King of the Castle: Landowners Block Victorian Miner’s Exploration Play

In Barfuss Corporation Pty Ltd v King & Anor [2025] VSC 487, the Victorian Supreme Court ruled that the mining licence holder’s proposed diamond core drilling was not “low impact exploration” under the Mineral Resources (Sustainable Development) Act 1990 (Vic) (the Act). As a result, a work plan for that drilling was required and the consent and compensation provisions of the Act applied.

Background

Barfuss Corporation Pty Ltd (Barfuss) holds a mining licence over privately-owned land in Swifts Creek (Property) upon which it wished to eventually undertake underground gold mining. The Property was originally alienated by way of a Crown Grant which expressly recorded reservations permitting mining by the holder of a miner’s right or licence. The landowners primarily use the Property for grazing sheep.

Barfuss sought a declaration that the diamond core drilling and mineral sampling it proposed to undertake was ‘low impact exploration’ within the meaning of s 4 and Schedule 4A of the Act. Pursuant to s 40(2)(a) of the Act, a licensee who proposes to only carry out ‘low impact exploration work’ is not required to comply with the requirement in s 40(1) to lodge a work plan, unless the Department Head declares otherwise. 

The Act defines ‘exploration’ as:

exploration for minerals and includes –

(a) conducting geological, geophysical and geochemical surveys; and

(b) drilling; and

(c) taking samples for the purposes of chemical or other analysis; and

(d) extracting minerals from land, other than for the purpose of producing them commercially; and

(e) in relation to an exploration licence, anything else (except mining) that is specified in the licence.¹

The Act defines ‘low impact exploration’ as, relevantly:

exploration that does not involve any of the following—

(a) the use of explosives;

[paragraphs (b) to (e) refer to various activities involving the taking of certain flora or fauna which are not relevant for present purposes]

[paragraphs (f) to (h) refer to the removal or damaging of certain native trees and vegetation which are not relevant for present purposes]

(i) the creation of any road, structure or hardstand area without the consent of the owner or occupier of the land on which it is created;

(j) the use of any closed road without the consent of the owner or occupier of the land on which the road is located, or undertaking works on any road without the consent of the owner or occupier of the land on which the road is located;

(k) ground intrusive work that— 

(i) is within 200 metres of a waterway; or

(ii) is on a slope steeper than 1 vertical : 3 horizontal; or

(iii) is of greater than 2 hectares in an area of cultural heritage sensitivity during either the term of the licence or a period of 5 years from the grant of the licence, whichever ends first; or

(iv) involves taking water from an aquifer, hydraulic fracturing, or excavation using heavy earth moving equipment.²

Proposed activity

Barfuss asserted its proposed diamond core drilling and mineral sampling was ‘low impact exploration’ for which no work plan was required, and which was not ‘work’ which was required to comply with the other requirements of s 42.

The Court disagreed. The Court found the diamond core drilling program was not low impact exploration because it:

1. required the creation of hardstand areas (defined as ‘ an open ground area with a prepared surface that is used for storing material and standing vehicles’³) for the operation of the drill rig, without the consent of the defendant landowners.  This finding was based on Barfuss’s expert evidence that ‘small, horizontal cleared areas’ would be required to set up the drill rig; and
2. would require the use of closed roads on the Property, without the consent of the defendants. 

Nor was the Court satisfied that all of the proposed drill sites were on slopes less than 1 vertical : 3 horizontal. 

Accordingly, the proposed work did not fall within the exemption provided for in s 40(2) of the Act, as the proposed work fell outside the definition of ‘low impact exploration’ and Barfuss was required to lodge a work plan prior to carrying out any work under the licence. 

The Court also found that Barfuss’s proposed diamond drilling program (consisting of 50 holes for 9,000m over nine or ten months) was not required for Barfuss to prepare a mining work plan as required by the Act and Barfuss’s mining licence.  This constituted another unsatisfied prerequisite to the declaration Barfuss sought.

Definition of “work”

The Court went on to consider whether s 42(1) of the Act applies to ‘low impact exploration work’ (notwithstanding finding that Barfuss’s proposed work did not qualify as ‘low impact exploration work’).

Under s 42(1) , a licensee must comply with certain matters before carrying out ‘work’ on the land covered by the licence. Relevantly, s 42(1) provides:

1. The holder of a mining licence or prospecting licence must not carry out any work on the land covered the licence unless –

(a) the licensee has an approved work plan if required under this Act; and
…

(h) if the land affected is private land –

(i) the licensee has obtained the written consent of the owners and occupiers of the land affected; or
(ii) the licensee has made and registered compensation agreements with those owners and occupiers; or
(iii) the amount of compensation payable to those owners and occupiers has been determined under Part 8; or
(iv) the licensee has purchased the land affected.

The Court found that s 42(1), save for s 42(1)(a), will apply to “low impact exploration work” to the extent that it falls within ‘work on the land’ in the open words of s 42(1). The requirement for a work plan in 42(1)(a) does not apply to ‘low impact exploration work’ because of the express exclusion in s 40(2). The other requirements of s 42(1), including the requirements for private landowner consent and compensation in s 42(1)(h), apply to “low impact exploration work”.  While it was not necessary to exhaustively define work in this matter, the Court found:

• excavation and drilling using mechanised equipment, such as Barfuss’s proposed diamond core drilling and the use of the excavator to prepare the drill pads required for that drilling, constitutes work;
• activity involving the removal of, or damage to, native vegetation constitutes work; but
• excavation using non-mechanised equipment and drilling using hand tools do not constitute work, for the purposes of s 42(1) of the Act. 

The Court drew a distinction between “low impact exploration” and “low impact exploration work”; while both were exempted from the requirements of a work plan, only the former was exempt from the payment of a rehabilitation bond.

Other comments

The Court queried (without determining) whether, in the circumstances of Barfuss’s case, an exploration licence would have been the more appropriate tenement to apply for, given the work it sought to undertake was exploration, rather than mining.

The Court was also critical of Barfuss’s failure to diligently meet its obligations pursuant to the Act and mining licence, and its failure to progress those parts of the work plan that did not depend on its proposed drilling and sampling.  The Court cited this as a further reason that it would not grant the injunction Barfuss sought to access the Property. 

Implications

Barfuss’s troubles indicate the importance of careful planning of the work to be undertaken, identifying the most appropriate licence to facilitate that work, and careful consideration of the statutory pre-requisites to the proposed work.  Early engagement with stakeholders is also essential to successful mine development.  This decision highlights the limited scope of activities that will be permitted over Victorian private land without a work plan, landowner consent, and agreement or a determination of compensation with the owners and occupiers of the land.

Footnotes

1. Section 4(1).
2. Act, Schedule 4A, clause 1.
3. Act, Schedule 4A, clause 2.