The peak body for exploration companies has demanded compensation from the Northern Territory government after it repealed licenses granted to three miners when it prohibited seabed mining off Groote Eylandt.
Traditional owners won an environmental and cultural battle to ban seabed mining around Groote Eylandt in the Gulf of Carpentaria after the state government issued a complete ban earlier this year.
The ban made eleven offshore licenses held by BHP Billiton, Perth-based listed miner Northern Manganese and Brisbane unlisted explorer Yukida Resourses, null.
Now the Association of Mining and Exploration Companies (AMEC) are challenging the NT government’s proclamation of being “open for business” after its decision to ban seabed mining.
AMEC chief executive Simon Bennison said the Giles’ government decision could set a negative precedent and said the three companies impacted must receive compensation.
“These people have been given an entitlement and I don’t think any of these explorers should have their entitlements revoked without some form of compensation,” he said.
“It will be critically important to get the owners of those companies in the room and consult properly with them so that there’s a very clear understanding of what the government is willing to do and how some of the concerns of the stakeholder groups can be managed.”
The Australian reported Northern Manganese has already filed a compensation claim with the NT government.
Yukida Resources is doing the same and said the company had lost the backing of a potential foreign investor.
Bennison also noted the “open for business” lost credibility since the NT government had brought in an environmental levy this year.
The government aims to raise money to clean up polluted legacy mine sites through the levy. Companies have to pay the levy in addition to the environmental bond.
“We really do question their commentary about being open for business when other states are providing a far more competitive environment for exploration companies in particular, let alone the smaller producers,” Bennison said.
The former Labor government in NT implemented a three-year moratorium on extending manganese mining into the sea due to traditional owners’ fears of the environmental and cultural impacts.
Groote Eylandt’s economy is almost completely reliant on production and royalties from the large Gemco land-based mine.
Gemco exports around five million tonnes of manganese a year, which is used to make steel.