As discussed in the preceding news item, new legislation came into effect on 1 December 2015 to amend the Foreign Acquisition and Takeovers Act 1975 (Cth) (as amended, the Act).
Under the Act, a distinction is made between exploration tenements and mining and production tenements. An exploration tenement is generally not considered an interest in Australian land under the Act and consequently an acquisition of an interest in an exploration tenement by a foreign person is not a significant or notifiable action, regardless of the value of the tenement. However, if the exploration tenement is likely to exceed 5 years (including any renewals and extensions) and gives the tenement holder the right to occupy the underlying land, then the acquisition of the interest in the land may be a significant and notifiable action depending on the type of underlying land.
A mining or production tenement is considered a type of Australian land under the Act. A foreign person’s acquisition of an interest in a mining or production tenement is therefore a significant and notifiable action under the Act unless the tenement is acquired directly from the Australian government. There is no monetary threshold applicable to these types of acquisitions, meaning a $0 threshold applies, except for non-government investors from certain free trade agreement countries (Chile, New Zealand and the US – a threshold of A$1,094 million applies).
As interests in mining and production tenements are considered interests in Australian land under the Act, Australian mining companies may also be considered Australian land corporations for the purposes of the Act. This means that an acquisition of securities in an Australian mining company may be a significant and notifiable action.
As discussed in the preceding news item, additional regulation applies to the acquisition of mining tenements by foreign government investors.