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Annual Report 2010-2011

Published: December, 2011

Output 3.3 Mining

he mining industry is a significant part of the Northern Territory economy, with the value of mineral production worth more than $3 billion annually. Mining operations on Aboriginal land account for much of that mineral production.

The CLC region contains one of the most productive gold mines in Australia, located in the Tanami Desert some 500 kilometres north-west of Alice Springs. Also, the Northern Territory’s only on-shore oil and gas production occurs at Palm Valley and Mereenie west of Alice Springs. All these sites operate under agreements made by the CLC on behalf of traditional Aboriginal owners, with the first agreement signed in 1981.
The agreements reached under the Land Rights Act provide for positive outcomes to traditional Aboriginal owners - interests in land are protected and benefits include compensation payments, employment, training, sacred site protection, environmental protection and cultural awareness.
The right of traditional Aboriginal owners to control access to their land is a prime consideration for the CLC when negotiating with exploration companies requesting access to Aboriginal land. Under the Land Rights Act, the CLC must ensure that traditional Aboriginal owners are fully informed when making decisions over exploration and mining. Agreements can be entered into only where there is informed group consent. Adherence to the legislative process results in certainty to both Aboriginal people and proponents.

Exploration Licence Applications (ELAs and EPAs)

Exploration for minerals and petroleum is regulated under the Northern Territory’s Mining and Petroleum Acts. Exploration licences (ELs) allow the holder/operator to explore for minerals over the area of the licence. Exploration permits (EPs) generally cover much larger areas and are required for oil and gas exploration. A recent addition to mineral/petroleum tenure is the new Geothermal Exploration Permit (GEP) under the NT Geothermal Energy Act.
On Aboriginal land, exploration licences and permits can only be granted with the CLC’s consent. The mining provisions (Part IV) of the Land Rights Act set out a clear process for accessing Aboriginal land. The Northern Territory Mining Minister initiates the process by consenting to exploration applicants entering into negotiation with the CLC. Applicants then have three months to lodge an application with the CLC for its consent to the grant.
In response, the CLC organises meetings to consult the relevant traditional Aboriginal owners and ascertain their views. The applicant is entitled to present their exploration proposals to traditional Aboriginal owners at the first meeting. A representative of the Minister can also attend this part of the meeting.
Where instructed, the CLC negotiates an agreement over the terms and conditions of the grant. Through this process the rights and interests of traditional Aboriginal owners are protected, and once a decision is made, the applicants have the certainty required for a substantial exploration investment.
Where consent to exploration is given, the traditional Aboriginal owners cannot refuse any subsequent mining. A mining agreement must be made to allow mining to proceed. Mining generally involves substantial environmental impacts and can affect neighbouring communities.
The decision, therefore, that traditional Aboriginal owners are required to make at the exploration application stage is quite onerous. This is at the earliest point in the development process, when the least information is available on the nature of any possible development. The CLC’s statutory obligation is to ensure traditional Aboriginal owners are informed as far as practicable when making such decisions. Where an exploration agreement is made, the CLC must be satisfied that traditional Aboriginal owners understand the nature and purpose of the agreement and,
as a group, consent to it.

The CLC organises and conducts exploration and mining consultation meetings to ensure that the relevant traditional Aboriginal owners of land affected by applications are able to exercise their rights under the Land Rights Act. Table 1 shows recent data for the processing of applications.


In the 2010-2011 year, many resources were focussed on exploration consultations to maximise the rate of processing of licences and permits. Seventeen traditional owner consultation meetings were conducted with a total of 145 individual exploration titles considered, compared with 102 at 20 meetings in 2009-2010.


This sets a record for title processing, despite rainfall interruptions, and represents a further increase over the excellent results from the previous two years. In a
three-year period, this is by far the highest number of exploration titles the CLC has consulted over compared with any period in its
37-year history. Of the 145 titles for 2010-2011, 115 were discussed for the first time – an increase on the previous year’s performance (85 in 2009-2010) and another record for CLC (refer Table 2).
Meetings were held at communities and outstations across all CLC regions, including at Emu Bore near Nyirripi, Atitjere, Willowra, Jarra Jarra, Tennant Creek, Kalkarindji, Papunya, Harts Range, Yuendumu, Ti-Tree, Docker River and Lajamanu. Consultation meetings also took place in Kalka and Wingelina in Western Australia and Amata in South Australia. Achieving this number of remote area meetings takes careful planning and many resources.


These meetings can involve several mining companies, various mineral commodities, numerous Aboriginal traditional owner groups and cover many thousands of square kilometres of land. The successful packaging of tenements at meetings is a complex process, dependent upon many factors including the number of traditional owner groups, whether it is appropriate to bring groups together, the number of companies, the ability of companies to progress negotiations and the availability of the necessary CLC resources (staff, vehicles) to bring the meeting together.
Table 2 shows the numbers of exploration titles processed by the CLC and includes both ELs and EPs. Applications for consent to the grant of 121 exploration licences and exploration permits were received.


The high interest in exploration on Aboriginal land is largely due to sustained demand for mineral and energy commodities along with a continuing high gold price. The oil price and interest in uranium remained strong during the year and the price of gold increased in response to the economic uncertainty. In addition, the world price of phosphate has increased, making areas of Aboriginal land adjacent to known and
substantial phosphate deposits in the Barkly region attractive. Previously these deposits were considered uneconomic.
The NT Department of Resources continued to promote the mineral prospectivity of the Northern Territory, especially to Chinese investors. These activities together with new geoscientific data from the Northern Territory Geological Survey have played a role in the increase in applications on Aboriginal land, particularly in the Arunta, Petermann and Amadeus geological regions.

The Australian Bureau of Statistics reported that the level of exploration activity in the NT reached a record level in 2009-2010 with nearly $150 million being spent.
As a result of consultations with traditional Aboriginal owners and successful negotiations with applicants, the CLC consented to 38 exploration licence applications covering some 8,432 square kilometres of Aboriginal land. This is a record number of CLC consents to grant resulting from negotiations reaching their conclusion as well as a record number of titles taken for meetings.
A large proportion of applications received continue to name uranium as a target commodity. The attitude of traditional Aboriginal owners across the CLC region to uranium remains mixed with many of the 31 exploration licences for uranium refused during the year.
For some meetings held in 2011 it was possible that anxiety about the Fukushima nuclear emergency in Japan was a factor. The power plant explosions that followed the February earthquake and tsunami caught many people’s attention and may have shifted particular attitudes about uranium.
Other traditional owner groups still felt comfortable with their understanding of the nuclear cycle, and gave instructions to consent to the grant of several uranium applications.

The graph below compares this years’ number of exploration licence applications both consented to and refused with previous year’s figures.
The average time for processing applications that were either consented or refused during this financial year, from the date the applications were received by the CLC is 2.1 years. This is shorter than last year’s average (2.8 years in 2009-10) and is largely consistent with the standard negotiating period of two field seasons (some 22 months) specified under the Act. Where necessary, extensions to the negotiating period are made by agreement between the parties. It is important to note however, that many of the applications which take years to conclude are hampered by applicants spending a great deal of time seeking joint venture partners as they are unable to undertake exploration in their own right. This delay has a significant impact on the average time for processing applications.

Overall for the year, the number of applications concluded remained less than the number of additional applications for consent. This has led to a further increase in the number of applications under negotiation at the end of the financial year, particularly given the record number of applications received, but at a reduced rate compared to previous years. As at 30 June 2011 there are 299 exploration licences under negotiation, compared to 298 at 30 June 2010. The graph below demonstrates the trends.
In order to reduce the number of exploration titles with the negotiating period open, the CLC has to process to conclusion more applications than it receives. The rate applications are received are outside the control of the CLC. Over the last five years the number of applications has been consistently high resulting in a corresponding steep rise in the number with the negotiating period open.
The CLC again processed a record number of applications to first (s.42 of the ALRA) meetings (115) in 2011. However, even with instructions to negotiate, some negotiations can take considerable time. Major companies like Deep Yellow, ABM Resources and Toro Energy have this year finalised several deeds, which led to an increase in the number of consent resolutions.
However, some applications have protracted negotiation periods due to the time needed to find joint venture partners, new companies coming to terms with the draft deeds, and changes to their funding or exploration priorities. Many factors can influence the completion of negotiations, including an uncertain economy.
2010-2011 saw significant advances in processing many applications over the remote and little-explored Petermann ALT region. This process began in May and June 2010 with major meetings at Mutitjulu and Docker River, and continued this year with a large meeting at Alpara and consultations at Kalka, Amata, Alice Springs, Docker River
and Wingelina. 
Some refusals of consentarose in 2010-2011 from the various Petermann meetings,
but a large area is now under active negotiation.
A similar packaging approach is underway for the large Lake Mackay ALT north of Kintore, with a major meeting at Emu Bore near Nyirripi in May 2011. A further large gathering at Kalkarindji in May 2011 saw 51 exploration applications in the west and north Tanami regions progressed.
The CLC will continue to process titles efficiently and endeavour to achieve a medium-term target of fewer than 200 exploration titles with negotiating period open.

Uranium and Other Commodities Information Meetings

Strong interest in uranium exploration continued although the uranium price eased from record highs of over $US100/pound to around $US50/pound. Of the exploration applications received by the CLC in 2010-2011, around 25 per cent were aimed at discovering uranium (previously this was as high as 95 per cent), along with a suite of other target metals and bulk commodities. These, combined with previous applications for uranium still represent a significant area sought for uranium exploration on Aboriginal land.
Proposals for uranium exploration, however, raise specific issues unique to uranium mining and the downstream supply chain. Traditional Aboriginal owners need to be aware of these in order to make fully informed decisions. Understanding that uranium mining in Australia remains a contentious and contested issue is important, as is knowledge of the unique properties of uranium and the implications radiation poses at the mine site. 
Provision of balanced information about uranium exploration and mining, radiation protection, the regulatory regime and the nuclear industry is fundamental to informed consent of traditional Aboriginal owners. Appropriate information about uranium and radiation to assist traditional Aboriginal owners in decision making is lacking, therefore the CLC continues to work toward developing and sourcing appropriate information and where there is opportunity, collaborating with different parties to improve the breadth of that information.
The CLC continued rolling out its uranium information strategy which aims to give affected Aboriginal communities and traditional Aboriginal owners  facts on uranium mining, radiation, and downstream processing and uses.  Fewer information meetings for uranium were held in 2011 although discussion took place at major traditional owner meetings where information and DVDs were
made available.
The uranium information strategy has been broadened to include information meetings on other commodities where traditional Aboriginal owners and communities have little experience. The same approach is taken as for uranium where the sessions are purely educational with no decisions being required of traditional Aboriginal owners on the day. An example is the community information sessions being conducted for large seismic programs in the region. Planning is underway for community information meetings on underground coal gasification proposed in the region.
The CLC continues to participate in the Indigenous Engagement Working Group under the Uranium Industry Framework which is a collaborative forum involving Commonwealth and State governments, industry and Indigenous organisations.  The CLC contributed to the development of a series of fact sheets about uranium exploring and mining for Indigenous communities soon to be released by the Australian Government.

Agreement Making and Implementation

Where agreements are entered into with mining companies the CLC assumes a range of obligations and responsibilities.
The agreements generally provide for, among other things, payments to traditional owners, procedures for the protection of sacred sites, work program approval and access permits, environmental protection and rehabilitation, Aboriginal employment, training and contracting, liaison, reporting and inspection.
Table 3 summarises the new and current exploration and mining agreements for the CLC including the total area of land involved under agreements for exploration.
As at 30 June 2011 the Central Land Council has 47 current exploration agreements in respect of 127 exploration titles including oil and gas permits.

 

The CLC also has 10 mining agreements relating to a total of 12 mineral leases or production licences for  operations at Tanami, the Granites, as well asA total of three new exploration agreements were finalised during the year, relating to a total of six exploration licences. The details are as follows.
An agreement was concluded with Deep Yellow for EL 25601 covering a portion of the Ahakeye Aboriginal land Trust. 
An agreement was concluded for EL 26625 in the north Tanami region on the Central Desert Aboriginal Land Trust with ERO Mining.
An agreement was signed with Giants Reef Exploration for four licences over the Warumungu Aboriginal Land Trust to the east of Tennant Creek township including EL 26787, EL 27408, EL 27537 and EL 27538.
It is worth noting that although CLC consented to a total of 38 titles covered by 10 agreements in the period, only three were able to be signed. Delays were a result of unusually wet weather causing traditional owner consultation meeting postponements, which in turn meant that the titles and agreements were not considered by the CLC Executive committee until late in the year. At 30 June 2011, these additional agreements were with the Commonwealth Minister for consideration prior to signing by the CLC. 

Tanami Mining Agreements

Newmont Tanami Operations mine gold ore from the Callie deposit, which is milled at the Granites, located 45 kilometres  to the east adjacent to the Tanami Road. This is one of Australia’s most productive gold mines.
Ongoing monitoring of the mining agreements occurred during the year including reporting on the tailings seepage interception system, the paste fill plant, the proposed construction of a new tailings storage facility and safety improvements to the Granites Airstrip.
Two meetings of the Granites Liaison Committee were held, in October 2010 and July 2011.
At these meetings Newmont also presented information regarding the proposed expansion of the mines through the development of a new deep hoisting shaft at the Callie and Auron ore bodies, extending the life of the mine to 2027. To date the Tanami Operations have produced approximately 7 million ounces of gold.
The Tanami Mine tenements, after a number of years in care and maintenance, were purchased by Tanami Gold in March 2010. Tanami Gold is conducting exploration activities to identify further resources adjacent to previously mined areas. A meeting of traditional owners was held in August 2010 where the company representatives were introduced and a presentation provided on the company’s objectives.

Mereenie Oil and Gas Field – Santos Ltd

The Mereenie Oil and Gas Field, operated by Santos is a mature project. For the last 20 years Mereenie has supplied gas to the NT Power and Water Corporation for use in providing electricity to major Northern Territory centres including Darwin.
While extensions to the gas supply contracts have been made, these ceased in 2010. Oil continues to be produced but the cessation of the gas contract has a major effect on payments received by traditional Aboriginal owners under the agreement.
A Liaison Committee meeting was held at Mereenie in April 2010 which provided traditional Aboriginal owners with updates on the field’s operation. The transition of the field from oil and gas to oil only and the impact on operations and financial arrangements was the main concern discussed. Santos continues to seek alternative markets for its gas.

Palm Valley Gas Field – Magellan Petroleum Ltd

A Liaison Committee meeting was held at Palm Valley Gas Plant on 18 August 2010. Traditional Aboriginal owners received an update from the company on the field activities and future gas contract. There have been no
new activities and the current
gas supply contract ends in January 2012. The company is seeking a further gas contract for 5 – 10 years to produce the remaining reserves.

Exploration Agreements - Minerals

Under existing exploration agreements various monitoring activities took place including liaison committee meetings and inspections of exploration work areas. The main monitoring activities undertaken in the reporting period are detailed below.
Emmerson Resources have a significant portfolio of tenements covering the old Tennant Creek Gold Field and have conducted extensive exploration over the past 24 months. The CLC has processed around 20 work programs during this period for drilling and the company reported its exploration outcomes to traditional Aboriginal owners in October 2010. 
Westgold Resources and Adelaide Exploration have been carrying out drilling activities to the south west of Tennant Creek for more than four years. Traditional Aboriginal owners met with Westgold in May 2011 to discuss exploration progress and the development of the gold/copper resource at Rover 1.  Westgold completed a scoping study in October 2010 and detailed feasibility and environmental studies are underway with a
view to developing the decline access to the deposit within the next 12 months.
Following three years of exploration, the partnership between Teck Australia and Kajeena Mining Company with respect to four large exploration licences over the Haasts Bluff ALT recently concluded.  The agreement and tenements
remain with Kajeena and CLC is waiting for advice as to future exploration activities.
AusQuest Limited holds three exploration licences over Atnetye Aboriginal Land Trust. The company employed a traditional Aboriginal owner as field assistant for the drilling program. Further drilling is planned for the second half of 2011.
Thundelarra Resources continues its activity exploring for uranium within the Ngalia Basin on Yuendumu, Ngalurtju and Yunkanjini Aboriginal Land Trusts.  The company has conducted regional geophysical surveys and is currently carrying out regional exploration drilling to assess uranium prospectivity. There are several other companies exploring for uranium in the Ngalia Basin on areas adjoining ALT where CLC has agreements including Energy Metals, Cauldron Energy and Royal Resources.
ABM embarked on a significant regional project in the Tanami, focused on Twin Bonanza, where a resource of some 1.6 million gold equivalent ounces has been discovered. Activity is also being carried out near the old Groundrush Mine to the northeast of Tanami Mine.  In May 2011 traditional Aboriginal owners attended a liaison committee meeting to discuss the future of the projects with the company.
Tanami Gold is also actively exploring the Tanami region through its Central Tanami Project which commenced in 2010 with its acquisition of
tenements from Newmont. 
Newmont continues its exploration efforts surrounding its Tanami operations and traditional owners received reports on the exploration activities during a Liaison Committee meeting in September 2010.
In June 2011 a liaison committee meeting was held for traditional Aboriginal owners to visit and inspect the small copper specimen mine held by Dehne McLaughlin under an agreement with the CLC. The mine has been in operation for four  years. The future plans for the mine and an application for a mineral claim over the workings were also discussed.
Other companies including Minemakers Australia Pty Ltd, Crossland Uranium, Arafura Resources, Cameco/Paladin, Energy Metals, Toro Energy, Texalta and Central Petroleum were all active on land under the native title regime, often adjoining Aboriginal land, where similar clearance and liaison procedures apply under agreements.

Petroleum

Central Petroleum continues with exploration for oil and gas on EP 115 on Haasts Bluff ALT.  Seismic acquisition was undertaken during 2008 – 2010 and drilling of Johnstone 1 and Surprise 1 oil wells followed near Kintore.  The drilling results indicated live oil discoveries however no flows to the surface were recorded.  Traditional Aboriginal owners visited the drilling of Johnstone 1 in September 2010 and inspected the drill pad for Surprise 1 as well as rehabilitated seismic lines and other infrastructure.
Central Petroleum also conducted further exploration on EP 93 following the discovery of a thick sequence of coal in the northern Simpson Desert (Pedirka Basin) which the company considers to have potential for underground coal gasification (UCG) which it
is actively promoting to international investors. 
Petrofrontier holds a major exploration permit portfolio over the southern Georgina Basin across pastoral lease and adjoining various parcels of Aboriginal land. Exploration has included extensive seismic acquisition over a distance of hundreds of kilometers and the company is currently working with the CLC on a further series of seismic programs and well development. 
Exploration techniques proposed by petroleum companies working on Aboriginal land include the controversial hydraulic fracturing or ‘fraccing’ process involving the creation of cracks in underground rock layers to increase the recovery and flow of gas and petroleum using water and sand under pressure and some chemicals. Information sessions with traditional Aboriginal owners are necessary to improve their level of understanding.

Government Liaison

The CLC seeks to work collaboratively with the Northern Territory Geological Survey although no work was proposed on Aboriginal land in the reporting period. The CLC’s Mining Unit staff attended the Annual Geoscience Exploration Seminar in Alice Springs hosted by the Northern Territory Geological Survey allowing officers to discuss work proposals for the forthcoming year.
In 2010 the CLC met with the Petroleum Division of the NT Department of Resources regarding the new Geothermal Act which commenced in December 2009. The Geothermal Act governs the rights to conduct activities for the exploration of geothermal energy resources and for the production of geothermal energy and related purposes.  The Aboriginal Land Rights Act however does not envisage geothermal energy which is a new energy possibility for the Northern Territory and indeed Australia. No applications for Geothermal Energy Permits on Aboriginal Land in the CLC region have been received to date.The changes to part 1V of the  mining provisions of the Aboriginal Land Rights (NT) Amendment Act 2006 which commenced on 1 July 2007 continue to assist  in the smooth  operation of the Act resulting in substantially less administration for the CLC.
The standard negotiating period is two field seasons (some 22 months) and extensions can be made between the parties.
As reported earlier the average time for processing applications is largely consistent with the negotiation period set in the Act. The CLC works cooperatively with the Northern Territory mining titles branch to administer exploration and mining titles on Aboriginal land. The NT  Mining Minister has been delegated many of the Commonwealth Minister’s functions. Officers from the NT’s  Department of Resources regularly attend the first meetings with traditional Aboriginal landowners over the exploration titles.