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How does the permit system work: Restrictions on minerals and coal prospecting permits
Why the statutory restriction?
Minerals Programme for Minerals
Introduction
The Crown Minerals Act 1991 provides for three types of permit, prospecting, exploration and mining. Prospecting permits allow for less intensive work programmes but section 28 of the Crown Minerals Act 1991 places a restriction when a prospecting permit should be granted.
How to apply section 28 of the Crown Minerals Act 1991 when dealing with prospecting permit applications can cause discussion and conflict. There is a balance to be maintained that meets the needs of the Crown, as a mineral owner on behalf of all New Zealanders, and the needs of the exploration company who is making an investment in the Crown Mineral Estate.
Crown Minerals Act 1991
Key parts of the Crown Minerals Act 1991 are:
2 Interpretation
(1) In this Act, unless the context otherwise requires - prospecting means any activity undertaken for the purpose of identifying land likely to contain exploitable mineral deposits or occurrences; and includes -
(a) Geological, geochemical, and geophysical surveys; and
(b) The taking of samples by hand or hand held methods; and
(c) Aerial surveys,-
and
28 Restriction on granting of prospecting permits
(1) Where, in respect of any application for a prospecting permit, the Minister considers that-
(a) The prospecting proposed in the application is unlikely to materially add to the existing knowledge of the mineral in all or part of the land to which the application relates; or
(b) There exists, at the time of the application, substantial interest in exploring for or mining the mineral in all or part of the land to which the application relates,-
the Minister shall not grant a prospecting permit in respect of the mineral and the land or part of the land concerned unless he or she is satisfied that special circumstances apply.
Why the statutory restriction?
The Crown, as the mineral owner, is seeking what is called efficient allocation and a fair financial return. The Crown's view is that it is not efficient to grant prospecting permits where exploration programmes have been previously undertaken and data, available from these programmes, has shown mineralisation. In other words where the work programme under a prospecting permit is unlikely to add to the existing knowledge. It is also unlikely to get a fair financial return if the knowledge and understanding is not progressed.
Also, the Crown's view, as the mineral owner, is that it would be more efficient and more likely to get a fair financial return from either an exploration or mining permit. The Crown has allowed for itself to take into consideration whether other applications for exploration or mining permits exist. Is there other substantial interest?
On a more fundamental note the Crown, as the mineral owner, will not achieve value from its asset if prospecting permits are held cheaply and or for retention purposes over land already known to contain exploitable mineral occurrences.
Minerals Programme for Minerals
The restriction on granting prospecting permits is further discussed in the Minerals Programme for Minerals (Excluding Petroleum) 2008 [2.5 MB PDF] where the Crown’s policies and procedures are articulated. The key sections in the programme are:
- 2.8 Prospecting permits
- 6.1 Assessment of work programmes
- 6.2 General matters to be considered for assessment of work programmes
