Key Legal Risks in Tenement Sales: A WA Mining Guide

Tenement sales in Western Australia are common, but they carry significant legal risks that parties often overlook. Whether you're buying, selling, or farming-in, it pays to understand the regulatory landscape and the practical issues that can derail a transaction.

The regulatory landscape

Mining tenements in Western Australia are governed by the Mining Act 1978 (WA), administered by the Department of Energy, Mines, Industry Regulation and Safety (DEMIRS). Most transfers and certain dealings require ministerial consent, and tenements come with a range of conditions, expenditure obligations, and reporting requirements that affect their value and transferability.

Before any transaction proceeds, both parties need a clear picture of the regulatory framework that applies and the consents and approvals that will be required.

Key risks

Ministerial consent delays. Transfers of granted exploration and mining tenements typically require Ministerial approval. The process can take several months and is subject to administrative review. Buyers and sellers should factor this into transaction timelines and consider including specific completion mechanisms that accommodate the consent process.

Non-compliance history. A tenement with a poor compliance record (failure to meet expenditure conditions, late reporting, breach of conditions) may be flagged or refused transfer. Conduct compliance due diligence early.

Access and native title issues. Operating on a tenement requires access. Where access agreements or Indigenous Land Use Agreements (ILUAs) are not in place, project development can be delayed or blocked. Confirm the access position before committing to a price.

Unregistered agreements. Private royalty agreements, joint venture documents, and farm-in arrangements affecting the tenement may not appear on the public register. Comprehensive due diligence requires reviewing the seller's contracts and counterparty correspondence.

Heritage and environmental obligations. Heritage protection laws (state and federal) impose obligations on tenement holders, particularly in connection with ground disturbance and exploration activity. Environmental approvals may also be required for specific activities.

Due diligence checklist

A thorough buyer-side due diligence on a WA tenement typically covers:

• A search of the tenement register and DEMIRS filings
• Confirmation of expenditure history and compliance
• Review of all existing agreements (joint ventures, royalties, farm-ins, access agreements, ILUAs)
• Confirmation of encumbrances, mortgages and caveats
• Review of all reporting submitted in the last several years
• Heritage and environmental approvals status
• Native title position (claim status, ILUAs, future act compliance)

Drafting the sale agreement

Tenement sale agreements should be tailored to the specifics of the asset, not adapted from generic templates. Key drafting issues include:

• Conditions precedent for Ministerial consent
• Risk allocation pending consent (who bears the cost of expenditure between signing and completion?)
• Treatment of any retention or extension applications in process
• Warranties about compliance, expenditure, registers and unregistered agreements
• Indemnities for known issues (such as heritage matters or expenditure shortfalls)
• Mechanism for completion if consent is delayed

A note on overlapping titles

Where tenements overlap with other title regimes (pastoral leases, freehold land, conservation reserves, marine areas), additional considerations apply. Review the title position carefully, particularly for tenements outside the most heavily prospected regions.

How Luma Legal can help

We advise on tenement transactions across the full spectrum, from junior exploration deals to large project portfolios. We coordinate with technical advisers, manage the Ministerial consent process, and draft tailored sale documentation. Our role is to identify and manage the risks that generic templates do not capture.