The inside line on McPhillamys mine

Prospects were golden for Regis Resources (ASX: RRL) at the start of August. With the McPhillamys definitive feasibility study (DFS) completed and final investment decision (FID) expected to be made in early CY26, Regis Resources had seemingly checked all the boxes for the $1b mine.

The NSW gold project was expected to be a valuable asset, featuring a 7mtpa plant with 189moz contained gold and 60.6mt milled, with an expected mine life of over 10 years.

This vision was quickly extinguished on August 16, when the Federal Environment and Water Minister Tanya Plibersek made a declaration of protection over part of the approved McPhillamys gold project site.

Minister Plibersek says her decision is not to stop the mine and that protecting cultural heritage and development are not mutually exclusive.

On the contrary, Regis says this decision makes the mine non-viable.

The situation was further mired, when Minister Plibersek championed a 12,000ha solar farm in the Northern Territory, approved shortly after the McPhillamys decision, putting into question transparency in Federal decision making.

The Australian Mining Review speaks with Federal Shadow Indigenous Australians Minister and Northern Territory Senator Jacinta Nampijinpa Price, Minerals Council of Australia (MCA) chief executive Tania Constable and WA Chamber of Minerals and Energy (CME) chief executive Rebecca Tomkinson to understand the fallout of Minister Plibersek’s decision.

McPhillamys’ unclear future

Minister Pilbersek says she made the partial declaration under Section 10 of the Aboriginal and Torres Strait Islander Heritage Protection (ATSIHP) Act 1984 to protect a significant Aboriginal heritage site near Blayney, in central west NSW, from being destroyed to build a tailings dam for the gold project.

“The [Belubula River] headwaters are of particular significance to Wiradjuri/Wiradyuri people and are linked to ongoing cultural practices of the area,” she said.

“They have featured in many traditions practiced for generations including by Aboriginal people transitioning from youth to young adulthood.

“Some of these traditions have been disclosed to me privately and must remain confidential due to their cultural sensitivity.

“If this site were to be desecrated, it would be a threat to the continuance of Wiradjuri/Wiradyuri culture.”

In a statement following Minister Plibersek’s decision, Regis Resources chief executive Jim Beyer said Regis was extremely surprised and disappointed that, after a nearly four-year, protracted Section 10 assessment process, the Minister had concluded there were grounds to block the development of the McPhillamys gold project.

“This has effectively overridden the conclusions on this question that were already determined by the NSW Independent Planning Commission (IPC) and Minister Plibersek on approving the project under the Environmental Protection and Biodiversity Conservation Act 1999 (EPBC Act),” he said.

“The referral made by Regis under the EPBC Act included an assessment of Aboriginal cultural heritage, which at that time, the Minister’s delegate did not note as a point of concern for the project.

“The recently released DFS demonstrates that the project has significant value, both for Regis and as an economic contributor to the local community and to all levels of government in the form of jobs, infrastructure, skills and training, procurement, council rates, state and federal taxes and royalties.”

Regis’ next steps

Regis has been forced to update its approach to McPhillamys by withdrawing the project outcomes of the DFS, taking out a non-cash impairment of $192m and withdrawing the ore reserves previously associated with the project.

Mr Beyer says the required restart of the approvals process with the State and Federal Governments could take between 5-10 years, with no certainty of a viable alternative being realised.

“Following the surprising and disappointing Section 10 Declaration by Minister Plibersek last week, Regis has commenced an assessment of the impacts on the economic value of our business,” he said.

“The Section 10 Declaration has resulted in the loss of planned access to tailings storage facility (TSF) area.

“This has made the project in its current form unviable.

“To advance any form of realistic and approvable alternative TSF solution requires further extensive investigations and studies along with the restart of the state and federal approvals processes.”

“Beholden to ideology”

Stakeholders across public and private lines have called for an overhaul of legislative decision making.

Many voices that weighed in on the decision echoed the urgent need for transparency in decision making, especially for judgments with such widespread impacts and implications.

Senator Nampijinpa Price says the decision was ideologically driven and demonstrates the urgent need for legislative reform.

“The incidents don’t just call the decision-making process into question, they are clear evidence that the government is beholden to ideology at the expense of well-considered solutions, and it is the Australian people and our economy that suffer as a result,” she said.

“It is the same ideologically driven approach we saw from the Prime Minister when he tried to tell Indigenous Australians he cared about their economic development at Garma, but then limited that development to projects that would advance his renewables-only energy policy.

“This Government, including their continued funding of the Environmental Defenders Office (EDO) is using Indigenous people to achieve their own purposes, while claiming to care about their empowerment and land rights.

“Minister Plibersek has given disproportionately large consideration to the views of these few people over any other considerations.

“The Minister’s decision was poorly made when the significant benefit that would have accrued to the community is honestly weighed against the views of a group with tenuous links to the local Indigenous community.

“This decision demonstrates the urgent need for legislative reform.

“We need improved certainty when considering competing indigenous views on cultural heritage.

“The arbitrary weight that the Minister can attach to a specific group is incredibly problematic to investor confidence and poses barriers to projects that would otherwise allow Indigenous people to stand on their own two feet and realise the economic potential of their land.”

“A dangerous precedent”

The MCA was also disappointed by the Federal Government’s decision to intervene in the McPhillamys gold project, particularly given the involvement of the recognised Local Aboriginal Land Council (LALC).

Ms Constable comments on the decision.

“Australian mining plays a critical role in supporting host communities, and Indigenous engagement is at the forefront of our industry’s efforts,” she said.

“In 2022 alone, Australian mining engaged 488 Indigenous businesses, spending $949m, and directly employed 5,210 Indigenous people — representing approximately 6% of our total workforce.

“These are highly skilled, well-paid jobs that contribute directly to the [Federal] Government’s Closing the Gap outcomes.

“It is vital that the [Federal] Government provides transparency around the decision-making process.

“This project was a significant opportunity for economic development, and it is concerning that taxpayer funded activist groups such as the EDO have been allowed to derail it by undermining the voices of local Aboriginal communities who supported the project.

“Australian mineral companies work closely with Traditional Owners every day to identify, protect and promote cultural heritage, ensuring that the world’s oldest and longest continuing heritage is preserved for future generations.

“Federal interventions that override state level decisions and dismiss the input of local Aboriginal representatives risk setting a dangerous precedent.

“We urge the government to provide clarity and transparency regarding the decision-making process and ensure that future decisions reflect the voices of those who truly represent their communities.”

Aboriginal community consultation

Regis began seeking consultation on cultural heritage matters relevant to the project as early as 2016, with the Orange LALC (OLALC) involved throughout the process.

The OLALC had initially expressed concerns for several sites and artifacts of cultural significance, including the Belubula River headwaters.

However, in a 2023 submission to the NSW IPC, the group stated that the proposed development would not impact any known sites or artifacts of high significance and maintained a neutral position to the proposal.

The OLALC also said it was satisfied that the currently identified items of Aboriginal Cultural Heritage which would be impacted could be properly managed and protected.

Furthermore, the group stated that the NSW IPC should place condition on the project to ensure the appropriate protective measures are put in place in the future, in consultation with the appropriate OLALC representatives.

The Australian Mining Review has reached out to the OLALC and they have declined to comment.

“Certainty is critical”

Following Minister Plibersek’s decision, the WA CME acknowledged the ongoing uncertainty resulting from litigation and other activist actions which aimed to trigger 11^th hour reconsideration of project developments.

Ms Tomkinson says the CME has also advocated to the Federal Government for transparency in the consultation process and active engagement with the stakeholders who these reforms impact most.

“To maintain investor interest in WA projects, certainty is critical. And it’s important that any concerns raised by individuals or groups are considered in context of feedback from local stakeholders,” she said.

“By maintaining an open and inclusive dialogue, we can achieve a balanced approach that both safeguards heritage values and supports economic growth and prosperity.

“WA recently updated our cultural heritage legislation and it’s important that this and other state-based frameworks — which include early and upfront consultation with the local community — are understood early in the process of design to ensure changes do not result in increased duplication and uncertainty.”

Call for transparency and consistency

Minister Plibersek maintains that she has no problem with the gold mine going ahead, saying her decision on protection only concerns the tailings dam which accounts for 400ha of the 2,500ha project, or about 16% of the site — but this 400ha area was of no small concern for Regis.

Minister Plibersek’s Department was notified of Regis’ Section 10 application in October 2020.

Since then, Regis says the McPhillamys project has achieved development consent from the NSW IPC, following a multi-year process, with its finding being that any potential harm to Aboriginal heritage can be acceptably managed through conditions of consent.

The project was also assessed and approved in May 2023 by Minister Plibersek’s delegate under the EPBC Act, according to Regis.

Established pathways forward for project approvals are now unclear, not just for Regis, but across the industry, sparking concerns over potentially long-lasting and widespread implications.

While mining companies endeavour to remove needles from haystacks, their projects may still be swept up whichever way the wind blows.

Transparency and consistency throughout the approvals process is essential for industry to chart a course forward.