What is a diversification lease?
A diversification lease:
- is a non-exclusive lease of a large area of Crown land;
- has flexibility to be used for a diverse range of land uses (eg. carbon farming, renewable energy, Aboriginal economic development and land management, conservation purposes); and
- may be for multiple concurrent uses at the same time (eg. under a diversification lease, pastoral activities can co-exist with a hydrogen renewable energy project).
Both diversification leases and pastoral leases allow land to be utilised for broadscale purposes. However, the main difference between these two types of land tenure is that under a pastoral lease, the land may only be used for pastoral purposes (with some limited additional uses). Under a diversification lease, it can be used for multiple uses at the same time.
The terms of the diversification lease will be able to be tailored to be 'fit for purpose' in that the project proponent can negotiate with the Minister for Lands on the term, option/s, rent, use/s and other lease conditions.
A diversification lease can be created by:
- a person applying to establish a diversification lease over Crown land that is currently not used (unallocated Crown land); or
- the current holder of an interest in Crown land (eg. a pastoralist) agreeing to surrender their interest and a new diversification lease being granted over that area (to the pastoralist or a third party).
What opportunities will be created by diversification leases?
Noting Western Australia's transition to net zero greenhouse gas emissions by 2050 and the Government's focus to unlock the economic potential of Crown land, the introduction of diversification leases will create wide ranging future opportunities for pastoralists, renewable energy proponents and others. These will include the following:
- Renewable energy projects: Diversification leases will allow greater accessibility for the growing renewable energy market. Under a diversification lease, farming activities such as grazing can co-exist with hydrogen and renewable energy projects (such as battery farms, solar farms and wind farms) on the same land.
- Carbon farming: Diversification leases will support the expansion of approved and emerging carbon farming methods in the carbon market, by making Crown land available for those carbon farming activities.
- Aboriginal opportunities: Diversification leases will provide an additional tenure option for native title parties and other Aboriginal stakeholders in their aspirations to develop economic opportunities, or to care for their country. A diversification lease will not require the surrender of native title.
- Opportunities for mining companies: Diversification leases will provide another tenure option for mining companies in addressing their long term land rehabilitation obligations under a mine closure, or to provide conservation opportunities as offsets in a mine project approval process.
How will users of Crown land, including mining and resource companies, be impacted?
All existing interests in Crown land will continue once the amendments come into effect. However existing interest holders may be approached by proponents to agree, on commercial terms, to change their interest to a diversification lease.
A diversification lease will be treated like a pastoral lease for the purposes of the Mining Act 1978 (WA) so that:
- it may not be granted without the consent of the Minister for Mines under section 16; and
- mining will be permitted on a diversification lease, except with the occupier's consent if it is within 100 metres of an electrical or fibre optic cable or within 100 metres of a substantial structure that is identified in the diversification lease.
A diversification lease will only be able to be granted once the provisions of the Native Title Act 1993 (Cth) have been complied with. In most cases this will mean that the proponent will need to negotiate an indigenous land use agreement, or ILUA, with the native title parties.
