Securing access to land is one of the most important and often one of the most sensitive, steps in progressing exploration or mining activities in New South Wales, in addition to ensuring that the relevant statutory approvals are in place. Both explorers and landholders benefit from clear, well structured agreements that balance operational needs with the protection of landholder rights.

Under the Mining Act 1992 (NSW) (Mining Act), two key mechanisms govern access:

• land access arrangements for prospecting operations carried out under exploration licences and assessment leases; and

• compensation agreements for mining operations carried out under a mining lease.

The above mechanisms serve different purposes, follow different processes and carry different legal consequences and it is important that they are both in place and properly drafted before the relevant operations commence.

This article outlines the distinctions between these agreements and highlights the importance of the terms of the agreements.

A written land access arrangement (LAA) is required before an explorer can enter land under an exploration licence or an assessment lease and carry out prospecting operations.

LAAs regulate the terms on which exploration activities, such as drilling, sampling, surveying or establishing temporary access tracks, may occur. As such, they should clearly define what activities are permitted, including any conditions on timing, location, vegetation clearing or rehabilitation obligations.

In exchange for access being granted to an explorer, landholders, which are broadly defined and include lessees, are entitled to compensation for any "compensable loss" suffered or likely to be suffered by the landholder as a result of the exercise of the rights conferred by the licence, lease or by an access arrangement.

"Compensable loss" is defined in section 262 of the Mining Act and includes damage to the surface of land, to crops, vegetation, buildings, structures or works, being damage which has been caused by or which may arise from prospecting or mining operations.

Unsurprisingly, LAAs usually require the payment of money from the explorer to the landholder and the amount of compensation can be an area of dispute between parties. Disputes can also arise about the type of work proposed to be carried out and the location of the exploration work, as well as the conditions imposed on the work that can be carried out.

If parties cannot agree on an LAA, the Act requires participation in a mandatory mediation and arbitration process before any court involvement. The mediation and arbitration process is intended to be a relatively quick, cost effective mechanism to resolve access terms. There are timeframes within the legislation which dictate when things such as the appointment of the arbitrator can occur and so it is important to adhere closely to the legislation. The explorer is also required to pay the reasonable costs of the landholder in participating in the arbitration, which includes reasonable legal costs.

Once the arbitration process has been exhausted, only then can a party seek orders from the Land and Environment Court.

A written compensation agreement (CA) is required before a mining lease holder can access land to carry out mining operations.

Like a LAA, a CA is to compensate a landholder for any "compensable loss" suffered or likely to be suffered by the landholder as a result of the exercise of the rights conferred by the mining lease. The right to compensation arises on the grant of a mining lease.

As mining activities are generally more intensive and long term than exploration, the compensation amount is usually correspondingly more substantial. However, section 272 of the Mining Act states that the compensation must not exceed in amount the market value (for other than ancillary mining activities) of the land and the buildings, structures and works situated on the land.

Unlike LAAs, there is no legislated arbitration requirement. If a CA is not entered into within 28 days of the date on which the mining lease takes effect, either the mining lease holder or the landholder may apply directly to the Land and Environment Court for a determination of compensation.

Whether negotiating an LAA or a CA, the detail matters. Poorly drafted or vague terms can lead to disputes, delays and increased costs. These issues may arise early on after the agreement is entered into or towards the end of the term.

Some of the key clauses to consider for both parties are:

• Activities permitted: the agreements should precisely define what the licence holder can do on the land and where. It is important to identify "significant improvements".

• Access conditions: the hours of operation, access tracks, biosecurity measures, environmental protections and rehabilitation standards should all be considered in the written agreement.

• Payment(s): the amount and timing of the payment of any compensation should be clearly set out, including whether it is a one off payment or an annual payment.

• Dispute resolution: processes for addressing disagreements during the life of the agreement should be set out to assist the parties with avoiding litigation of any dispute.

• Indemnities and insurance: ensuring any necessary indemnities and insurance are in place may also be important, especially to landholders.

• Rehabilitation requirements: as mining operations generally have an expiration date, the rehabilitation requirements should be considered.

Both miners and landholders benefit from clarity. Miners gain certainty and operational efficiency; landholders gain protection, transparency and enforceable obligations.

While negotiating LAAs and CAs can be complicated and time consuming, which could force the need for the matters to be determined by third parties, these types of disputes are not commonly heard in the Land and Environment Court compared with other types of planning and environment disputes. However, most disputes can be settled between the parties using alternative dispute resolution processes, including the mediation and arbitration process that is provided for under the Mining Act.

The limited disputes that have been heard related to:

1. Whether particular work comprised a "significant improvement" that would have the effect of excluding particular land from being accessed by a licence holder. See BFB Pty Limited v Sandfire Resources NL [2019] NSWLEC 1235.

2. The determination of a financial amount to compensate non financial losses. See Lord v Broken Hill Cobalt Project Pty Ltd [2024] NSWLEC 52.

It goes without saying that land access is a critical interface between the mining industry and the rural community. The Mining Act provides structured pathways, LAAs for exploration and CAs for mining, to ensure that access is lawful, fair and transparent. For both miners and landholders, investing time in negotiating clear, comprehensive agreements is the best way to avoid disputes and maintain productive relationships.

For further guidance on land access arrangements, compensation agreements or resolving related disputes under the Mining Act 1992 (NSW), please contact our Planning, Government, Infrastructure & Environment team.