Mineral and petroleum resources are owned either by the Commonwealth Government or the state/territory governments. The Commonwealth Government owns resources found outside the first three nautical miles from the territorial sea baseline (referred to as 'beyond coastal waters’). The state and territory governments own resources found onshore and out to three nautical miles from the baseline (referred to as 'coastal waters’).
The Commonwealth Government is responsible for setting national policy, including fiscal, monetary and taxation policy and foreign investment policy.
State and territory government responsibilities include managing and allocating mineral and petroleum property rights, land administration, and regulation of operations (including environmental, and occupational health and safety).
Exploration and mining licences
State and territory governments are responsible for the granting and administration of exploration and mining licences. An exploration licence authorises the exploration phase of a project and confers exclusive rights to the exploration for and the recovery of mineral or petroleum samples from the licence area. A mining licence covers the commercial mining phase of a project and authorises the exploration for and full recovery of minerals from the licence area. A retention licence is an intermediate form of tenure, designed to ensure the retention of rights pending the transition of a project from the exploration phase to the commercial mining phase.
Mineral and petroleum royalties
Royalties are collected by state and territory governments for mining onshore and up to three nautical miles offshore, and by the Commonwealth Government outside that area. The basis of the mineral royalties varies between states and between commodities.
Onshore and within coastal waters, royalties are levied on petroleum production. Petroleum produced in offshore areas of Australia (but not including the North West Shelf) is generally subject to an offshore Petroleum Resource Rent Tax levied by the Commonwealth. This is in addition to income tax payments. State petroleum royalties and Commonwealth crude oil excise apply onshore in coastal waters. Commonwealth petroleum royalties and crude oil excise apply to the North West Shelf project.
Native title was first recognised in Australia by the High Court of Australia in 1992. In a historic decision (Mabo (no. 2)), the Court decided that the common law of Australia recognises a form of native land title which exists in accordance with the laws and customs of Indigenous people where:
- those people have maintained their traditional connection with the land
The Native Title Act (NTA) commenced on 1 January 1994, and in 1998 the Federal Parliament passed a comprehensive package of amendments which commenced on 30 September 1998. On land where native title may exist, applicants for exploration and mining titles are required to undertake formal negotiations or consultations with native title holders or native title claimants who have registered a claim over the area. This process needs to be undertaken before the exploration permit or mining title is granted. The negotiations relate to seeking agreement with the native title parties on the activities to be pursued.
The NTA enables the state and territories to establish their own Commonwealth-accredited regimes to address native title requirements, provided that the legislation is consistent with the requirements of the NTA. It also enables the parties concerned in any native title claim to negotiate voluntary but legally binding agreements, called Indigenous Land Use Agreements, as a flexible means of resolving native title claims in exploration or mining.
- their title has not been extinguished by a law or other action of government (such as a grant of a freehold title).