MINERALS DEVELOPMENT BILLConsolidation & Update of Previous Acts

Presentation to Joint Oireachtas Committee on Transport & Communications 1 April 2015

Exploration & Mining DivisionDepartment of Communications, Energy & Natural Resources

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Current Minerals Legislation

• Minerals Development Act 1940

• Petroleum and Other Minerals Development Act 1960

• Minerals Development Act 1979

• Minerals Development Act 1995

• Minerals Development Act 1999

[Collectively, Minerals Development Acts 1940 to 1999]

• Energy Miscellaneous Provisions Act 2006

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Scope of Current Legislation

The Minerals Development Acts, 1940 to 1999 include, inter alia: •provisions for regulation of minerals prospecting and development; •a statutory vesting of the exclusive right to work minerals in the Minister, subject to the payment of compensation;•compulsory acquisition of other rights necessary for efficient development of minerals, subject to payment of compensation; and •the payment to the State of rents and royalties from the extraction of minerals.

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Background to Bill• Government Decision of the 2 of June 2006;• In preparation for quite a number of years, interrupted by

higher priority legislation;• Initial motivation to prepare the legislation remains the

same today: • address practical difficulties in application of existing Acts;• provide greater clarity for potential developers and mineral owners;• modernise provisions for compulsory acquisition;

• Department’s Integrated Reform Delivery Plan, prepared under Government’s Public Service Reform Plan, commits to modernisation of sectoral legislation including consolidation of these Acts.

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Purpose of the Bill • A modern regulatory regime for exploration and development of state minerals;

• Apply principles of social justice the exercise of private rights in respect of

minerals and ancillary rights and reconcile their exercise with the exigencies of

the common good;

• Continued vesting in the Minister for Communications, Energy and Natural

Resources the exclusive right of working private minerals, subject to

compensation;

• To provide for preparation and implementation of rehabilitation plans for

abandoned mine sites; and

• To provide for consequential amendments.

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Short Title

• An Act to make further and better provision for the

development of minerals in the State and for that purpose

to repeal the Minerals Development Acts 1940 to 1999

(other than certain provisions of the Minerals Development

Act 1979) and the Minerals Company Acts 1941 to 1950, to

make consequential amendments to other Acts, and to

provide for related matters.

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Principal Changes in the Bill

These relate to:

•the procedures for compulsory acquisition in respect of

ancillary surface rights;

•the method for the calculations of rents/royalties;

•the basis for payment of compensation in respect of

private minerals.

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These revisions will:

• Streamline processes from the point of view of investors

in the sector;

• Provide greater transparency in terms of their financial

obligations;

• While continuing to protect private property rights in

accordance with the Constitution;

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Environmental

• The Bill does not directly address environmental matters

which are more appropriate to the EPA and local

authorities;

• EPA legislation specifically precludes the Minister from

attaching environmental conditions to mining permits;

• Nevertheless the Bill must take appropriate account of

these matters, in particular to address obligations under

the Aarhus Convention.

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Main Provisions of the Bill

Part 1 Preliminary and General (Sections 1-6)

Part 2 Prospecting (Sections 7-52)

Part 3 Working Minerals (Sections 53 to 101)

Part 4 Ancillary Rights (Sections 102 to 130)

Part 5 Rehabilitation (Sections 131 to 154)

Part 6 Mining Board (Sections 155 to 190)

Part 7 Enforcement and Miscellaneous (Sections 191 to 223)

Part 8 Transitional Provisions, Repeals and Consequential

Amendments (Sections 224 to 249)

Schedule: List of Minerals

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Part 1 Preliminary and General (Sections 1-6)

Contains standard provisions such as short title and

commencement arrangements, interpretation and

application.

•A key definition is the that of “Minerals”, which excludes

stone, sand, gravel and clay, petroleum and dolomitic

limestone;

•Other sections define “Working minerals” and clarify State

rights over minerals.

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Part 2 Prospecting (Sections 7-50)

This part sets out the principles, policies and procedures for regulating

prospecting either by the Minister or prospecting licence holders. It

mainly restates existing provisions. The principal changes include:

•Codifying current administrative procedure for registration of

Statements of Interest and PL competitions;

•Introduction of Retention Licences;

•Setting out criteria for determining “fit and proper person” and “public

interest”;

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Part 2 Prospecting (2) (Sections 7-50)

• Prior written consent now required for boreholes, trenching and bulk

sampling;

• Limited right to extract minerals for trial or test purposes, subject to

compensation to owners;

• Airborne Surveys:

• duty to notify Minister and provide data;

• Confidentiality of data.

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Part 3 Working Minerals (Sections 53 to 101)

Main changes:

•Objective is to eliminate difference between private and State minerals from developer’s perspective;

•Restatement of exclusive right to work minerals vested in the Minister under Minerals Development Act 1979, and right to compensation established under that Act;

•Single instrument, mining licence, regardless of ownership (replacing State Mining Leases & Licences);

•Revisions of public notice procedure and title research requirement prior to granting a Licence;

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Part 3 Working Minerals (2)(Sections 53 to 101)

• More detailed processes for application and granting of mining licence.

• Greater clarity on scope of Mining Board consideration of objections;• Greater predetermination of fees & royalties;

• All licences subject to basic fee;

• All licences subject to royalty for which ranges will be set by regulations; • Clarity on the basis for assessment of compensation for private

mineral owners:• Compensation to be paid by Minister will equal amount of royalty;• Right of appeal to Mining Board continues.

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Part 4 Ancillary Rights (Sections 102 to 130)Relates to ancillary rights necessary to carry out a variety of other activities not included in definition of “working minerals” but necessary to work minerals efficiently:

•Replaces provisions from 1940, not considered up to modern best practice;

•Clearly defined “ancillary underground rights” and “ancillary surface rights”;

•Underground rights (>10m below surface)

• automatically go with licence;

• Subject to right to compensation deemed zero unless landowner can prove otherwise – Mining Board will determine;

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Part 4 Ancillary Rights (2)(Sections 102 to 130)• Surface rights (<10 meters from surface) include rights to sink

wells & shafts and construct declines and surface facilities;

• Right of Minister to compulsorily acquire land or rights over

land where justified, subject to obligation on developer to

negotiate;

• Compensation to be paid by Minister and recouped from

developer;

• Compensation determined by Mining Board.

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Part 5 Rehabilitation (Sections 131 to 154)• This part will replace Part 9 of the Energy (Miscellaneous

Provisions) Act 2006;• 2006 provisions were intended specifically for Silvermines

but attempt was made at general application;• Reviewed and revised following more careful

consideration;• Provides for designation of an area as a rehabilitation

area and allows for adoption of rehab plan but no obligation to address any particular site;

• Provides for compulsory acquisition;• Intended only for legacy sites.

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Part 6 Mining Board (Sections 155 to 190)

• This part provides for the continuation of the Mining Board;

• Quasi-judicial independent board established under 1940 Act to adjudicate various matters in that Act, with more additional functions set out in 1979 Act;

• Mainly deals with compensation issues;

• Provisions mainly relate to administration and governance of Board and its procedures for making decisions.

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Part 7 Enforcement and Miscellaneous (Sections 191 to 223) Chapter 1This chapter:

•Creates the offence of unlawful working or prospecting

•Enhances the powers of inspectors appointed by the Minister.

•Introduces injunctive powers for continuing offences;

•Clarifies which offences will be prosecuted by the Minister and which by the Mining Board;

•Sets time limits for prosecution of offences.

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Part 7 Enforcement and Miscellaneous (Sections 191 to 212) Chapters 2 - 4Other chapters in this Part address:

•Compliance with the Aarhus Convention in relation to public participation in environmental decision making and access to justice, except for mining;

•General provisions relating to liability for damage or nuisance;

•Requirement to notify Minister of boreholes >5m depth, keeping of records and specimens and right of inspectors to view records and take specimens.

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Part 7 Enforcement and Miscellaneous (Sections 213 to 223) Chapters 5 - 6• Registration of excepted minerals – i.e. minerals being

worked on the appointed day in 1979 that were registered as excepted from the statutory vesting of the right to work minerals• Bill will provide that all such registrations are automatically

cancelled on enactment;• Where such minerals were still being worked on an appointed day

in 2015, registration can be re-applied for;• Mining Board will determine whether registration can be reinstated.

• Other miscellaneous matters, such as general power to make regulations, annual report to Oireachtas etc.

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Part 8 Transitional Provisions, Repeals and Consequential Amendments (Sections 224 to 249)This part deals with consequential amendments to and repeals of other legislation, and with transitional matters such as:

•Continuation of instruments under previous Acts and regulations;

•Continuing of applications made under former Acts;

•Continuation of compensation arrangements already in place.

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Schedule

• The schedule contains a list of minerals which for

certainty are included within the definition of minerals;

• The list is not exhaustive and the definition of minerals

may allow other substances to be defined as minerals;

• The schedule also includes definitions of “dolomitic

limestone” and “silica sand”.

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Regulatory Impact Analysis

• A Regulatory Impact Analysis (RIA) setting out the policy context and rationale for the Bill has been prepared.

• Included consultation with key stakeholders for Screening RIA submitted to Government in 2006 and a further consultation in 2009.

• Has been updated in light of drafting changes and changes in RIA requirements;

• Must continue to be regarded as a draft until Bill is submitted to Government for permission to publish.