The cost of mining – loss of property value and potential liabilities for landowners – what should you do?

cost of mining.PNG

http://www.theherald.com.au/story/1198539/poll-mining-destroys-hunter-property-values/

Attention -To all farmers / landowners under an exploration / retention licence

Your right to refuse access

Legislation is in place that requires exploration and mining companies to obtain consent from landowners prior to accessing land for all minerals, petroleum and associated pipeline projects in Victoria.

If a landholder does not provide consent and an appropriate amount of compensation cannot be agreed, then either party may refer to the Victoria Civil and Administrative Tribunal (VCAT).

VCAT does not determine the right to access land, rather the amount of compensation to be paid to the landholder.

Yet, in the determination of the amount of compensation to be payable by the licensee to the landholder, this confers a right for the licensee to enter the land when, in fact, the landholder did not give authorisation. This issue is relevant for future complications with accessing insurance coverage and/or being in default of mortgage conditions.

 

  • You cannot be charged with being vexatious which is a tactic that companies use
  • Do not be intimidated by threats of compulsion. If the company is on your land without permission they are guilty of trespass – but you must act within 12 months.

If you are feeling uncertain or threatened please email us for advice.

#Note: Anyone who is contemplating entering an agreement with Kalbar consultants, there are some critical things to consider.

Consent for Land Access agreements

What you should know before you sign a land access contract

  • Any land access agreement/consent you sign will be binding on all future landholders.
  • Disclosures should state plainly that property covered by a License might violate the terms of a current mortgage or make it impossible to secure a mortgage, refinance or secure insurance on the property in the future.
  • It is important that the landowner press for a contract which allocates responsibility for managing the risk and any adverse outcome onto the licensee operator.
  • Press for state government to become party to the contract to avoid potential ongoing liability costs post rehabilitation.
  • Landowners should know upfront if discharge of wastewater to land would impact their business requirements.
  • Buffer and separation distances should be clearly outlined to ensure exposure risks from chemicals, dusts, accidents and spills are reduced.

The main disadvantage to landowners is in the creation of new risks of environmental harm that are created by any mining operations.

It is clear that disturbance of soil and pasture will occur and that varying impacts related to groundwater depletion, contamination, land movement will also occur as can happen with any mining operations, which is why the term ‘minimising the impacts’ is found throughout all government documentation.  Landowners are going in blind for contractual agreements for land access without any real understanding of liabilities or protections from liability.

Understand that confidentiality agreements are not there to protect you rather they are there to prevent the company from incurring any future liabilities potentially to your detriment so no agreement should state an end date.

 

Currently, no presumptive liability exists.

If contamination/negative impact is obvious, state acts are applicable.  If contamination or other incidents cannot be proven by you, at your expense, then no insurance company will compensate.

Compensation

What is access worth under a retention licence?

Compensation paid by mining companies is based on inconvenience and loss of use to the spatial area that only the workplan will impact whereas a bank will devalue the entire property the moment a retention licence is signed.

As an example, if a property is worth $800,000, under mortgage it would be instantly devalued by 10%. The more the property is worked the less the land is worth.

If the retention licence is renewed further how much compensation would be sufficient to make up for capital improvement over a 10 year period to a similar property not subject to mining?

 

Retention Licence

  • A landowner/business operator needs certainty to forward plan

The complication –

How do you secure finance, particularly, if property valuations are decreased?

A RL becomes a barrier to agricultural development, small business confidence, transfer of land and community renewal.

 

RL are currently under discussion to be part of a Section 32

The Section 32 is a document provided by the seller of real estate (vendor) to an intending purchaser. Its name comes from Section 32 of the Sale of Land Act, which requires a vendor to provide certain information to a purchaser BEFORE a contract of sale is signed.

 


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s