WA pastoral leases to expire mid-2015: implications for resource companies

All pastoral leases in Western Australia granted under the Land Act 1933 (WA) (now repealed) are set to expire on 30 June 2015. Although the vast majority of leaseholders have a conditional right to renew their pastoral leases on and from 1 July 2015, there are aspects of the renewal process that may affect land access agreements between leaseholders and resource companies.

This article identifies key issues that may be relevant to resource companies.

A conditional right of renewal

Existing pastoral leaseholders do not have an automatic right to renew their leases from 1 July 2015. Most leaseholders will only be able to renew their leases if:

• they have complied with their existing lease conditions, including stocking requirements and maintenance of infrastructure;
• there are no outstanding Soil Conservation Notices or other orders by the Soil and Land Conservation Commissioner; and
• there are no unfulfilled requirements of the Soil and Land Conservation Commissioner or the Pastoral Lands Board in relation to compliance with lease conditions under the Soil and Land Conservation Act 1945 (WA) or the Land Administration Act 1997 (WA).

All eligible leaseholders should have been contacted by the Western Australian Department of Lands (Department) earlier this year in a letter addressing any outstanding compliance issues that may result in the non-renewal of a pastoral lease, or confirming that the pastoral lease will be renewed subject to continued compliance with the requisite conditions.

In addition, 23 pastoral leases will not be eligible for renewal due to viability considerations. The affected leaseholders should have been informed of their non-eligibility by the Department.

Exclusion areas

Another aspect of the renewals process is the excision of "exclusion areas" from pastoral leases.

In 2002, the Department identified areas of land that will be excluded from pastoral leases upon renewal in 2015 for the purposes of public works, conservation, national parks, nature reserves or other Government purposes.

There are approximately 75 pastoral leases that will be affected by exclusion areas when they are renewed. The renewal of each of these affected leases is conditional upon the relevant leaseholder agreeing to the exclusion area being excised from the pastoral lease.

Expiry of caveats, mortgages, subleases, memorials and other encumbrances

A third aspect of the renewals process is the automatic expiry on 30 June 2015 of all encumbrances against pastoral leases that are registered on the title, including caveats, mortgages, subleases and memorials.

Any such encumbrances may be reregistered against the relevant pastoral lease after 1 July 2015, though ministerial approval will be required before mortgages and subleases can be registered against renewed pastoral leases.

Implications for resource companies

If a resource company has a land access agreement with a leaseholder, it should consider how the renewal process might affect its access rights and compensation obligations under that agreement.

For instance:

• Will the lease be renewed on and from 1 July 2015?
• Will any land be excised from the pastoral lease and how might this affect access rights and compensation obligations?
• Do you have an encumbrance registered against a pastoral lease which will need to be re-registered against a pastoral lease?