By Melanie Burton
MELBOURNE (Reuters) - Wiradjuri elder Nyree Reynolds calls her home west of Sydney the valley of the Bilabula, the Indigenous name for its river. The river features in Wiradjuri stories about the creation of their land, she told state planning regulators, "And no one has the right to destroy this."
On her objections, the Australian government in August ordered miner Regis Resources to find a new dam site for a A$1 billion ($685 million) gold project on the grounds its proposed location for storing rock and chemical waste would irreparably harm culture attached to the river.
The decision by Environment Minister Tanya Plibersek under a rarely used Aboriginal heritage protection law has stoked an outcry from mining groups who say Regis followed all legal processes and the decision raises sovereign risk for developers.
The government's action adds to the uncertainty miners have faced since iron ore giant Rio Tinto (ASX:RIO) legally destroyed ancient Aboriginal rock shelters at Juukan Gorge four years ago and raises the urgency to overhaul heritage protection laws.
At least three other resources projects are facing review, like Regis did, under Section 10 of the law that allows Aboriginal people to apply to protect areas important to them when other legal avenues have failed.
"You can get all the state environmental approvals, all the federal environmental approvals and at the end of the process a Section 10, ... essentially a federal minister can ... make your project unviable," said Warren Pearce, CEO of the Association of Mining and Exploration Companies. "That's the definition of sovereign risk."
While Reynolds objected to Regis' mine, a local Aboriginal group representing Wiradjuri people, authorised by the state to speak for cultural heritage, had concluded that impacts from the project could be managed.
Regis said in August it is considering its legal options after writing down the value of its project by more than $100 million.
The decision on Regis' project was the second by the government in as many months to back Indigenous groups over miners.
ERA, majority owned by mining giant Rio Tinto, is suing the government on procedural fairness grounds after it did not renew the miner's exploration lease on uranium rich land.
Government officials and some investors say developers need to engage earlier and more deeply with Indigenous groups when planning projects, but new laws governing heritage protection that would assist the process are yet to arrive.
The government has not said when it expects to finalise the legislation. Only Western Australia has made some heritage reforms, leaving the industry relying on a patchwork of old state legislation to manage heritage protection at a time when Australia is marketing itself as a supplier of ethical metals.
VOTES AT STAKE
Resources projects with outstanding Section 10 objections include miner Bellevue Gold's plan to dig under a desert lake and Woodside's Scarborough natural gas project that will feed a gas plant in a region rich in ancient rock art that the government has nominated for a UNESCO World Heritage listing. Both projects are in Western Australia.
But not all objections are equal when it comes to politics, especially with the centre-left Labor government facing an election in 2025.
Woodside is unlikely to face the same setback as Regis, said MST Marquee senior energy analyst Saul Kavonic, as the $12.5 billion Scarborough gas project is "extremely politically important to the Labor government in Western Australia".
Plibersek's office said it could not comment on the Scarborough project as the issue is under consideration.
Both Woodside and Bellevue said they take their responsibilities to manage Aboriginal cultural heritage seriously.
Bellevue said it has permission from the Tjiwarl native title group to dig under the lake as part of a heritage management plan.
The government's action comes after it failed in a referendum last year that sought to give Indigenous Australians special recognition in the country's constitution and an advisory voice to lawmakers.
Some people think the government is now acting to appease inner city east coast voters who backed the referendum and who may want to vote for the Greens rather than support mining.
"Here is a government trying to scramble to make itself look good, because it absolutely gutted the opportunity for us to have a voice in Parliament," said Wonnarua man Scott Franks, who has filed three section 10s against developments in the state's coal rich Hunter Valley region and lost them all.
When asked if she was catering to Green voters with her decision on Regis, Plibersek told reporters on Aug. 28 that she had consulted widely: "I made the decision based on facts."
Australia's minister for Indigenous Australians, Malarndirri McCarthy, said the government was working hard with Aboriginal groups on new heritage protection laws.
"The Australian Government is deeply concerned about the destruction of First Nations heritage values anywhere in Australia," McCarthy said in a statement to Reuters.
TIGHTER RULES ON THE WAY
A key issue that needs to be addressed is to make clear exactly who developers need to consult to ensure projects do not harm important sites on the traditional lands or countries of Indigenous groups.
"Our whole objective is to remove this sort of uncertainty that people are dealing with to make it clear who speaks for the Country," Plibersek told Australian Broadcasting Corp on Aug. 28.
Regis said it had consulted with 13 different groups and individuals during the permitting process.
"Regis takes its relationship with the Aboriginal stakeholders at our operations very seriously and conducted extensive engagement with Aboriginal parties from an early stage in the approvals process," it said in a statement to Reuters.
To help miners manage consultations on protecting Aboriginal heritage while the rules are revised, the Responsible Investment Association Australasia, which counts 75% of the country's institutional investors as members, worked with First Nations, the government and mining giant BHP (ASX:BHP) on best practices.
"The current laws remain inadequate, which is why we need investors and corporates themselves to step up," the association's co-CEO, Estelle Parker, said.
Among its recommendations, the association urges miners to adhere to free, prior and informed consent that can be withdrawn at any time.
The guide is "ambitious and probably unrealistic", law firm Ashurst said in a 2024 report, but it advised miners to get familiar with it.
"Be aware that change will come to Federal heritage laws. When it does, it will be closer to the expectations expressed in these recent publications than the current legal framework."
($1 = 1.4601 Australian dollars)