The regulation introduces several defined terms and operational concepts that interact with the Act. A “royalty period” is defined by cross-reference to section 428 of the Act; it is the period for which royalty is calculated. The “landed value” of a mineral is the value used to compute royalty under section 432 of the Act, referred to in clause 12’s formula (4% of that value). The regulation does not define “landed value” itself; that is in the Act. “Unused mining property” means property (including a structure or equipment) that has been brought into coastal waters for use in offshore exploration or mining activities but is not being used and is not intended to be used in accordance with a licence. This definition is subjective in part: the holder’s intention as to future use is determinative. If the holder says it intends to use the property later, that may take it out of the definition, even if it is currently idle. The Minister may challenge that intention, but the definition places the holder in a position of self-assessment. The ballot procedure (Part 3) introduces the concepts of “applicant” (including an authorised representative) and “delegate” (a person employed in or agent of Regional NSW authorised by the Secretary). The prescribed time for simultaneous applications is 30 minutes (clause 6), which is very short; if two applications are received more than 30 minutes apart, they are not treated as simultaneous and the earlier one prevails. The drawing of lots itself is a detailed ritual: seven days’ notice, written names on identical paper, examination by those present, folding in the same manner, placement in a non-snag receptacle, drawing by a person who is not an applicant or delegate and who is unanimously agreed upon. This is designed to prevent allegations of bias, but it also means any single applicant can veto the drawer if they are present; if an applicant does not attend, the draw proceeds without them. The “restoration of environment” part gives the Minister power to direct removal of unused mining property and to direct rehabilitation. There is no threshold (e.g. significant damage or risk to the environment) expressed in the regulation; the power is exercisable in the Minister’s discretion. The cost recovery provisions allow deductions from any security held under the Act for the licence. The royalty rate is fixed at a flat 4% of landed value; no provision for reduced rates for low-grade ores, high-cost operations, or capital-intensive projects. The record-keeping obligations require the holder to maintain quantity and value data for minerals recovered, disposed of, and held at beginning and end of each royalty period, plus a record of royalty payable. This is a standard accounting obligation but imposes compliance cost on operators who produce multiple mineral types or sell to related parties, since “value” must be recorded and presumably verified. The fees for registry services are not set in the regulation; they are determined by the Minister with Treasurer concurrence. That means the fee level is at the Minister’s discretion, subject only to the Treasurer’s concurrence, and can be changed without amending the regulation.

The regulation directly affects all holders and former holders of exploration licences, retention licences, and mining licences issued under the Offshore Minerals Act 1999 for NSW coastal waters. It also affects applicants for those licences, especially when two or more apply for the same block at the same time; they become participants in the ballot prescribed by Part 3. The Minister for Resources (or the delegate) is the decision-maker under Part 4 for removal and rehabilitation directions, and under clause 14 for fee setting. Regional NSW (formerly the Department of Industry) administers the ballot and holds the registry; its employees or agents may act as delegates or be appointed to conduct draws. The Treasurer must concur with any fee determination. The Secretary of Regional NSW authorises delegates for the ballot. Other persons who may be affected include parties who purchase unused mining property at public auction or by private treaty under clause 10; they acquire title subject to the removal costs being already deducted from the proceeds, and the Minister may direct that the balance be paid to someone other than the former holder. That introduces risk for purchasers if the holder has unpaid obligations. The regulation also affects contractors and subcontractors who bring property into coastal waters for use under a licence; because the definition of “unused mining property” refers to property brought in “for use in offshore exploration or mining activities” and that use is under a licence, a contractor might be treated as a holder’s agent and become subject to directions indirectly. The saving provision (clause 17) ensures that acts done under the old 2013 regulation continue to have effect, so existing property removal directions, rehabilitation notices, and fee determinations remain valid, affecting the same parties. The record-keeping obligations under Part 5 impose ongoing compliance costs on licence holders; these costs are passed through to shareholders and, ultimately, to consumers of the minerals. The 4% royalty is a direct cost on production: it reduces the net revenue per tonne, which may affect the viability of marginal deposits. The Minister’s power to sell unused property by private treaty after an unsuccessful auction introduces an element of discretion; the holder or former holder may be unable to control the sale price or which buyer is chosen. This affects the holder’s residual interest, because the balance only returns after costs are deducted, and the Minister may decide it goes to a person the Minister considers more entitled. Someone claiming an interest through a different security or transaction may be affected if the Minister uses this power.

The regulation imposes several duties on licence holders. The primary duty is under clause 13: a mining licence holder must keep records of all minerals recovered, including quantity of minerals recovered each royalty period, quantity and value of minerals disposed of (whether by sale or otherwise) each period, quantity and value held at beginning and end of each period, and records of all royalty payable. This is an ongoing obligation; failure to keep adequate records may make it impossible to self-assess royalty accurately, exposing the holder to underpayment. There is no duty in the regulation to pay royalty; that duty arises from the Act. The duty to keep records is supplementary and facilitates verification. A further duty arises if a direction is given under Part 4: the holder or former holder must remove unused mining property within the period specified in the direction (clause 9) or take specified rehabilitation steps (clause 11). Non-compliance triggers the Minister’s power to step in and recover costs from security. The rights of licence holders include the right to receive at least seven days’ notice of a ballot (clause 7(2)), the right to examine the papers before the draw (clause 7(5)), and the right to agree or object to the person who will draw the papers (clause 7(8)(b)). If an applicant does not attend, the draw proceeds without them, but that applicant is not entitled to examine or object (clause 7(3)). The holder or former holder also has a right to be paid the balance of proceeds from sale of unused mining property after deduction of removal and disposal costs (clause 10(4)). However, that right is qualified: the Minister may decide that someone else is more entitled. This is a discretionary power that cuts against the holder’s property interest; it is not a judicial determination, and there is no appeal mechanism stated in the regulation. The holder also has a right to an extension of time for removal or rehabilitation if the Minister grants it (clauses 9(2) and 11(2)). The Minister has the right to copy documents produced under section 370 of the Act (clause 15) and to test or analyse samples given under section 371 (clause 16). These rights are enforceable by the Minister or an inspector, and the regulation does not place any limit on how many copies or tests may be taken, nor whether the holder is entitled to a portion of the sample. The Minister’s fee-setting power under clause 14 is a right to determine prescribed fees, but only with the Treasurer’s concurrence; this is a constraint against arbitrary setting.

The regulation itself does not create any offences or penalties. It is a subordinate instrument that operates under the Offshore Minerals Act 1999, which contains the primary enforcement mechanisms. The regulation provides enforcement through indirect means: cost recovery and asset seizure. If a person fails to comply with a direction to remove unused mining property, the Minister may cause the property to be removed and sold by public auction, with costs deducted from the proceeds (clause 10). If the proceeds are insufficient, the deficiency is not pursued under this regulation; the clause says that proceeds are to be applied in meeting costs (clause 10(5)), but there is no express power to recover the shortfall from the holder as a debt. However, the Minister may hold security under the Act; for rehabilitation directions, clause 11(4) expressly allows costs and expenses to be deducted from any amount of security held by the Minister under the Act in relation to the licence. That is a more direct enforcement tool: the holder’s financial security is reduced by the cost of rehabilitation. There is no requirement in the regulation for the holder to top up the security after it is drawn down, but that may be a condition of the licence under the Act. The ballot procedure does not carry penalties; if an applicant fails to attend, they simply lose the chance to influence the draw, but the draw proceeds without them. Failure to keep records under clause 13 is not penalised in the regulation, but under the Act it could be an offence or grounds for licence cancellation. The regulation also does not prescribe any penalty for making a false or misleading entry in records; the Act would cover that. The Minister’s power to take copies and test samples (clauses 15, 16) is not subject to any penalty for refusal; however, section 370 and 371 of the Act likely create obligations to produce documents and give samples, and the regulation merely confirms the right to copy and test. In summary, enforcement is largely through the Act’s offence provisions and through the Minister’s ability to use the holder’s security to pay for remedial work. The cost of removal and disposal is borne by the holder, but the procedure is self-help by the Minister rather than a court-ordered penalty. This shifts the burden of proof: the Minister may act first and the holder must challenge the exercise of power later. The Minister also has discretion over the balance of sale proceeds; if the Minister incorrectly decides that another person is more entitled, the holder’s only recourse would be judicial review, which is costly.

The regulation is made under the Offshore Minerals Act 1999 (NSW) and must be read consistently with that Act. Section 54(1)(e)(ii), 138(1)(e)(ii), and 199(1)(e)(ii) of the Act require applications for licences to be accompanied by such maps as are prescribed; clause 4 fulfills that prescription. Sections 58(2)(b) and 203(2)(b) of the Act allow the regulations to prescribe a time within which multiple applications must be received to be considered simultaneous; clause 6 sets that time at 30 minutes. Sections 58(2) and 203(2) allow the regulations to prescribe the way of drawing lots; clause 7 does so. Section 430(1) of the Act allows the regulations to prescribe the royalty rate; clause 12 sets 4%. Sections 332, 338, 339, 340, 357, 358, and 359 of the Act allow the regulations to prescribe fees; clause 14 provides for the Minister to determine those fees with Treasurer concurrence, rather than fixing an amount. The regulation also interacts with the Interpretation Act 1987 (NSW) for definitional matters, and with the Government Sector Employment Act 2013 for the meaning of “Public Service agency”. The Subordinate Legislation Act 1989 governs the lifecycle of subordinate legislation; the regulation was made to replace the 2013 regulation, which would otherwise have been repealed automatically under section 10(2) of that Act. The saving provision (clause 17) preserves acts done under the repealed 2013 regulation, ensuring continuity of directions, fees, and other administrative acts. Interaction with environmental legislation is not explicit in the regulation, but Part 4’s removal and rehabilitation powers may intersect with the Protection of the Environment Operations Act 1997, the Marine Estate Management Act 2014, and the Environment Protection and Biodiversity Conservation Act 1999 (Cth) for activities in coastal waters. The Minister’s power to direct rehabilitation is not conditioned on any assessment under those Acts; the regulation operates independently. The definition of “unused mining property” does not require any finding of environmental harm; property may be required to be removed even if it poses no risk. The interaction with property law arises in clause 10(4): the Minister may pay the balance of sale proceeds to a person other than the holder who appears to the Minister to be “more entitled”. This is a discretionary administrative power that overrides the usual property rights of the owner. It could conflict with security interests held by banks or other creditors under the Personal Property Securities Act 2009 (Cth). The regulation does not require the Minister to investigate those interests before determining who is more entitled. There is no interaction with the Commonwealth’s Offshore Minerals Act 1994 (Cth) because the NSW Act applies to state coastal waters under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) arrangements? Actually, the NSW Offshore Minerals Act 1999 applies to coastal waters as defined. But the regulation does not mention any commonwealth legislation; the interaction is implicit from the constitutional allocation of offshore areas.

The Offshore Minerals Regulation 2020 was published on the NSW legislation website on a date that is its commencement (clause 2). It repealed and replaced the Offshore Minerals Regulation 2013, which would otherwise have been repealed on 1 September 2020 under section 10(2) of the Subordinate Legislation Act 1989. The 2013 Regulation was itself made under the same Act. The 2020 Regulation is thus a re-making of the subordinate legislation to prevent automatic expiry. There is no amendment history provided in the source because the 2020 Regulation is the current version; no amendments have been made to it in the text supplied. The saving provision in clause 17(2) ensures that any act, matter, or thing that had effect under the 2013 Regulation continues under the 2020 Regulation. This is a standard rollover provision; it means that directions to remove property, rehabilitation notices, fee determinations, and ballot results issued under the earlier regulation remain valid. The regulation itself does not amend the Act; it is made under it. The fee clause (14) is notable because it does not prescribe fixed amounts; instead it allows the Minister to determine fees with Treasurer concurrence. That means the fee schedule can be changed by administrative action without amending the regulation, so the fees in force as of the regulation’s commencement may have been set under the 2013 Regulation and continue under the saving provision. Over time, the Minister may issue new fee determinations. The royalty rate of 4% (clause 12) is the same as was likely in the 2013 Regulation; the regulation does not state whether it changed. No transitional provisions beyond the saving clause are provided. The 2020 Regulation appears to be a substantially clean re-make, with no new substantive obligations beyond the 2013 Regulation. The map requirement (clause 4) is taken from the earlier regulation. The ballot procedures (Part 3) were present in the 2013 Regulation. Part 4 restoration provisions are unchanged. The record-keeping requirement (clause 13) is identical to the previous. The only structural difference might be the fee clause’s flexible mechanism; but the 2013 Regulation likely had a similar provision.

The source text does not mention any litigation history. No cases interpreting the Offshore Minerals Regulation 2020 are cited in the regulation itself. The regulation is new (commenced in 2020) and concerns a specialised area; litigation is likely rare. The analogous provisions in the 2013 Regulation may have been the subject of judicial review, but there is no reference. Potentially, challenges could arise under the ballot procedure if the drawing was not conducted as prescribed (e.g. if the receptacle could snag the papers, or if the drawer was not acceptable). The Minister’s power to direct removal of unused mining property and to sell it by private treaty after an auction could be challenged on administrative law grounds: whether the property was in fact “unused” within the definition (subjective intention), whether the direction was procedurally fair, and whether the Minister properly determined who was “more entitled” to the balance. The fee-setting power could be challenged if the Minister set a fee that was not reasonable or if the Treasurer’s concurrence was not actually obtained. However, to date no reported litigation is known from the text. The regulation is not retrospective; it commences on publication. The saving provision may be challenged if an action under the 2013 Regulation is arguably inconsistent with the 2020 Regulation, but the provision is designed to avoid that. In terms of disputes, the royalty rate is fixed; disputes over “landed value” would be under the Act, not the regulation. The record-keeping requirement may be enforced through the Act’s compliance provisions, but litigation over record adequacy is possible. Practitioners should be aware that the regulation does not provide an internal review mechanism for Ministerial decisions under Part 4, so any challenge must go to the NSW Civil and Administrative Tribunal or the Supreme Court under the relevant rules. The absence of a statutory merits review means that the discretion is wide and the holder’s only likely ground is jurisdictional error or unreasonableness in the administrative law sense.

Several provisions contain traps for the unwary. First, the definition of “unused mining property” in clause 8 depends on the holder’s intention: property is unused if it is not being used and is not intended to be used in accordance with a licence. If a holder stores equipment but says it intends to use it later for a different block, that may not qualify as “unused”. A change of plans could bring property within the definition instantly. The holder bears the risk of misjudging its own intention. Second, the Minister’s power to sell unused property by public auction and then by private treaty (clause 10(1)-(2)) means that if the property fails to sell at auction, the Minister can sell it without further notice to the holder and at a price the Minister accepts. The holder may lose the property for a fraction of its value, and the balance after costs is paid out only at the Minister’s discretion as to who is “more entitled”. That discretion is not constrained by any criteria. Third, the fee amounts are not set in the regulation. Clause 14 allows the Minister to determine fees with Treasurer concurrence. A licence holder who needs a certified copy of a document or wishes to register a transfer must pay whatever fee the Minister has most recently determined. There is no publication requirement in the regulation; the holder may need to inquire. Fourth, the prescribed time for multiple applications is only 30 minutes (clause 6). This is extremely short. An application received 31 minutes after another will be treated as later and the ballot provisions do not apply; the earlier application has priority. This creates an incentive for applicants to lodge very close together to trigger the ballot, but also a risk of losing priority if the second is just a few minutes late. Fifth, the ballot procedure requires that the drawer be agreed upon by all applicants present. If one applicant refuses to agree to any proposed drawer, the draw cannot proceed? The regulation says the person must be declared in writing by each applicant present and the delegate to be acceptable. If there is no agreement, the procedure stalls. The regulation does not provide a fallback. However, the Minister may have an implied power to conduct the draw in another manner, but that is not stated. Sixth, the rehabilitation direction under clause 11 allows the Minister to deduct costs and expenses from any security held under the Act. But the Act may require the holder to maintain a certain level of security; if the Minister draws down on it, the holder may need to replenish it immediately or risk licence suspension. The regulation does not address that. Seventh, clause 15 allows the Minister or an inspector to take a copy of any document produced under section 370. There is no restriction on retention or use of that copy; it could be used for compliance or prosecution. And clause 16 allows testing or analysis of samples; the holder is not entitled to a portion of the sample or to witness the test. The results could be used as evidence without the holder having an independent analysis. Eight, the saving provision in clause 17(2) states that any act, matter, or thing that had effect under the 2013 Regulation continues under the 2020 Regulation. That includes fee determinations made under the old regulation. If a holder assumed the old fee determination was automatically superseded, they might underpay. It also includes directions to remove property that were given before the commencement; those directions remain enforceable under the new regulation.

Compliance requires attention to several distinct obligations. For mining licence holders subject to the royalty and record-keeping provisions (Part 5), the first step is to establish a system that captures, for each royalty period, the quantity of minerals recovered, the quantity and value of minerals disposed of (by sale or otherwise), the quantity and value held at the beginning and end of the period, and a calculation of royalty payable at 4% of landed value. “Value” should be determined in accordance with the Act’s definition of landed value; if minerals are sold to a related party, the holder should ensure the value is arm’s length or risk an adjustment. Records must be kept; electronic records are likely acceptable, but the regulation does not specify a retention period. Best practice is to retain records for at least the period of any limitation under the Act. The fee for inspection of the register or registration of documents is not fixed; the holder must contact the Minister (or consult the Department’s website) to ascertain the current fee before submitting a document. The concurrent approval of the Treasurer should have been obtained; the holder may wish to confirm that the fee was properly set. For applicants for licences, the map requirement under clause 4 is technical: each map must be a 1:1,000,000 series published by Regional NSW (or a similar map if that series is unavailable) and must show the relevant blocks with distinctive colour tinting or edging. A map that does not meet this standard may render the application invalid. When multiple applications are lodged for the same block, the applicant must be aware that the prescribed time is 30 minutes; if the second application is received more than 30 minutes after the first, the first has priority. If within 30 minutes, a ballot will be conducted. The applicant should ensure that the delegate receives at least seven days’ notice of the draw; the applicant should attend or have a written authorised representative. At the draw, the applicant should examine the papers and participate in selection of the drawer. If the applicant cannot agree, the draw may be delayed; but the regulation does not provide a mechanism for override, so it is in each applicant’s interest to agree to a neutral person. For holders or former holders who have brought property into coastal waters, compliance with Part 4 requires ongoing monitoring of whether property is unused within the meaning of clause 8. If property becomes unused (e.g., after drilling is completed and no future use is intended), the holder should proactively remove it to avoid a direction. If a direction is received, the holder must remove it within the period specified, or seek an extension in writing. The holder should document any intention to reuse property and maintain evidence (e.g., a written plan or maintenance schedule) to show that property is not unused. For rehabilitation directions, the holder must take the steps specified within the period. If the holder believes the direction is unreasonable or impossible, they should request an extension or negotiate alternative steps. The holder should ensure that security held by the Minister is adequate to cover potential costs of removal and rehabilitation; drawing down on security will reduce that cushion, and the holder may need to replenish it under the licence conditions. Finally, with respect to the saving provision, any compliance actions taken under the 2013 Regulation (such as a fee schedule or a removal direction) remain in force. Holders should not assume that the 2020 Regulation creates a clean slate; they should check the existing status of any directions or determinations.