New Personal Properties Securities Act – property and asset ownership challenges facing the Australian mining industry and its potential impact on JV partnerships
Under a new property-focused federal legislation being proposed, the mining and resources sector potentially run the risk of losing ownership rights on key mining assets. This act, coming into effect within the next few months, would require that miners that own either directly or indirectly through joint venture partnerships key operational assets, to have a good understanding of the assets under question. This Act, Personal Properties Securities Act (PPSA), has specific relevance to those projects at Commonwealth level.
The Act replaces State, Territory and Commonwealth property security registers. The very complexity of joint venture (JV) agreements and other wide-ranging contractual arrangements common across mining, dictates that earlier compliance could prevent significant financial disputation.
The new law is a total rewrite of how ownership of personal property needs to be documented and registered. This brings with it, significant new obligations on resources participants to clearly register exactly where their ownership interests lie in a project, Joint Venture or their company.
The definition of “personal property” relating to the mining industry could include the following:
- Plant, material and equipment
- Stockpiles- inferred and/ or indicated
- Confidential data, which could be a very valuable part of a
JV’s property pool , and
- Certain contractual rights held by parties to the JV.
Whenever a mining or JV or exploration party owning personal property enabled another party to have possession of that property, the owner needs to understand its obligations vis a vie registering its interest on the PPS Register or potentially risk losing its interest in the property altogether.
It is recommended that miners ensure they have sound property registration vehicles capturing the relevant data on a PPSA register. Miners should take the lead in doing so and not wait until forced to do so. By undertaking for example an asset audit, it would go a long way in identifying those property resources and instruments that could have a demonstrable impact on mining companies operations.
Cordev is keen to assist discussing how you obtain property security and fulfil your registration obligations. We also commend the resources of Lovegrove solicitors in particular Professor Lovegrove and Justin Cotton who can address legal queries on point.