For agricultural landholders, the last few years have seen significant growth in the value of that land- this is great for those who own the land, but perhaps not so much those wanting to buy it!
However, owning agricultural land has not been all plain sailing, with various pressures or risks arising. This has ranged from things like increasing costs associated with things like fertiliser through to pressures from the incursion of development and the competing interests between residential and agricultural activities.
A couple of issues that have been particularly prominent in the last few years have been changes to the Mining Act and, more recently, the introduction of the Hydrogen and Renewable Energy Bill 2023.
The impact of mining and related activities can be widespread and regularly impacts on agricultural landholders. As an example of the potentially widespread impact of mining operations, in April 2023 Australian Rare Earth (ARE) were granted 4000sq km of mining exploration leases in the South-East of South Australia and Western Victoria.
The Mining Act governs mining activities for the exploration and extraction of minerals and other resources on land, and its intricacies can have significant impacts on a farmer’s use of their land. It is therefore important for landowners and pastoral lease holders to fully understand their rights and responsibilities under the Act.
Whilst not impossible, more often than not it is very difficult to stand in the way of a mine proceeding. The consequence of this is that one of the most important aspects of the interaction with mining activities is the negotiation of the terms upon which a mining company is to have access to the land and undertake any mining operations.
This is typically done by way of an Access and Compensation Agreement or similar. These agreements define the terms under which mining companies can access the land and outline the compensation landowners and lease holders are entitled to receive. Furthermore, they address practical issues relating to land access, including livestock and farming infrastructure interactions. A well-drafted agreement is vital in safeguarding the interests of landowners and, where relevant, lease holders. It will assist in clearly delineating the scope of mining activities (including the use and activities on the land), the basis for any compensation, address environmental concerns and set conditions for ongoing communication.
Adding to the complexity of the issues in relation to mining is the introduction of the Hydrogen Gas and Renewable Energy Bill 2023, which will add another layer of complexity in relation to hydrogen gas and renewable energy sources, such as wind and solar.
It isn’t entirely clear yet how far reaching the impact of the Bill (if enacted) will be, both in terms of what land it will apply to and what the regime will be.
As currently drafted, it appears that the intention is to allow the Government to establish areas of ‘designated land’, in respect of which the provisions of the Bill will apply. The Bill also provides for various types of licences, which can be obtained to permit a range of activities on designated land- a person or entity with the benefit of a licence will be able to access and use an area of designated land for the purpose provided for in the licence.
One particularly significant issue is that the Bill appears to drastically change the current arrangements in respect of wind and solar farms. The existing legislative arrangements allow landowners and renewable energy companies to directly negotiate and enter into a commercial arrangement for the use of a landowner’s property for solar farms or wind turbines. If the landowner does not agree to the arrangement, then that is the end of the matter.
What the Bill appears to be doing, at least for certain areas, is to usurp this commercial relationship by providing renewable energy companies with a right to access land, establish solar or wind farms and pay compensation based on ‘losses’ (being damage to land and loss of productivity or profits). The cross-over with the Mining Act is that the Bill will have the consequence of treating the installation of wind and solar facilities in almost the same way as a mineral under the ground.
The upshot of all of this is that the Mining Act and the Hydrogen and Renewable Energy Bill both have the potential to significantly impact on agricultural landholders and it is important that they are aware of what their rights are if a mining or renewable energy company comes knocking on the door.
This article was published in the Stock Journal on 2 November, 2023.