Whilst a utilisation of the defendants' approved TSF by PMI is not explicitly dealt with under the terms of the SFA, nevertheless, a broad policy theme found in the SFA of PMI proceeding by the SFA to design, construct, then finally operate and manage its secondary processing plant, 'at its sole cost' (by reference to cl 3.1 of the SFA) is pervasive.
...
On the basis that PMI was to independently operate its own plant as a secondary Super Fines processing operation on the defendants' tenements, I assess it is both reasonable and equitable that PMI would do so at its sole cost. That must mean that PMI would pay to the defendants a reasonable commercial fee, appropriate for PMI's utilisation of Area One, and for any TSF that PMI would use subsequent to Area One.
There remains a question as to whether (with proper notice and sufficient time for PMI to pursue all required approval arrangements) the defendants might choose to simply identify an area on their tenements as potentially suitable for use by PMI as PMI's exclusive TSF, but then leave it to PMI to seek and obtain all necessary approvals and expend whatever capital is necessary to establish a workable TSF at that site ... In my view, the answer to this question must be, 'no'.
... In my view, Consolidated must bear the cost of sterilising an area for ultimate site use as a TSF by PMI, since it is Consolidated who must reach the decision as to what areas across the considerable area of the Woodie Woodie tenement holdings that they plan to mine. But aside from the issue of area sterilisation cost, I see no valid reason why PMI ought not to ultimately reimburse Consolidated for the capital costs of an actual establishment of any TSF, which PMI is to exclusively use. To the extent that PMI may share a TSF with Consolidated, then the capital and operative costs involved would be apportioned between them, on a reasonable proportionate volume usage basis, that could be assessed by a third party in the absence of a consensus between the parties.
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Ultimately, the defendants carry the non-delegatable rehabilitation responsibility for these TSF areas on their tenements. Because of that responsibility, it is simply not feasible or appropriate in my assessment, for the defendants to relinquish hands-on control of a TSF site, to PMI.
It is one thing for Consolidated to seek to recoup reasonable capital and operating costs of providing TSF benefits to PMI on a commercial basis, which I would assess as permissible under the philosophy of the SFA. It is quite another, however, to effectively require PMI to essentially establish itself an approved TSF on Consolidated's tenements, once Consolidated identify, then sterilise a potentially suitable TSF site for PMI's exclusive use. Greater responsibility and involvement, in my view, is required of the defendants regarding any TSF to be established on its tenements, irrespective of who the user(s) of that TSF happen to be. (emphasis added)