Institutional investors and the Queensland resources sector: a new challenge to clean exit

The Australian resources sector has recently seen strong interest from the financial institutional investor space. However, organisations in Queensland must structure their sale process thoughtfully and select their buyer very carefully. Under the intentionally pervasive Environmental Protection (Chain of Responsibility) Amendment Act 2016 (Qld) there could be serious issues when financial institutional investors seek to realise their investment on a clean-exit basis.

The law being considered is the Environmental Protection (Chain of Responsibility) Amendment Act 2016 (Qld) (CORA). This Act became law in Queensland in April 2016. In its simplest terms, CORA introduces a risk, which did not previously exist, that a former owner of a mining or petroleum resource project in Queensland could be given an order (called an EPO) to rehabilitate the resource site, or a cost recovery notice (CRN) to pay to the State an amount required for rehabilitation or monitoring.