Mining Company Tarnishes the Industry’s Reputation

2 Jul 2020

The Select Committee into Mining on Pinjin Station report (Pinjin Report) was presented to Parliament on May 2020 by Hon Robin Scott MLC (Chairman) (remember this name as it is important later in the story) to  review the protracted dispute between Tisala Pty Ltd (Tisala), an Aboriginal Pastoral Company owned by Leo and Lawrence Thomas, operating on the Pinjin Pastoral Lease, and Hawthorn Resources Ltd (Hawthorn). All facts stated in this blog are extracted from the Pinjin Report. The full Report can be viewed here

Pinjin Station Map

First some background – Pinjin Pastoral Station existed since the 1890’s and has been owned by Tisala since 1991. Pinjin Station is 127,135 hectares in size and is located 170 north east of Kalgoorlie. Within the station’s boundaries is located Reserve 10041, a common to water stock and graze animals. In 1966 the Pinjin Homestead was relocated with a notable lack of authorisation to Reserve 10041 along with other buildings, sheds, stockyards, windmills, pipelines, fencing and an airstrip. It should be noted, that unauthorised pastoral homesteads located on reserves in WA is not uncommon, with up to a dozen known occurrences. By 2018 the grazing of cattle had ceased and during the period of dispute, residence at the homestead was sporadic.

Since 2008 Tisala was aware of its lack of Reserve ownership. In 2016, Shire of Menzies became the management body for the Reserve, who in 2016 consented to Tisala’s occupation at Tisala’s request. This consent had no statutory approval and Tisala has no registered lease, sublease or licence to the reserve, nor has the Reserve 10041 been merged into the Pinjin Pastoral Lease.  Nonetheless, all relevant government departments were aware of the homestead’s location on the Reserve, and the Pastoral Board even consented to $800,000 of improvements to the dwellings on the Reserve.

Hawthorn is a Victorian registered company, that in 2013 was 37% owned by Chinese registered companies. Hawthorn and Gell assumed ownership of Mining Lease 31/79 with a 70% and 30% share respectively. M31/79 was named Trouser Legs because the mining lease looked like a pair of trousers. In the 1980s, open pit mining operations were conducted on Common Reserve 10041. The site of these operations was in a near identical position to the current mining operations.  M31/79 was over the area of Reserve 10041 and along with the Pinjin Homestead, had a small resource of 36,000 oz gold. By 2019 the mine was at full capacity and employed 50 full time employees trucking ore to a nearby mine for processing.

Exploration on M31/79 commenced in 2008 through to late 2013 with good relations between the parties. In 2013 Hawthorn applied for a miscellaneous licence for a haul road that Mr L. Thomas objected to, which was delayed 2 years until an agreement was reached just before the Wardens hearing. It was during this period that the relationship between the parties deteriorated.

Something worth remembering is that the Thomas family had viewed Hawthorn’s Trouser Legs Mining Proposal and were fully aware that the Homestead was on the Reserve and that they had no protection from the Mining Act. In particular there was no protection from s20, that did not allow mining or exploration within 400 metres of pastoral lease infrastructure and within 100 metres of a homestead without consent. So, they had no legal bargaining power other than lodging an Objection to the miscellaneous licences grant, which they took full advantage of and delayed in numerous ways for 2 years. In this period Hawthorn and Tisala contacted each other 300 times by email and meetings.

During this time the Thomas family were using the services of and being advised by Mr Steven Kean, Mr Nicholas Cukela, Gerard Brewer (who died in June 2018) and several other people.  Mr Kean is a prospector, Electoral Officer for the Hon Robin Scott MLC (the Chairman of the parliamentary committee looking into this matter) and spokesman for ‘Goldfields First’ an organisation representing prospectors and small miners. One might assume that Mr Kean would have the sympathy of the parliamentary committee because of his close relationship with Hon Scott, though the Inquiry stated said he was kept at arm’s length and insulated from any correspondence.  Mr Cukela was a neighbouring pastoralist, who managed to obtain a 2/5 interest in the Pinjin station as payment for unpaid debt. However, the interest was relinquished on the request of Mr Kean.

The mining operations were delayed for 5 years with numerous attempts to settle. Settlement payments where offered seven times and fluctuated from an initial offer of $550K in 2014, down to $170K and no claims for costs in 2017, then lastly to $550k in 2019. Each offer required Tisala to vacate the homestead. Important to note here is that during the period 2009 to 2017, $580k was spent on the Homestead and supporting infrastructure as reported to the Pastoral Board.

In 2016, Tisala requested the Department of Lands to incorporate the Reserve into the Pinjin Pastoral Lease. Department of Lands referred this to DMIRS, (who consulted with Hawthorn and Gel) who supplied a Ministerial briefing to the Minister, that the Inquiry advised was biased against Tisala and lacked rigour regarding investigation and veracity of Hawthorn’s assertions, to quote:

“The Committee is of the view that the ministerial briefing note did not fully and accurately reflect the circumstances that existed at the time.”

The Minister subsequently refused the application.

Tisala made many written complaints to the Minister for Mines concerning Hawthorn’s

removal of decrepit infrastructure that was on the Reserve. Members of Parliament made representations to the Minister about the mining activity at Pinjin Station including moving or destroying tanks, pipelines, windmills, fences and equipment. Tisala and DMIRS was of the opinion that s20(5) of the Mining Act would protect Tisala’s infrastructure on the Reserve. Section s20(5) states that:

“Notwithstanding that any Crown land to which this subsection refers may be marked out as or be included in a mining tenement, a mining tenement or Miner’s Right does not entitle the holder thereof to prospect or fossick on, explore, or mine on or under, or otherwise interfere with, any Crown land that is —

  (a) for the time being under crop, or which is situated within 100 m thereof;

 (b) used as or situated within 100 m of a yard, stockyard, garden, cultivated field, orchard, vineyard, plantation, airstrip or airfield;

  (c)  situated within 100 m of any land that is in actual occupation and on which a house or other substantial building is erected;  …”

This held up Hawthorn’s Mining Proposal until DMIRS was instructed otherwise by the State Solicitors Office, which was to the effect that s20(5) did not apply to the infrastructure and was not a relevant consideration for the Department in making an environmental assessment of a mining proposal and approving a mine.

In 2017, Hawthorn and Gel obtained an interim injunction to prevent interference and began proceedings against Tisala alleging interference with their mining operations. To quote Mr Kerr the Managing Director of Hawthorn:

“…actions by Tisala and its advisors have included, but not limited to, erection of temporary fences across access tracks within the Crown Common Reserve Mine footprint, parking vehicles in the path of operating plant and equipment (requiring shutdown and demobilisation of equipment) and intruding within advertised blast areas at nominated blast times (past clear signposting and despite verbal warnings from site personnel).

… There is a pattern of “run us through a legal process for as long as possible”, the JV [joint venture], with many, many questions; them saying they are not prepared; them saying they need more time for legal counsel; them saying there is a religious period coming up or an Indigenous period coming up or something coming up. We have been five years in this treadmill of delay, delay, delay and in all of our matters, with the exception of going to the Warden’s Court, they couldn’t revert at the last minute. The Warden’s Court matter had to go on because we’d just run out of options with our partners. We were going to go broke if we couldn’t get a decision to mine. That is why we needed to pursue it to the end. We could never seem to get to a discussion where they would want to sit down and say, “We’re ready to go.” Ten or 15 different groups and people have tried and tried heroically to get us all to sit down and agree, but this is basically a commercial dispute between two parties what we’re talking about. We have tried like hell. It is very frustrating. …

… One of the things that just does my mind sitting here as managing director and in charge of the JV is that we have this comedy of we have got to tell them what we are doing, which is we do it by law. We tell them what we are doing, then someone comes out and takes land nearby the haul road, or someone pegs something or someone does something. Then it even gets better: “He is not associated with us; he has got nothing to do with us.” They cannot use our insider information, which is what they are getting, to enhance or better themselves. Basic tenement of law. “Oh, this person is not related.”’

Once Hawthorn received approval to mine it was not able to mine without breaching Condition 21 of the Approval to Mine, which is to minimise dust. Hawthorn failed to minimise dust and suffered a $40,000 fine in lieu of forfeiture of a mining lease.

“Many emails from Tisala called upon the DMIRS to take action in relation to dust, including that it issue stop work orders and forfeit the mining lease for breach of the relevant conditions.”

As a result of the complaints DMIRS visited the mine site 12 times. Tisala also provided a lot of video evidence to enable Hawthorn to be prosecuted.

Sometime between the evening of 21 June and the morning of 22 June 2018, merely two days after the Warden handed down his decision concerning section 20(5), some racist signs were erected at and around the Pinjin Homestead. Over the next few days, photographs of the signs began appearing in the local and national press. This, reflected very poorly on Hawthorn. SBS news article

The injunction and the police investigation are still on foot so we will only quote the Inquiry’s findings, as follows:

FINDING 25 The racist signs were not removed immediately when discovered and had to be removed by the Western Australia Police Force several days later.

FINDING 26 The presence of the signs received extensive media coverage with several photographs published.

FINDING 27 Joint venture personnel cooperated with the Western Australia Police Force requests in order to further the investigation. Similar levels of cooperation were not demonstrated by Tisala Pty Ltd’s supporters.

FINDING 29 There is insufficient evidence and an absence of obvious motive to suggest that the joint venture was responsible for the erection of the racist signs at Pinjin Station.

So how did we get in to this mess? A mess that not only includes this situation, but also comprises the recent unfortunate events around Australia’s heritage sites.  The reality is that we are perpetuating an industry reputation of being bad neighbours. After the inquiry all parties are no better off than when they commenced.

Tisala managed to delay the mine development for 5 years without the Pinjin Pastoral station having any tenure and was a constant thorn in the side of Hawthorn.  Hawthorn, was continually frustrated and failed to manage the situation, being continually out manoeuvred by Mr Thomas, Mr Kean, Mr Cukela and Mr Brewer.  Hawthorn still has adverse relations with its neighbours, and is poorly regarded by the community. Thanks to this, Hawthorn’s reputation is severely diminished and will probably have difficultly dealing with the community on any other project in Australia.  It did itself a huge disservice by negotiating in the manner it did. Firstly, hanging over their heads is the strong chance that the Reserve will be turned into a pastoral lease by the legislation of parliament. Secondly, some other environmental fine might be imposed. Thirdly, it still has to deal with an appeal to the Supreme Court.

To this day we have mining operations affecting the lives and well-being of pastoralists without any end in sight.  The Thomas’ are left with the noise of trucks, loaders, drilling and blasting, and 24 hour lights next to their homestead, which has been made fundamentally inhabitable –with more mining to continue.

So, we are left with a mine that in any other situation would never have been permitted in the first place.  The Mining Act is clear – under section 20, there is no mining permitted within 400 meters of a bore and 100 m from a homestead or building. Warden O’Sullivan ruled that the structures on Crown Reserves were not part of the pastoral lease, hence s20 did not apply.

DMIRS has allowed mining to proceed based on the constraints of the Mining Act and Regulations.  The Department of Lands denied applications to incorporate the reserve into the pastoral lease.  Meanwhile a Parliamentary Select Committee found that while processes need to be tightened up at the Departments, there is nothing that could have been done to resolve the dispute between Tisala and Hawthorn. The fact is that  the mine is too close to where people live and their associated water infrastructure –but no one is able to do anything about it.

This whole affair reflects badly on the mining industry. Firstly, it gives the public and affected communities a bad image of the industry that figuratively bulldozes over the civil rights of the community.  Secondly, this makes investors wary of investing in the industry were mining projects could be held up by extraordinary amounts of time, with full knowledge that the government is not assisting the miners to encourage investment in the industry.

Unaware of what actually transpired between the parties, one can’t help but wonder that if Hawthorn personnel were more knowledgeable about mining and environmental law, it might have led to better outcomes for all.

To be forewarned is to be forearmed. If you want to educate yourself or your team about mining, environmental and/or heritage compliance, to be better prepared to manage adverse tenure situations, consider attending LandTrack Systems series of courses:

Practical Tenement Management

Advanced Tenement Management

Environment Essentials

Navigating Exploration Agreements

LandTrack Systems also has a tenement/agreement/environment management system that is indispensable in assisting management tracking situations like those outlined in this article.