Navigating the Mining Approvals Process
Posted: 03/01/2011 12:00:00 AM EST | 0
The mining industry is entering what some are terming a second boom period. Rapid economic growth in Asia – particularly China, Latin America and Eastern Europe is fuelling demand for commodities.
This demand comes with a number of challenges as the landscape surrounding the mining industry shifts, according to the 2011 trends report by Deloitte.
If mining firms are to take advantage of these opportunities they will have to receive project approval in the face of more stringent regulations.
Change of Policy
New governments – in the UK and Australia in particular – mean those submitting mining approvals are having to brace themselves for impending changes in policy.
One example that illustrates these potential issues is the release of the Strategic Regional Land Use Policy by the New South Wales Coalition, which is expected to enter power in the state elections which take place in March.
The policy introduces a new impact assessment to determine how mining projects will affect agricultural lands. Duncan Gay, shadow minister for primary industries and energy, told ABC: "On strategic lands, approvals will not be granted where there will be a detrimental effect on the agricultural production of the land and the associated water resources."
Also included is the proposals is an audit of the state-wide exploration licences and the decision that communities will have a greater input into the decision to grant approvals or not.
Although the plans have been largely welcomed by the NSW Minerals Council, which said the "minerals sector has been looking for leadership for a long time", it claimed the rules regarding agricultural land could damage those currently seeking approval.
Chief executive officer Dr Nikki Williams said: "This changes the rules mid-stream for anyone currently preparing a proposal for a mining project... Decisions about any development area and should be made on a case-by-case basis and that's why we can't support a one-size-fits all approach."
These are just a flavour of the changing government policies which could affect approvals in the coming months. Deloitte also predicts new taxes, nationalistic claims, as well as an increasing focus on the environment, will be among the issues felt by the industry.
Environmental and Social Issues
Environmental issues are being given increasing prominence by authorities, as Cape Alumina Limited discovered late last year when it was forced to cancel its Pisolite Hills development after environmental regulations imposed led it to claim the project was no longer viable.
A revised project proposal submitted by the company showed the amount of bauxite which could be mined has decreased by 45 percent due to buffer zones implemented to protect preservation areas within the Wild Rivers region.
"The decision that we've been forced to make today, as a result of wild rivers (laws), has taken away what we thought we had, which was the right to develop our mining operations in that part of the world unimpeded, and that's changed," he said.
Queensland Premier Anna Bligh's comments after the incident perhaps signal how authorities are clamping down on mining operations in the name of the environment.
"A mining approval is not a right. For any mining company you have to satisfy the environmental requirements... That's appropriate," she said.
The increasing impact of environmental regulations is not specific to Queensland, however, or indeed protected areas.
"While not targeted directly at the mining industry, legislative requirements that continue to mandate the reduction in greenhouse gas emissions, water consumption and energy use ultimately will have an out-sized impact on a range of traditional mining activities," Deloitte stated.
Further to this, Deloitte predicted social issues are going to become increasingly important in planning projects.
Companies will have to increasingly engage with non-governmental bodies and local communities to create a sustainable project which will avoid issues later down the line.
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