Royal Mines

Abstract

Cadia Holdings Pty Ltd v New South Wales [2010] HCA 27, 25 August 2010, comes hard on the heels of Star Energy Weald Basin Ltd v Bocardo SA [2010] UKSC 35 as another reconsideration of deeply-embedded law about mining and the use of the subsurface. The Cadia mines, near Orange, are on land owned by Cadia and its parent Newcrest. Neither the Crown grants nor the lands legislation of the time had reserved minerals to the Crown. But under the prerogative, as laid down in the Case of Mines (1568) 1 Plowden 310, 75 ER 472, mines of gold and silver belong to the Crown; and so do all ores or mines of copper, or other base metal, containing or bearing gold and silver. Cadia held mining leases under the Mining Act 1992 of New South Wales, which allows the Minister to grant mining leases over privately-owned minerals as well as public. But where in such cases the Minister receives royalties for privately owned minerals, he or she must pay seven-eighths to the owner. The problem is that many mineral deposits contain mixtures; silver-lead-zinc deposits are common, and so are copper-gold deposits. The Cadia mines are a copper-gold deposit. The two elements could not be mined separately, and could be separated only during processing. The State refused to pay the seven-eighths royalty collected on the copper, because the mines could not fairly be described as a copper mine. The Court of Appeal agreed.