PERTH (miningweekly.com) - The Queensland Resources Council (QRC) on Friday warned that cash bidding on exploration tenures in the state would disadvantage small miners and would undermine the community’s confidence in the government’s role as steward of the state’s resources.

QRC CEO Michael Roche said in a statement that neither the Australian Labour Party nor the Liberal National Party government in Queensland had been prepared to allow a debate around this policy.

“No policy consultation paper has ever been released. Therefore, the only opportunity open to the QRC and other interested stakeholders has been to make a submission to the parliamentary committee examining the Bill that authorises cash bidding,” he said.

“If cash bidding for exploration tenures is such a fabulous reform, why has the New South Wales Coalition government abandoned the policy?” Roche questioned.

Reacting to allegations made by Queensland Natural Resources and Mines Minister Andrew Cripps, who claimed the QRC had labelled the practice corrupt, Roche said that nowhere had the QRC spoken about corruption in the same breath as it had spoken about this policy, adding that the industry body did have grave concerns about the implications for community confidence.

“We have spoken of the implied ‘moral hazard’ of governments accepting large payments from a proponent at the exploration stage and then being expected to adjudicate objectively on a subsequent application from that same proponent for production tenure.

“Disappointingly, today’s statement by the Minister again fails to acknowledge that the Bill also allows for the option of cash bidding for minerals tenures, not just coal and coal-seam gas.”

Cripps said in a statement on Friday that the Newman government was proposing a competitive cash tender process for the allocation of exploration rights for some of Queensland’s best coal and petroleum and gas reserves.

“Companies will still have to prove they have the capacity to develop the resources in a timely fashion, and will need to demonstrate their commitment by participating in a cash bidding process for that land. 

“The system will ensure all Queenslanders enjoy a financial return from the development of the state’s most valuable resource areas and will discourage the past practice of companies ‘warehousing’ tenure.”

Cripps emphasised that cash bidding would only apply to the most highly prospective resource tenure in Queensland.

“It is very important that industry understands that greenfield sites will continue to be released through noncash competitive bidding processes to ensure ongoing opportunities for smaller exploration companies to identify and develop resources in Queensland,” he said.

The QRC pointed out that, when the Minister announced the policy in November last year, mention was only made of highly prospective coal and petroleum and gas areas, with Roche adding that there was no mention that minerals such as copper, nickel or zinc were also captured by this reform.

“The option for inclusion of minerals had to be uncovered by a close reading of the Bill,” he added.

The Mining and Other Legislation Amendment Bill 2012, proposing the competitive cash tender process, had been referred to the Parliamentary Committee for Agriculture, Resources and Environment.