Red tape reforms to assist mining industry in Victoria

The Victorian Government have announced a number of “red tape reforms” designed to reduce regulatory burdens on business in Victoria.

The mining industry will be impacted by four of these reforms:

  • Native vegetation offsetting on public land: Currently native vegetation offsets for private land clearing can be sourced only on private land. The government reform will allow native vegetation offsetting on public land, making it cheaper and easier for businesses to meet their native vegetation offsetting obligations.
  • Reduced rehabilitation bonds: Currently, rehabilitation bond requirements for mining licence or extractive industry work authority holders require the provision of 100% bonds upfront. Under the government’s reform, where the risk of default is low and additional liability to the Government is minimal, reduced rehabilitation bonds of up to 50% will be allowed during the start-up phase of new mining and quarrying projects. Further, as an alternative to bank guarantees, the government will accept a cash bond for individual bonds up to $10,000, reducing costs and barriers to entry.
  • Streamlining of the return of bonds for land rehabilitation: Currently, the process for the return of rehabilitation bonds in the mining sector is protracted. The government reform will simplify the bond return process to ensure that bonds are returned as soon as possible following the successful conclusion of landowner consultation.
  • Transition from paper-based to online administration of mining exploration licences: Currently, the administration of mining exploration licences is paper-based. The government reform will move mining application and reporting systems online. It will also enable online searches for existing licences and online applications for new licences.

While relatively limited in scope, these four regulatory reforms are likely to be welcomed by those involved in the energy and resources sectors in Victoria.

For further information, please contact Myra Stirling, Senior Associate or Liam Hickey, Solicitor, Melbourne, or your usual Herbert Smith Freehills contact.

Report of the Victorian Gas Market Taskforce released

The Victorian Gas Market Taskforce, which was led by former Howard Government Minister Peter Reith, has released its final report.

The Taskforce was commissioned by the former Victorian Premier, Ted Baillieu, in December 2012 to consider ways to improve the operation and efficiency of the east coast gas market, and increase gas supply.

The recommendations in the report support the development of the onshore gas industry in Victoria to increase gas production, in the context of the depletion of offshore gas reserves and projected increases in the price of gas.

Key recommendations

The report’s key recommendations include the lifting of the current ban on hydraulic fracking and the issue of further CSG exploration licences.

The report also recommends that a Gas Commissioner be appointed to promote community consultation and the dissemination of credible information about CSG, with a view to increasing community confidence in the CSG industry.

Further consultation

In releasing the report , Premier Denis Napthine said that this was the ‘first step in a consultative process to seek Victorians’ views on issues of concern in regard to onshore gas in Victoria’.

Feedback on the report is being sought until the end of March 2014, prior to a 12 month community consultation process to be facilitated by the Minister for Energy and Resources, Nicholas Kotsiras.

A report on the findings of this 2-stage consultation process is planned to be released in July 2015.

Ban on fracking to remain

Dr Napthine also announced that the ban on hydraulic fracking would remain in place until at least July 2015 while the consultation process was ongoing.

According to Dr Napthine, a key factor to be considered by the Victorian Government in relation to the development of the onshore gas industry is the impact to the water table and aquifers, and the Victorian Government would not support onshore gas production until there is scientific evidence showing that the industry would not risk Victoria’s assets.

The bottom line

While the Taskforce’s recommendations clearly support the development of the onshore gas industry in Victoria,  it is unlikely that there will be any movement towards the industry’s development until at least the second half of 2015.

For further information, please contact Myra StirlingSenior Associate, Brad Popple, Solicitor, Melbourne or your usual Herbert Smith Freehills contact.