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Exploration licence and regulation

An exploration licence gives the licence holder exclusive rights to explore for petroleum or specific minerals within a designated area but it does not permit mining, nor does it guarantee a mining or production lease will be granted.

All new coal mines, petroleum production leases and mineral sand mines, other large mines and any mines in environmentally sensitive areas of State Significance are classified as State Significant Development and are subject to the Environmental Planning and Assessment Act 1979.

These projects require assessment and approval before they can commence. An application needs to be lodged with the NSW Department of Planning, Industry and Environment and requires an Environmental Impact Statement (EIS) to be prepared. The EIS is a comprehensive document that covers issues such as air quality, noise, transport, flora and fauna on the site, surface- and ground-water management, methods of mining, landscape management and rehabilitation. Extensive public consultation requirements are also associated with this process, with community members encouraged to make submissions on the application.

NSW Department of Planning, Industry and Environment is one of a number of key government agencies who are consulted as part of the approval process for new coal, mineral and petroleum developments.

What is exploration?

The purpose of exploration is to locate areas where mineral and petroleum resources may be present, to establish the quality and quantity of those resources, and to investigate the viability of extracting the resource.

Before exploring for minerals or petroleum in NSW, an explorer must first obtain an Exploration Licence (EL) under the Mining Act 1992 or a Petroleum Exploration Licence (PEL) under the Petroleum (Onshore) Act 1991. These licences are approved and regulated by NSW Department of Planning, Industry and Environment.

An exploration licence gives the licence holder the exclusive right to explore for petroleum or for specific minerals or petroleum within a designated area, but does not permit mining, nor does it guarantee that a mining or production lease will be granted. Only a very small percentage of land that is subject to exploration licences ever proceeds to a mine.

Types of exploration activities

There is a range of activities that may be undertaken as part of an exploration program. These activities are dependent on a number of factors, including the nature of the mineral being sought and the geology of the area. Exploration generally starts from low impact activities to determine whether signs of minerals or petroleum are evident before progressing to more intense and costly activities like drilling and bulk sampling.

Exploration activities may include, but are not limited to:

Geological mapping

Geological mapping is typically undertaken by walking over the ground of interest. Geologists observe the location, orientation and characteristics of rocks or sediments exposed at the land surface. This information can then be used to prepare a geological map of the exploration area, recording the rock types and structures.

Geochemical surveys

Geochemical surveys are generally undertaken to target areas for further exploration. The surveys usually involve the collection of sampling of soils, rocks and/or sediments. These samples are sent for chemical analysis at a laboratory.

Soil sampling is usually undertaken using hand-held tools such as shovels, picks and hand augers to collect samples of soil and subsoil. Samples are usually collected on a regular grid pattern and involve collection of small (approximately one kilogram) samples of soil. Holes excavated during the program are typically back-filled immediately following sampling.

Geophysical surveys

Geophysical surveys assist in mapping different rock types and can help identify resources without the need for direct observation. Different geophysical surveys measure various physical properties of the earth and have different applications and equipment. Geophysical surveys can be conducted from the air, at surface, and down drill holes. They include:

Airborne surveys

Airborne geophysical surveys may comprise magnetic, radiometric, gravity or electromagnetic surveys. These surveys provide general geological information for an area and are often used in the initial stages of exploration. These surveys are typically undertaken using low flying helicopters or light aircraft which fly in a grid pattern. The instruments may be either mounted on the aircraft or towed underneath a helicopter. Depending on the type of survey, the aircraft may fly between 25 and 60 metres above the ground, with flight lines spaced between 25 and 200 metres apart.

Ground-based surveys

Seismic surveys

Seismic surveys measure variation in reflected ground vibration as it passes through the earth. The surveys use an energy source to create the high frequency vibrations, which can be truck-mounted vibrating weights or a simple hammer hit depending on the scale of the survey. Small sensors are linked by cables and spread either side of the source to detect and relay the vibrations as they return to the surface. Seismic surveys provide information about rocks down to depths of several kilometres and are particularly suited to flat-lying sedimentary basins. They are most often used in petroleum and coal exploration.

Magnetic surveys

Magnetic surveys measure the variations of the Earth's magnetic field due to the presence of magnetic minerals. Subtle variations in the abundance of magnetic minerals are used to interpret rock types and can assist in identifying resources.

These surveys are typically undertaken by a geophysical technician on foot carrying a magnetometer and a sensor on a pole. They are most often used in metallic mineral exploration.

Radiometric surveys

Radiometric surveys measure gamma rays which are continuously being emitted from the earth by natural decomposition of some common radiogenic minerals.

The surveys focus on recording the isotopes of potassium, thorium and uranium. Generally most gamma rays emanate from the top 30 centimetres of rock or soil which can detected by airborne surveys or on surface rocks using a hand-held spectrometer. They are most often used in metallic and industrial mineral exploration.

Gravity surveys

The gravity field is measured with a gravimeter to determine variations in rock density in the Earth's crust. Ground gravity surveys require a geophysical technician to take gravity measurements at set intervals of distance and record the precise height at each location. Access to the recording sites can be by vehicle or helicopter, depending upon remoteness. They are used in mineral and energy exploration.

IP surveys

Induced Polarisation (IP) surveys induce an electric field in the ground and measure the chargeability and resistivity of the subsurface. The technique can identify differences in resistivity arising from aquifers, metallic minerals and stratigraphy. Readings are taken by a small crew who shift a ground array of transmission and receiver cables. They are most often used in metallic mineral exploration.

EM surveys

Electromagnetic (EM) surveys induce an electromagnetic field and measure the three dimensional variations in conductivity within the near-surface soil and rock. Conductive units can be studied to locate metallic minerals, and to understand groundwater and salinity. Ground readings are taken by a small crew who shift a ground array of transmission and receiver cables. They are most often used in metallic mineral exploration.


Drilling is often conducted as part of an exploration program to obtain detailed information about the rock below the ground surface. The drilling method used depends on the type of rock and information sought. The degree of disturbance around the hole varies with each method, however, strict environmental safeguards ensure all drill sites are rehabilitated after the completion of drilling.

Shallow drilling

Auger Drilling - This method uses either a hand-held power auger or one mounted on a small vehicle. It is not dissimilar to a post hole digger used by farmers when fencing.

Air Drilling - There are two main shallow air drilling methods, aircore and rotary air blast. These methods usually involve a utility or small truck mounted rig with an air compressor carried onboard or towed separately. This type of drilling creates rock fragments (chips). These are removed from the drillhole by compressed air, which is forced down the drill hole and lifts the rock chips to the surface. This type of drilling requires minimal site preparation and rehabilitation.

Deep drilling

Air Drilling - There are two main types of air drilling used to drill deeper holes, namely open hole percussion and reverse circulation. These methods usually involve truck mounted rigs with one or two support vehicles to carry drill rods and air compressor capacity. These drilling techniques produce rock chips that are lifted to the surface by compressed air and do not necessarily require significant site preparation and rehabilitation.

Diamond Drilling - A truck mounted rig with support vehicles is used to extract a continuous cylinder of rock. Diamond drilling involves the use of water and drilling fluids that are contained in either an in-ground sump or above ground tanks, and requires significant site preparation and rehabilitation. Most exploration for coal and minerals uses a combination of diamond and reverse circulation drilling.

Rotary Mud Drilling

Rotary mud drilling is most often used for petroleum and deep stratigraphic drilling. This method produces fine rock fragments and uses water and drilling fluids to lubricate the drill bit and return the rock fragments to the surface. The drilling fluids are contained in either in-ground sumps or above ground tanks. The drilling rigs are usually larger than for other methods and require more support vehicles and site preparation.

Bulk sampling operations

Prior to making a decision to apply to develop a mine, an explorer may extract a bulk sample of the material to be mined to allow further testing and refinement of the proposed mining procedures. Extraction of a bulk sample in NSW requires approval from NSW Department of Planning, Industry and Environment. Large samples may also require approval from the Department of Planning, Industry and Environment.

Regulation of approved exploration activities

Exploration licences are granted subject to standard and/or special conditions, including strict environmental management conditions to protect native vegetation, fauna, land, water resources, heritage and community values.

The conditions regulate the type of exploration that can be carried out and where these activities may occur. Under the current category system, exploration activities identified as having minimal environmental impact can be carried out without further approval from NSW Department of Planning, Industry and Environment. Routine exploration activities in non-sensitive areas generally have a low impact and any impacts are of a temporary nature.

Higher intensity activities, activities in sensitive areas or activities that have the potential to affect threatened species or ecological communities require further approval. There are stringent assessment processes in place for approval of these types of activities. Proponents are required to prepare and submit a Review of Environmental Factors (REF) that addresses all potential impacts of the proposal, including potential impacts on the environment and the community. For projects falling under Part 5 of the Environmental Planning and Assessment Act 1979 (EP&A Act), the Division must examine and take into account all matters that will or are likely to affect the environment. Any exploration that is likely to have an unacceptable impact on the environment will not be approved.

Licence holders are also subject to a statutory prohibition on carrying out activities within 200 metres of a residence without the consent of the land holder and resident.

Licence holders are also required to rehabilitate areas disturbed by exploration activities and must provide security sufficient to cover the likely rehabilitation costs in the event that they default on this obligation.

These processes allow for all environmental issues, including impacts to natural features and water resources, to be rigorously addressed and managed.