LAND ACCESS / LAND AQUISITION
There is no law which states you have to sell your land to a mine operator or that a mine operator has to purchase your land from you. However, it may be a condition of the development consent (planning approval) granted for a mine that the operator must buy your land if it is affected, and if you require it. This section overviews land acquisition and compensation at the Mining or Production stage.
Land acquisition for mining
You can be faced with difficult decisions about whether to sell your land to a mine operator when a mine is approved for development in your area which will impact on your land, livelihood or lifestyle.
There is no law which says that a mine operator must purchase your land or that you have to sell your land to a miner.
However, it can be a condition of the development consent (planning approval) for a mine that the mine operator buys your land if the land is affected by the mine operations, and if you require it. Land likely to be affected by mine operations is generally identified during the environmental assessment stage. This land might be affected by noise, dust, fugitive lighting, blasting, subsidence or access routes to a mine.[i]
A mine operator might also be required to acquire land as a biodiversity offset to mitigate the environmental impacts of a mine.
When a mine operator wants to buy your land
If a mine operator wants to buy the whole of your land it will usually seek to negotiate a settlement with you, and you and the mine operator can agree any price for the land. The mine operator will usually want to complete the negotiations and purchase early in the planning stages of the mine so it has commercial certainty and control.
In this case, the experience of valuers involved in land acquisition for mining is that the mine operator will generally pay a premium of 50% to 250% above the market value.
The premium over market value that a mine operator might pay for your land can be impacted by:
the strategic importance of your land to the mine including factors such as the proximity of your land to the proposed mining operations and mineral resource, and whether the land is required for environmental offset or for the construction of mine-related infrastructure
the length of time you have owned the land and your connection to it
your relocation and reinstatement costs including professional fees, stamp duty on an alternative property of equal value, travelling and time allowance to find an alternative property and removal costs, and
the potential to replace the existing use of the land.
When a mine operator is required to buy your land
If it is a condition of the development consent that a mine operator purchase your land if you require it, then the terms of the consent may set out the valuation method to be applied, or could leave it up to you and the mine operator to negotiate a settlement.
As well as for the value of the land, a development consent may also require a mine operator to pay you compensation for any loss suffered as a result of the sale, for example for your legal and relocation costs.
Should you and the mine operator not be able to agree on the value of your land or the compensation payable, then you or the mine operator could apply to the Land and Environment Court to determine the amount. The court’s determination would be based on the expert evidence of valuers for both you and the mine operator.
Compensation for the loss of part of your land
If a mine operator only wants to acquire part of your land then you could reach agreement with the mine operator on the value of that land and the compensation payable.
However, if you cannot agree on the value of the land then part 13 of the Mining Act 1992 would apply. Part 13 of the Mining Act 1992 deals with the assessment of compensation payable for a ‘compensable loss’ suffered by you as a result of the mine operations.
Under section 262 of the Act, ‘compensable loss’ means loss caused by or likely to be caused by:
‘damage to the surface of land, to crops, trees, grasses or other vegetation (including fruit and vegetables) or to buildings, structures or works, being damage which has been caused by or which may arise from prospecting or mining operations, or
deprivation of the possession or of the use of the surface of land or any part of the surface, or
severance of land from other land of the landholder, or
surface rights of way and easements, or
destruction or loss of, or injury to, disturbance of or interference with, stock, or
damage consequential to any matter referred to in paragraph (a)-(e),
but does not include loss that is compensable under the Mine Subsidence Compensation Act 1961.’
Section 269 of the Mining Act 1992 extends compensable loss to also include loss caused by, or likely to be caused by:
interference with the use of land, or
damage to land, to any crops, trees, grasses or other vegetation on the land or to any buildings, structures and works on the land, or
damage consequential to any matter referred to in paragraph (a) or (b),
but does not include loss that is compensable under the Mine Subsidence Compensation Act 1961.
Compensation under part 13 of the Mining Act 1992 would also be payable to any secondary landholder which suffered a loss. A secondary landholder can include a lessee or a share farmer.
In the case of any claim for compensation for compensable loss under part 13 of the Mining Act 1992, the law only requires a mine operator to pay you the market value of your land and buildings, structures and works situated on the land.[ii]
Before negotiating the sale of your land to a mine operator, it is reccomended you seek independent legal and valuation advice. You could seek to negotiate with the mine operator for those costs to be compensated.
Land acquisition for coal seam gas production
Because of the broad scale nature of coal seam gas production it is unlikely a coal seam gas operator will offer to buy your land.
However, there have been instances in Queensland where coal seam gas operators have purchased the land of farmers affected by operations.[iii]
If you are approached by a coal seam gas operator to purchase your land it is reccomended you obtain independent legal and valuation advice before negotiating the sale of your land.
NSW Government Voluntary Land Acquisition and Mitigation Policy
In December 2014 the NSW Government introduced a Voluntary Land Acquisition and Mitigation Policy.[iv]
The Policy is to be applied by consent authorities (such as a Joint Regional Planning Panel or the Planning Assessment Commission) when assessing and determining development applications (and applications for a modification of a development consent) for State Significant Development mining, petroleum, and extractive industry developments where the development is or is proposed to be on private land.
The policy sets out the general approach to be taken by consent authorities in relation to noise and dust impacts and conditions on development consents relating to the mitigation of those impacts or to land acquisition.
[i] Opteon The Mining Industry in NSW – the role of the valuer (July 2012).
[ii] Mining Act 1992 (NSW) s 272.
[iii] Herald Sun ‘Tara gone with the wind of big CSG buyout by gas giant QGC’ (4 August 2014).
[iv] NSW Government Voluntary Land Acquisition and Mitigation Policy (15 December 2014).