Poseidon Nickel Agreement Act 1971

The Act directly affects the State of Western Australia and the Company (Poseidon Limited and its successors, including Western Mining Corporation Limited and ultimately Poseidon Nickel Limited). The Company’s operations under the Agreement affected the Mount Windarra area, the town of Laverton, and the transport corridor from Malcolm to Fimiston (Kalgoorlie) and Esperance. The original agreement required the Company to construct and maintain private roads, pay half the cost of a public road connecting Kalgoorlie-Wiluna Road to the townsite, and contribute to railway upgrades. The Company was responsible for providing housing, water, electricity and community facilities for its workforce. Crown tenants (such as pastoral lessees) were affected by clause 3(b), which allowed the Company to enter Crown lands (including land subject to a pastoral lease) to the extent reasonably necessary. The townsite residents were affected by clause 21, which exempted Company-owned houses from State rent control and allowed eviction of occupants who ceased employment with the Company. Third parties such as the Railways Commission, the Esperance Port Authority, and the State Electricity Commission had obligations under the Agreement to provide services. Local authorities were affected by the zoning protection in clause 20 and the rating provisions in clause 24, which deemed all lands (except those with permanent residences or commercial undertakings unrelated to mining) to be valued on unimproved value for rating purposes. The termination agreement transfers the Mining Lease to the ordinary Mining Act 1978 regime, affecting the Department of Mines, industry regulation, and the Mining Rehabilitation Fund.

The Company’s key duties under the original Agreement included: submitting detailed proposals for stage one by 31 December 1971 (clause 4); commencing construction within six months of approval and completing works by 31 December 1972 (clause 7); constructing and maintaining private roads and excluding unauthorised users (clause 8); paying half the cost of the public road and contributing to railway upgrades (clauses 8(3) and 9); providing rolling stock if required (clause 9(9)); installing and operating power generation equipment (clause 10); searching for water and paying for water supply (clause 11); developing a town and providing housing and community facilities (clauses 13 and 14); providing port facilities at Esperance (clause 15); paying royalties under the Mining Act (clause 16); investigating the feasibility of a smelter within ten years (clause 17); using local labour and materials where reasonably practicable (clause 28); and indemnifying the State against third-party claims (clause 35). The State’s duties included: introducing and sponsoring the ratifying Bill (clause 3(a)); allowing entry on Crown lands (clause 3(b)); constructing the public road within specified timeframes (clause 8(2)); causing the Railways Commission to transport ore and nickel products at agreed freight rates (clause 9 and First Schedule); granting mineral leases (clause 12) and a special lease for the townsite (clause 13); assisting the Company to obtain easements for power lines (clause 10(4)); ensuring zoning protection (clause 20); and exempting the Company from stamp duty on the Agreement and related instruments for seven years (clause 34). The variation agreement (1985) introduced a Mining Lease under the Mining Act 1978 and exempted the Company from expenditure conditions on that lease. The termination agreement (2021) imposed duties to decommission and rehabilitate the Mine Rehabilitation Sites, and required the Company to provide a $3.5 million security under the Mining Act. The Company also retains rights under the termination agreement, including an indemnity from the State for pre-Operative Date activities, and the Mining Lease continues under the Mining Act with a right of renewal for one further term of 21 years.

The Act and the Agreement provide several enforcement mechanisms. Under clause 31, if the Company defaults in performing any covenant and fails to remedy the default within a reasonable time after notice (or, if the default is contested and referred to arbitration, within a reasonable time fixed by the award), the State may determine the Agreement by notice. The State may also itself remedy the default and recover the costs as a debt. If the Company abandons or repudiates its operations, or goes into liquidation (other than a voluntary reconstruction), the State may determine the Agreement. On cessation or determination, the Company loses all rights under the Agreement and related titles, must pay all moneys due, and railway works revert to the State without compensation (clause 32). Instead of determination for default, the State may step in and remedy the default at the Company’s expense. The arbitration clause (clause 40) provides for disputes to be referred to two arbitrators with an umpire, except where the Agreement expressly gives a discretionary power to the Minister. Under the termination agreement (Schedule 3), the Company indemnifies the State against third-party claims arising from works under the Principal Agreement, and this indemnity runs for up to 20 years after the cessation of operations. The $3.5 million security provided under clause 5(2) of the termination agreement is enforceable under the Mining Act for compliance with mining lease conditions, including decommissioning and rehabilitation. The Act itself does not create criminal penalties; enforcement is primarily contractual and through the arbitration mechanism. The Company’s liability for antecedent breach or default survives termination (clause 4(3) of the termination agreement).

The Act expressly overrides other legislation. Section 3 provides that the Agreement “shall operate and take effect notwithstanding any other Act or law”. Section 3A(2) and section 3B(2) repeat this override for the variation and termination agreements respectively, though they note that this is without limiting the Government Agreements Act 1979. The original Agreement modifies specific Acts: the Land Act 1933 is deemed modified by substituting a new subsection (2) of section 45A, deleting sections 116, 135 and 143, and including powers to offer land before townsite constitution (clause 13(3)). The Mining Act 1904 is overridden in several respects , for example, mineral leases are granted in the form of the Second Schedule rather than the standard form, and the term is 21 years with an option of renewal for a further 21 years (clause 12). Labour conditions under the Mining Act do not apply to the mineral leases (clause 22). The variation agreement (1985) updates references from the Mining Act 1904 to the Mining Act 1978 and introduces a new Mining Lease under that Act. The termination agreement transitions the Mining Lease to full operation under the Mining Act 1978, subject to specific modifications (section 82, section 82A, section 95) that are set out in clause 4(4)(f). The Mining Rehabilitation Fund Act 2012 applies from the Operative Date. The Rights in Water and Irrigation Act 1914 applies to water licences (clause 11(11) of the original agreement). The State agrees not to impose discriminatory taxes or rates (clause 26), and rating is deemed to be on unimproved value (clause 24). The Traffic Act 1919, Public Works Act 1902, Government Railways Act 1904, Local Government Act 1960, and the Esperance Port Authority Act 1968 are all referenced. The Corporations Act 2001 (Cth) is noted for execution of the termination agreement. The Arbitration Act 1895 governs dispute resolution.

The Act was originally enacted as Act No. 59 of 1971 and commenced on 15 December 1971. It was first amended by the Poseidon Nickel Agreement Amendment Act 1985 (No. 17 of 1985), which inserted section 3A (approving and ratifying the variation agreement set out in Schedule 2), amended the definition of “the Agreement” in section 2, and made consequential amendments to Schedule 1. The 1985 amendment reflected the assignment of Poseidon’s interests to Western Mining Corporation Limited and the need to update mining tenure references to the Mining Act 1978. A reprint was produced in 2008 consolidating those changes. The Standardisation of Formatting Act 2010 (No. 19 of 2010) made minor formatting amendments , it deleted a heading, updated the marginal note layout, and amended references to the Schedules. The most significant amendment was the Poseidon Nickel Agreement Amendment (Termination) Act 2022 (No. 3 of 2022), which inserted section 3B and Schedule 3 (the termination agreement), amended section 2 to include the definition of “termination agreement”, and updated the long title. The 2022 amendment came into operation on 2 March 2022 for the operative provisions (section 2(b)). The compilation table shows that the Act as at the current date includes all three Schedules. No judicial or further amendment history appears in the text. The Act is a compilation of a 1971 statute with specific, targeted amendments rather than ongoing revision.

The source text does not cite any litigation. The Act itself provides for arbitration under clause 40 of the original Agreement as the primary dispute resolution mechanism, with the Arbitration Act 1895 governing the process. Clause 5(2) allowed the Company to refer disputes about the reasonableness of Ministerial alterations or conditions on proposals to arbitration; if the award went against the Company, the Agreement could cease and determine unless the Company accepted the award within three months. Clause 17(4) provided a right of arbitration if the Company disagreed with the Minister’s opinion on smelter feasibility. The termination agreement (clause 3(4)-(6)) includes automatic termination provisions if the Bill is not passed by a certain date or if the Company submits new proposals under the Principal Agreement before the Operative Date , these are designed to avoid disputes. The absence of cited litigation may indicate that the contractual and legislative framework successfully avoided public court proceedings, or that any disputes were resolved through the arbitration channel or commercial negotiation. The Act’s override of other Acts (sections 3, 3A, 3B) would limit grounds for judicial review except possibly on constitutional or jurisdictional error. The Act is a special legislative instrument of a type that typically resorts to commercial arbitration rather than general court processes. No case names or judgments appear in the source.

Several provisions may trap unwary practitioners. First, the definition of “the Agreement” in section 2 includes the original agreement as added to, varied or cancelled under clause 37 , but the variation and termination agreements are separately defined as Schedules 2 and 3. A reader must check which agreement is being referenced in any given section. Second, clause 2(2) of the original agreement provides that if the ratifying Bill was not passed by 31 December 1971, the agreement would cease and determine with no claims between the parties , a sunset clause that still appears in the reprinted agreement. Third, the termination agreement (clause 3(6)) automatically terminates if the Company submits any new proposal under the Principal Agreement while it remains in force , a potentially surprising result if the Company contemplates further development before the Operative Date. Fourth, the indemnities in the termination agreement (clauses 4(6) and 4(7)) run for up to 20 years after the cessation of all operations, and the date of cessation is determined by the State if the parties cannot agree , the Company has no control over the endpoint of its liability. Fifth, the Bank Guarantee from 2006 is replaced by a $3.5 million security under the Mining Act, but the security is held in escrow until the Operative Date; if the termination agreement does not come into effect (e.g., if the Bill fails), the Bank Guarantee remains in force (clause 5(1) subject to subclauses (2) and (3)). Sixth, the Mining Lease is deemed to continue under the Mining Act 1978 but cannot be surrendered without the Minister’s consent (clause 4(4)(f)(iii) of the termination agreement, modifying section 95 of the Mining Act) , this is a permanent restriction. Seventh, the variation agreement deletes the definition of “Minister for Mines” and substitutes “Minister for Minerals and Energy” , but the original Agreement still uses “Minister for Mines” in many clauses; cross-referencing is essential. Eighth, the labour conditions exemption (clause 22) was deleted by the 1985 variation, so the Company is no longer exempt from Mining Act labour conditions for the Mining Lease.

For the termination agreement phase, the Company must first ensure the Bill to ratify the termination agreement is passed by Parliament; otherwise the termination cannot proceed. Once the Operative Date occurs, the Company must transition its Mining Lease from the State agreement regime to the Mining Act 1978. This includes lodging a $3.5 million security (clause 5(2) of the termination agreement) in a form acceptable under sections 84A(2) and 126 of the Mining Act. The Company must then comply with all Mining Act requirements, including the conditions set out in the Mining Lease Instrument as amended (see Schedule to the termination agreement). The Mining Proposal (document marked “A”) is deemed to be an approved mining proposal and mine closure plan under the Mining Act , the Company must operate in accordance with that proposal and plan. For decommissioning and rehabilitation of the Mine Rehabilitation Sites, the Company must follow the “Relevant Mine Closure Plan”, which at the Operative Date is the plan contained in the Mining Proposal. The Company must not surrender the Mining Lease without prior consent of the Minister. The ongoing indemnities under clauses 4(6) and 4(7) require the Company to maintain records and insurance for potential third-party claims arising from past and future operations for up to 20 years. The Company must also ensure it no longer relies on any rights or privileges conferred by the Principal Agreement (e.g., exemption from expenditure conditions, special rating, zoning protections). For the pre-termination period, compliance with the original Agreement is largely historical, but the Company remains liable for any antecedent breach or default under clause 4(3) of the termination agreement. Any dispute about these obligations is subject to the law of Western Australia. The Company should maintain clear documentation of the termination agreement’s ratification and the Minister’s endorsement of the amended Mining Lease Instrument.