Julia Gillard – Prime Minister of Australia
Governments only sell you the right to mine the resource.
A resource we hold in trust for a sovereign people.
They own it and they deserve their share.
I wonder who the PMs legal advisor is?
The Queensland Minerals Resources Act states:
All minerals lawfully mined under the authority of a mining lease cease to be the property of the Crown or person who had property therein and become the property of the holder of the mining lease subject however to the rights to royalty payments under this Act of the Crown or any other person.
The New South Wales Mining Act states:
For the purposes of this or any other Act or law, it is declared that any mineral that is lawfully mined becomes the property of the person by or on behalf of whom it is mined at the time the material from which it is recovered is severed from the land from which it is mined.
The Western Australian Mining Act states:
Subject to this Act and to any conditions to which the mining lease is subject, the lessee of a mining lease … owns all minerals lawfully mined from the land under the mining lease.
This is a huge mistake – Gillard and/or her advisors didn’t bother to check the actual legal regime operating in Australia.
The miners own the minerals once mined.
But they don’t own the minerals in the land.
They only have a license to mine those minerals. Once the license expires, the miners only have an interest in the minerals already owned, which they then own outright.
Les Majesty
30 May 12 at 11:21 pm
For a lawyer, she sure doesn’t know much law.
boy on a bike
30 May 12 at 11:21 pm
MINERAL RESOURCES ACT 1989 – SECT 8
8 Crown’s property in minerals
(1) Gold on or below the surface of land is the property of the Crown.
(2) Coal:
(a) on or below the surface of land that was acquired by the Crown as provided in the Agricultural Lands Special Purchase Act 1901 and subsequently alienated in fee simple by the Crown is the property of the Crown;
(b) on or below the surface of land (other than land referred to in paragraph (a)) is the property of the Crown except where that land was alienated in fee simple by the Crown before 1 March 1910 and the grant of that land did not contain a reservation to the Crown of the property in that coal.
(3) All minerals (other than coal and gold but including minerals dissolved or suspended in water within or upon the earth’s crust) on or below the surface of land in Queensland other than land alienated in fee simple by the Crown pursuant to
(a) the Alienation of Crown Lands Act 1860, section 22; or
(b) the Crown Lands Alienation Act 1868, section 32; or
(c) the Mineral Lands Act 1872, section 21;
are the property of the Crown.
(4) Each deed of grant or lease of unallocated State land must contain a reservation of:
(a) minerals on and below the surface of the land; and
(b) the right of access for prospecting, exploring or mining.
(5) Mineral on or below the surface of land that is or becomes road is (to the extent that the mineral, but for this paragraph would not be the property of the Crown) on and from the date the land becomes or became road, the property of the Crown.
(6) Where land to a specified depth only is or becomes road, subsection (5) applies in respect only of mineral in or below the surface of that land to the specified depth.
(7) Nothing in subsections (5) and (6) shall be construed as abrogating any right that the owner of land whose land is compulsorily acquired after the commencement of this Act for the purpose of being used as a road may have under any other Act or law to compensation in respect of that acquisition.
Les Majesty
30 May 12 at 11:24 pm
She was far too busy with student politics apparently boy on a bike, to ever actually study much law. Look at the work she did for the ex boyfriend with the dodgy shelf company and you’ll see the extent of her expertise. She even screwed that up.
Philip Crowley
30 May 12 at 11:26 pm
Sorry but what Julia said is completely correct as a matter of law.
The minerals are the property of the state.
Only after they are extracted from the ground pursuant to a temporary mining license does title to the minerals pass to the miner.
Les Majesty
30 May 12 at 11:26 pm
Les – yes. Minerals in the ground belong to the Crown. That ownership ceases when the lease is granted and the minerals mined. Read what Gillard said. “Governments only sell you the right to mine the resource.” That is not correct – when mined ownership changes.
Sinclair Davidson
30 May 12 at 11:28 pm
Stop ruining the semantic vibe with your law-talking jive Les.
badm0f0
30 May 12 at 11:32 pm
She might be foreshadowing a move to a board type selling system where the government sets a pool price, acquires all production and sells it from a single desk. Like the old wheat board. Then we could have a floor price.
Pickles
30 May 12 at 11:36 pm
– Gillard and/or her advisors didn’t bother to check the actual legal regime operating in Australia.
This is because in their dictatorial mindset, THEY ARE THE LAW.
Election now. Resist the Grunreich.
perturbed
30 May 12 at 11:38 pm
It’s another reform, pickles. No doubt Kenny the Wombat whisperer would have thought that one up.
All that crap in her speech about who owns da minerals was no doubt written by Kenny the wombat whisperer from her office. Self important blubbering idiot he is.
JC
30 May 12 at 11:39 pm
JC – you’re being a bit harsh. But she probably has been taken in by the propaganda used to sell the RSPT and MRRT.
Sinclair Davidson
30 May 12 at 11:41 pm
What she said is perfectly technically correct, if unnecessarily gratuitous. Government does only sell the right to mine, not the mineral itself. That ownership of the mineral is acquired via the exercise of that right does not alter the actual subject of the transaction – the right itself.
badm0f0
30 May 12 at 11:42 pm
badm0f0 – so how do you explain “They own it and they deserve their share”?
Sinclair Davidson
30 May 12 at 11:44 pm
Well Kelvin Thompson didn’t seem to care if a few mines were a bit late. After all, if the board imposes a quota and restricts supply then the price goes up. If it doesn’t you can put in a floor price and the market will pay. If they don’t you can store the product and shoot the sheep.
Pickles
30 May 12 at 11:46 pm
Here. This the relevant that trumps all.
COMMONWEALTH OF AUSTRALIA CONSTITUTION ACT – SECT 91
Exceptions as to bounties
Nothing in this Constitution prohibits a State from granting any aid to or bounty on mining for gold, silver, or other metals, nor from granting, with the consent of both Houses of the Parliament of the Commonwealth expressed by resolution, any aid to or bounty on the production or export of goods.
This clearly suggests the states are the ones with the right to decide what happens to minerals, not the commonwealth. So Canberra can do or say whatever they like but this isn’t going away.
As a Victorian I have no right to claim any fair share of taxes etc generated from WA mining.
I hope Bado isn’t suggesting we do, because if he does he’s an idiot.
JC
30 May 12 at 11:50 pm
Sinc, Kenny the wombat whisperer was the one who thought up the bright idea of a rent tax and then directly and indirectly decided to defend it. It was shot down in flames 200 years ago.
There’s no such thing as economic rent. It’s a preposterous claim and anyone attempting to defend is preposterous.
JC
30 May 12 at 11:52 pm
JC – while we know that, the optimal tax theory people don’t.
Sinclair Davidson
30 May 12 at 11:54 pm
Brad Pitt’s double has no concept of the time value of money and cost of capital. Seriously it’s like trying to talk to another species with these imbeciles.
JC
30 May 12 at 11:55 pm
How about section 2i of the AWU Ownership Act 2012?
The holder of a mining lease must pay the Australian Workers Union an annual sum not less than ten per cent of the value of the minerals it has extracted
Samuel J
30 May 12 at 11:56 pm
My favourite new economic theory that has been bombarding the airwaves is that we should be saving these minerals for the future and not wasting them now.
Infidel Tiger
30 May 12 at 11:57 pm
So the 30% corporate income tax rate is not optimal? I haven’t seen any of these turkeys suggest it ought to go higher and in fact they promised they would lower it a whole 1% and then broke their pledge.
JC
30 May 12 at 11:58 pm
In the context of selling the right to extract “it”, I’d say it’s a fairly transparent and banal justification for profit based taxation of resources. As I said previously it’s a fairly (or unnecessarily) gratuitous statement of the obvious as to proprietary rights tin regard to mineral resources. One wonders who advised Gillard it would be a good idea to front up & piss in people’s faces on an issue that had been dropping off the radar.
badm0f0
31 May 12 at 12:05 am
and it’s also incorrect and misleading as sect 91 of the constitution says. The states own the right to taxing it, so therefore as a Victorian I have absolutely no legitimate claim over WA mining taxes. None. not one bit.
JC
31 May 12 at 12:08 am
The argument isn’t jurisdictional, the states clearly retain the power to transfer most mineral rights on their terms. But the commonwealth does have the power to tax the profits derived from mining. As I’ve said previously on this issue if the commonwealth had been serious about implementing profit based taxation as an actual reform, whether on efficiency and/or equity grounds, they needed to go through the states and not try to roll over the top of them. National Competition Policy reforms could never have happened without the states being responsible for implementing change and directly benefiting from i.
badm0f0
31 May 12 at 12:31 am
Needless to say, fucking iPad.
badm0f0
31 May 12 at 12:35 am
Bado
True.
true also. the Feds have the right to base a tax on time an ant reaching the nest if they want. There’s no question on that. However all the states have to do is raise royalties and it basically negates anything the Feds choose to do. They would easily win a court case over this in a second. Of course the government can threaten them to lower the GST, but good luck holding seats in that state.
In other words its unworkable,
A profits based tax at the state level would be more efficient by the sounds of things, but sometimes it’s also more effective to simply retain what there is like the royalty system as it’s well understood and worked well in the past.
JC
31 May 12 at 12:39 am
Listen to Julia. She is a feminist. Of course she is right. Feminists are always right and all men are rapists. Especially miners who rape the earth, You know this. Child ‘learners’ in school discover this from within their own experience as part of their ‘learnings’ and with ‘facilitation’ and ‘enablement’ from the teachers who are all bloody feminists too. As for all that legislative gobbledegook, it is all ‘Patriarchal Oppression’ cooked up by Dead White Males.
Amfortas
31 May 12 at 12:55 am
Xena, She-Wolf of Pollies, cares not for legalities !
The Old and Unimproved Dave
31 May 12 at 4:55 am
D’oh, they don’t own the minerals until we sell them or rather the mining rights.
How hard is that to understand?
Grey
31 May 12 at 6:11 am
Wasn’t it someone famous who quipped, “Socialism work well until you run out of other peoples’ money?”
We are close to the next step, anarchy. I am greatly fearful for our directions and stability when / if the mining is forced out of this country.
another captain
31 May 12 at 6:58 am
It’s a bit embarrassing to have a PM display so little knowledge of Constitutional law
But it’s just following on from Rudd – he had the same line
Just been at the gym and Conroy was on tv (channel 10) sprouting the same line ‘minerals resources belongs to all the people’
(sigh)
val majkus
31 May 12 at 7:09 am
The basic understanding under which mineral extraction law operates is “finders, keepers”. An explorer obtains a licence to discover minerals and in return has to make regular reports on the findings which become publicly available. He has to progressively surrender parts of the lease to forestall “real estating” – waiting for someone else to discover something and thereby reveal uniscovered wealth on his own land.
If something is discovered it becomes the property of the finder subject to, theoretically, known and fixed royalties to the state (and of course, income tax)
This encourages the correct amount of effort and the absence of mineral rights by the surface owner encourages search activity.
If we now say you do not automatically own the wealth you discover but it becomes ownership conditional on what the sovereign people’s representative decide, there becomes a massive disincentive to search. This would pretty well destroy mining over time.
The context for this approach to mining law is where little is known publically about the area being searched. Once its mineral wealth is well known, efficiencty suggests there becomes a case for auctioning the right to search and benefit from any findings.
Such subtleties would, of course be lost on Julia and others who have no notion of incentives or of the importance of property rights.
Alan Moran
31 May 12 at 7:13 am
It’s their business model. Think ‘carbon tax’.
Dandy Warhol
31 May 12 at 7:19 am
She is hell bent on circumventing the Australian Constitution and also dealing the States out of Royalties.
You wonder if she is daring the Miners and the Sates to mount a High Court challenge.
Mike of Marion
31 May 12 at 7:33 am
Nothing subtle about it; their solution to the ‘two speed economy’ is to apply the handbrake to the fast bit. And if their precious union mates can’t ‘share’ the wealth then they’ll shut it down.
Wait till after the election and the TUP rolls out the ‘shock and awe’ of strikes and industrial sabotage and the Greens’ ‘environmental armageddon’.
But can anyone even dream of the Liberals (sic) defunding these parasites…
Forester
31 May 12 at 7:38 am
Check out the comments in the smh on this issue
http://www.smh.com.au/national/boom-is-not-yours-pm-tells-miners-20120530-1zjfb.html
Here’s one which is reasonably typical of the majority which accept what Gillard says
val majkus
31 May 12 at 7:45 am
I don’t know why some people struggle with this. The ground is like a State owned supermarket and you get a licence that allows you to select various goods from it and then you pay the State for the amount of goods you select. Unlike woolies, you have to build your own trolley to collect the goods, but otherwise its the same.
The real issue is not who owns the minerals at any point in time, its that the minerals are owned by the States and not the Commonwealth. So Jules is trying to say she gets to charge for the goods the States are selling, except that’s not what she’s doing, she’s taxing profits in specific businesses who currently happen to be extra profitable.
pedro
31 May 12 at 8:05 am
JC
Just implement the WA system everywhere and to the offshore minerals.
.
31 May 12 at 8:06 am
The principal mistake made is the “so called” obscene profits we are alleged to make from mining. The profits that attract everyone’s attention are the book ones published in the corporate accounts before ultimate disbursement to the shareholders. I don’t see anyone flogging this crucial fact in the media. Go buy a mining company share and see what the dividend rate is. Reducing our profits is simply reducing the amount we have to give the shareholders, yet this argument is not heard being put in the media.
Louis Hissink
31 May 12 at 8:14 am
This from someone who practised law! Shame on her and shame on those who voted for this disgrace. Nasty mean minded hate for hardworking families is al we see
whalehunt fun
31 May 12 at 8:20 am
Clearly she took the minimum required constitutional law cases before becoming an incompetent commercial solicitor.
.
31 May 12 at 8:38 am
Well done Sinclair, this legal view should have been all over the media at the first anouncement of the RSPT. Combine this with the miners’ ‘intellectual’ and ‘capital’ rights over the resource and you get a thorough understanding of the enormous theft being perpetrated and idealised by Labor.
Uber
31 May 12 at 8:39 am
Sinclair you said, “That ownership ceases when the lease is granted and the minerals mined.”
Which is it? They are separate entities. If it’s the latter, when is the mineral said to be mined?
Either way it doesn’t really matter. The stuff isn’t worth a dime until it comes out the back end of a concentrator.
Uber
31 May 12 at 8:47 am
Uber – not following your question. Minerals in the ground belong to the State Crown, minerals (legally) mined belong to the miner.
Sinclair Davidson
31 May 12 at 8:59 am
The focus groups made me tell this lie.
Judith Sloan
31 May 12 at 9:01 am
Nothing new from our socialist government whose dream of re-allocation of resources is their considered ultimate. Reward for effort was always such a stupid idea anyway because if voters become too contented it becomes too hard to get their attention. There is only so much social division that labor can maintain so the next best is to offer lollies. They really do function just like the unions who have the philosophy of when an employer goes broke, another will just step in to replace them!! No brains what soever!!!
maurie
31 May 12 at 9:03 am
Yes – indeed.
Sinclair Davidson
31 May 12 at 9:03 am
Also from the focus groups:
‘There’s nowhere in the world you’d be better off investing. And there’s nowhere in the world where mining has a stronger future. And this is Australia, and it has a Labor government.”
Tell that to Canada and quite a few other places. Delusional.
Judith Sloan
31 May 12 at 9:07 am
This is just more of the managerial incompetence of this current lots of Labor Parliamentarians.
They’re living in a world defined by their wants, not by reality.
Winston SMITH
31 May 12 at 9:17 am
Judith,
I think you misinterpreted Gillard’s statement – “it has a Labor government” is an implied threat that Australia is governed by a socialist one, and under this system you, the mining industry, have to pay your fair share of tax which is determined by us, the Labor government.
Gillard and her cronies actually believe we in the mining industry will ooohh so happy to pay our “fair share” of tax (assume Boris and Natasha voices). Not a whisper from anyone about the reduction of income to the institutional investers or the small share holders who end up receiving less income from their share of the stocks.
Louis Hissink
31 May 12 at 9:43 am
Anybody got the link to the Gillard MCA speech transcript?
dan
31 May 12 at 9:47 am
Stop reading my mind, Dan.
Her Screechiness’ speech here.
Gab
31 May 12 at 9:48 am
Sinclair, my question regards the fact that there is a world of process between the granting of a lease and the actual extraction of minerals (eg, infrastructre development). Do miners own the rights once the lease is granted, or only after the minerals are extracted? And at what point are the minerals considered ‘extracted’? When they are piled on the surface and separated from waste (Run of Mine condition), after processing, after mine development…?
Uber
31 May 12 at 9:53 am
Oh shit. Its starts with “friends”
Not sure if I can be plooked reading it.
dan
31 May 12 at 9:53 am
“Friends” is just code for ‘comrades’.
Gab
31 May 12 at 9:57 am
An old friend of mine “the poison dwarf” works for the MCA. I reckon he’d be going through “Keating convulsions” when he heard Gillard’s speech, being really amused and almost wanting to spew.
.
31 May 12 at 10:01 am
Never before in my lifetime have I seen a Commonwealth government attempt to trash the Federation like this. All the time, this government tries to undermine the States rather than work with them. One of the stated rationales of the RSPT was to get rid of royalties and replace them with a more efficient tax.
Jonathan Pincus wrote an excellent article in the Oz during the week basically stating that the deadweight losses associated with royalties were overblown by the Wombat whisperer, but nevertheless, if it was decided to replace them, that all revenues raised by the new regime should have been turned over to the states and other commonwealth payments scaled back. Sounds like a great idea, but these small minded fuckwits just couldn’t resist an adversarial revenue grab. Bunch of creeps…
Skuter
31 May 12 at 10:02 am
Uber,
We (the miners) own the minerals (as specified in the lease document) once that lease is granted. However, if the lease is surrendered or expires, the minerals (below a certain depth) revert back to the state. Owner ship starts from grant, not from production further down the flow chart.
Louis Hissink
31 May 12 at 10:07 am
Uber – I’m not sure of the precise definition of what ‘mined’ is – but it seems to me that at the end of the lease minerals still in the ground belong to the crown and not the former lease holder. So with a mining lease if you don’t actually take possession of the mineral you don’t own them.
Sinclair Davidson
31 May 12 at 10:09 am
Exactly Gab. I guess in Her contorted logic she sees the room as being full of rapacious Mining Stalinists and therefore the reference is apt
dan
31 May 12 at 10:09 am
Louis – snap.
Sinclair Davidson
31 May 12 at 10:10 am
Skuter,
For some of us this is unsurprising – do some research on the Fabians and their associates – only the terminally dense could conclude that there is nothing to their philosophical goals.
Louis Hissink
31 May 12 at 10:12 am
Uber: re-read SD’s comment “That ownership ceases when the lease is granted and the minerals mined.”. At the quote’s heart is a conjunction. That conjunction is “and”. Not “or”. So, both conditions need be met; having a lease AND mining the minerals.
retired
31 May 12 at 10:35 am
Roger that – thanks.
Uber
31 May 12 at 10:37 am
Speaking as a lawyer, this is just another piece of wrong advice. She forgot also to mention that back in the middle ages or thereabouts the land owner owned the minerals until they were confiscated (nationalised?)by the Crown because they were seen to have value and the landowning aristocracy did not resist hard enough.
As for the advice, I should not have to point out on this blog that govenment appointees appear to be chosen these days on the basis of whether they will tell the current administration what they want to hear rather than whether they are likely to get things right.
Penndragon
31 May 12 at 10:38 am
No it doesn’t sound like a great idea.
It’s just the next in the line of usurptions by the Feds from the State Govts: Income Tax -> Sales Tax -> Minerals Tax.
Expect them to go after Stamp Duty next, then the states truly will be just administrative regions of Canberra – all just a coincidence of course.
twostix
31 May 12 at 10:38 am
Indeed Louis. The more I see of these creeps, the more I think they are implementing a definite plan. This is all intentional.
Skuter
31 May 12 at 11:10 am
“My favourite new economic theory that has been bombarding the airwaves is that we should be saving these minerals for the future and not wasting them now.” – IT
Have these people never heard of the law of supply and demand? (In a free market, over/under production is regulated by prices).
Anyway, their wish may come true: The world’s biggest miner, BHP Billiton, says it is freezing all board-level major project approvals for six months.
Capitalist Piggy
31 May 12 at 11:20 am
[...] Julia Gillard says that mining companies don’t own the minerals – Australians do. One small problem… they actually do. From WA mining act: Subject to this Act and to any conditions to which the mining lease is subject, the lessee of a mini… [...]
Gillard can butt out « Lattenomics
31 May 12 at 12:44 pm
[...] Second, the mining companies own the minerals once they pay the states royalties. [...]
In Australia, we are good at deceiving ourselves….. — Winds Of Jihad By SheikYerMami
31 May 12 at 1:00 pm
Skuter,
My radar was pinged 7 years back when I was travelling on the train from Perth to Fremantle and overheard some public servants discussing implementing the carbon trading and emissions system. That’s when I started getting interested in the IPCC etc and discovered I wasn’t paying attention.
Louis Hissink
31 May 12 at 5:28 pm
It is tempting to say that Gillard is a hypocrite, as are all politicians and she is just preaching to her feral constituency when she mouths this crap; and that different things will be said in private to the corps.
But really, on the evidence, Gillard and this government are as their feral constituency and stupid enough to believe this.
My understanding of exploration licences is that you own nothing until you successfully convert that licence to a mining lease.
cohenite
31 May 12 at 6:49 pm
Correction; an exploration licence is a right in rem which can be onsold; but the right is with licence not the possible existence of the minerals.
cohenite
31 May 12 at 6:51 pm
an exploration licence is not a ‘right in rem’
Its probably property, but it does not ‘attach to the land’, maybe a statutory form of property… Even though you can on sell it, provided you get approval by the State .
The Courts don’t even really know what a mining/exploration , licence, lease, claim is….
Julia got the law nearly correct… The States have property in the minerals, Miners have ownership when it is severed from the land, Cth can charge taxes, the states cannot that is why they claim a royalty BUT;
Wouldn’t it be great if the government was really a ‘trustee’, we could get the pollies to pay back all the money they will squander when they get those ‘super profit’ taxes.
confused
31 May 12 at 8:03 pm
Louis
My ears pricked in 1995 when a couple of earnest scientists turned in Darwin wanting to know how many cattle there were in the NT so they could work out how much methane they burped. When asked if they intended to tax cow burps n farts they went ashen. We gave them a BER rough number and the told them that the number of buffs was unknown.
They were very unhappy that we didn’t seem to take them seriously.
Pickles
31 May 12 at 8:17 pm
The licence is defined by the land it covers and the minerals it specifies; I don’t see how it could be other than a right in rem.
cohenite
31 May 12 at 9:05 pm