective of the level of work.
As an example pine forests are considered to be land under crop so no minimum impact activities can be undertaken on such land without a written access arrangement with the land owner and land occupier. There is no right of arbitration to this unless the parties agree to an arbitrator being used.
Access Arrangements
As mentioned above, a written access arrangement with the land owner and occupier is needed in order to undertake more detailed exploration or mining or minimum impact activities on the special categories of land listed above. These are commercial agreements. There are various standard agreements in use but each needs to be modified to suit the permit holder, the land, the land owner and the land occupier. These contain conditions which may cover term, compensation, area of land covered, disputes, exploration activities and most also cover mining, with a lease clause, or right to purchase clause, depending on what the land owner and permit holder require. These can be registered against the land title.
Some access arrangements cover both the land owner and the land occupier. In other situations two agreements are needed. |
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| 4.0 |
RESOURCE MANAGEMENT ACT 1991 |
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The RMA sets out a series of restrictions on the use of land, the use of beds of lakes and rivers, the use of water and also relates to the discharge of contaminants into the environment. Generally, unless a rule in a relevant plan permits an activity, or an appropriate resource consent is held, the activity is not allowed. Where an application is required, it must be made to the appropriate consent authority.
Mining is treated no differently to other activities that have the same impact. The RMA applies to both private and Crown owned minerals. |
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| 4.1 |
Land Use consents from District Councils |
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District Councils deal with the use of the land and may or may not require land use consents to allow an Applicant to undertake a prospecting, exploration or mining activity. This depends on the rules in the relevant District Plan. Generally hand held minimum impact prospecting work on rural land does not require a land use consent. The same applies to exploration however mining often requires a land use consent. |
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| 4.2 |
Resource Consents from Regional Councils |
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Matters relating to water, the use of beds of rivers and lakes, and the discharge of contaminants to land, air or water may require a resource consents from the relevant Regional Council depending on the criteria set out in the Regional Plan. These include take water permits, water discharge permits, air discharge permits, coastal permits and land use consents for disturbance to the surface of the land. Again the low impact operations on rural land generally do not need resource consents but mining generally does. |
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| 4.3 |
Classification of Activities |
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All activities are classified into five groups: |
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Permitted |
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Controlled |
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Discretionary |
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Non complying |
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Prohibited |
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A permitted activity does not require a resource consent provided the activity complies in all respects with the relevant rules of the Plan. The RMA provides for resource consents to be obtained for activities other than permitted activities in accordance with rules and criteria specified in the Plan. These activities are controlled activities and discretionary activities.
The Act also empowers the District Council to require that a resource consent be obtained for an activity, which contravenes a rule in a plan, but is not a prohibited activity. This type of activity is a non-complying activity. No application may be made for, nor may the Council grant, a resource consent for a prohibited activity. |
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| 4.4 |
Consultation with Affected Parties |
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Prior to lodging a resource consent application an Applicant should consult all affected parties who may include the following: |
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Owners and Occupiers of the land |
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Adjacent land owners and occupiers |
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District and Regional Council |
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Local iwi groups |
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NZ Historic Places Trust |
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Department of Conservation |
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Fish and Game Council and others affected. |
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| 4.6 |
Notification vs Non Notification of Resource Consent Applications |
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Upon receipt of a resource consent application, the Council must ascertain whether it is to be notified or not. Controlled activities will generally be processed as non-notified but discretionary activities and non complying activities may require notification. The RMA has recently been amended to allow limited notification which will be of assistance to the mineral exploration industry.
Full notification results in the application being advertised in the local newspaper. Any person may make a submission in support of or opposition to a resource consent application that is notified within 20 working days from the date of advertising.
To support a case for non notification of an application the Applicant needs to satisfy the Council that the adverse effects on the environment of the proposed activity will be minor, and provide the Council with written approval from every person the Council considers may be adversely affected by the granting of the consent unless the Council considers it is unreasonable in the circumstances to require the obtaining of every such consent. Generally written approval from the landowner is sufficient for low impact operations. |
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| 4.7 |
Joint Resource Consent Applications |
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Where resource consents are required from both the District Council and the Regional Council these should be lodged at the same time and if notification is required one Council will take on the role of lead agency and advertise both applications together. If Council hearings are required these become Joint Hearings. Sometimes one agency may decide on notification and the other may process the application as non-notified however generally they will liaise with each other.
If appeals are lodged against the application(s) these are heard by the Environment Court. |
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| 5.0 |
MISCELLANEOUS INFORMATION |
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The Ministry operates an open file report system. All results of work undertaken on a permit become open file after five years or when a permit is relinquished. These reports can be viewed on the Ministry’s web site www.crownminerals.govt.nz. |