PPN89: Extractive industry and resources

This practice note provides guidance on

• how existing and future extractive industry operations and resources are being protected
• the approval process for extractive industry and other uses both in and outside protected resource areas and near existing and proposed extractive industry operations.

Extractive industry in Victoria

Victoria is growing rapidly, with population forecast to exceed 10 million people by 2050. To support this growth, more extractive resources need to be made available for the building, construction and infrastructure sectors. Raw extractive resources - stone, sand and clay, come from quarries across Victoria.

The long-term supply of strategic extractive resources needs to be secured today, in areas close to where they will be used, to minimise transportation and construction costs.

More information about Victoria’s extractive resources is available at: resources.vic.gov.au

What is extractive industry?

In general terms, extractive industry is the extraction or removal of stone from land for sale or commercial use, or for use in construction, building, road, or manufacturing works. More specific definitions of extractive industry apply in planning schemes and the Mineral Resources (Sustainable Development) Act 1990 (MRSD Act).

The term ‘stone’ is also defined in planning schemes and the MRSD Act to mean basalt, freestone, granite, limestone, sandstone, or other building stone, or rock, ordinarily used for building, manufacturing, road making, or construction; clay (other than fine clay, bentonite, or kaolin), earth, gravel, quartz (not quartz crystals), sand, soil, slate, or other similar material.

Mineral sands and rare earths are not extractive resources.

How does the planning scheme protect extractive industry operations and resources?

Extractive industry operations (usually referred to as a ‘quarry’) typically make a substantial impact on the natural environment through excavation and processing activities. While such impact is managed on site, there is potential for off-site impacts to occur.

A quarry usually operates for several decades from the same site and in that time the surrounding land outside the quarry can change in character and may become urbanised. This can lead to incompatible use and development locating close to quarries or an extractive resource, which can compromise or even prevent use of the resource. Affected quarries may be limited in their operation in order to meet changed amenity and safety expectations or rules or be forced to close prematurely.

To discourage this outcome, planning scheme provisions are in place that identify and protect extractive resources and manage their use and development, and manage the use and development of land around them. The table below summarises the most relevant provisions:

What is an Extractive Industry Interest Area?

An Extractive Industry Interest Area (EIIA) is an area identified as containing or potentially containing stone, sand and clay resources of sufficient quantity and quality to support commercial extractive industry operations, in area locations with good transport links and relatively few environmental constraints. EIIAs serve as a geographic indicator in the planning scheme and have been defined for the Melbourne, Ballarat, Bendigo, Geelong, and Latrobe supply areas.

EIIAs help facilitate the objectives and strategies of planning policy for resource protection and buffer management. EIIAs are addressed in clause 52.09 of the planning scheme. EIIAs do not imply that an extractive industry can be established ‘as-of-right’ in these areas, nor do they preclude extractive industry from being established outside EIIAs. EIIAs should not be regarded as totally inclusive of all attainable stone resources in Victoria.

What is a Strategic Extractive Resource Area?

A Strategic Extractive Resource Area (SERA) is defined based on an assessment of surrounding natural, cultural, and existing land uses, supporting transport networks, proximity to markets and available geoscience information including EIIAs and industry supply and demand data.

Specifically, a SERA:

• is located generally within existing EIIAs in a local government area recognised as having strategically significant resources
• includes actual or potential extractive resources across the area, wholly or in part, and may support current or new extractive industry operations or their buffer
• has manageable environmental and planning constraints and is accessible to markets
• is implemented in the planning scheme by the State Resource Overlay in conjunction with the Special Use Zone.

For more information about SERAs, refer to the Earth Resources website: resources.vic.gov.au.

Extractive industry approvals – work authorities

Before land can be developed for extractive industry, in most cases:

• a work plan must be statutorily endorsed under the MRSD Act
• following this, a planning permit must be issued under the Planning and Environment Act 1987 (PE Act)
• after a planning permit is issued, the final work plan must be approved, and a work authority granted, under the MRSD Act.

The approval processes under the MRSD Act are administered by Earth Resources Regulation (ERR) within the Department of Energy, Environment and Climate Action.

Planning permit applications for extractive industry

When is a planning permit for extractive industry required?

Where permitted by a zone, a planning permit is required to use and develop land for extractive industry. Under clause 62.01 (Uses not requiring a permit), this does not apply to the use, if the conditions of clause 52.08 are met. While extractive industry is expressly prohibited in the residential zones, most zones do not specify ‘extractive industry’ in their table of uses.

Clause 52.08 and section 77T of the MRSD Act operate to exempt the carrying out of an extractive industry from the requirement for a planning permit if:

• an Environment Effects Statement (EES) has been prepared
• assessed by the Minister administering the Environment Effects Act 1978
• assessed by the Minister for Resources and
• a work authority granted.

To activate this provision of the Act, council and/or the proponent should satisfy themselves that section 77T (a) (b) and (c) have been met.

Due diligence would be required in such circumstances to identify any planning permit triggers that are outside the scope of the EES. This may take the form of additional planning controls such as an incorporated plan or special controls overlay.

Subsequent amendments to the work authority may authorise works not covered by the EES.  Sometimes such amendments become subject to a new or amended planning permit application for the part of a proposal that was not contemplated by the EES.

Sometimes clause 63 (Existing Uses) is also relevant to the consideration of whether a planning permit is required.

Alternative Pathway: Clause 53.22 Significant Economic Development

Where an extractive industry meets the $30 million threshold and has Invest Victoria’s confirmation of financial feasibility, the proponent may opt to use clause 53.22. Under clause 72.01 the Minister for Planning is the responsible authority for use or development to which clause 53.22 applies.

The $30m threshold refers to the value of the resource either as a stand-alone new quarry proposal or as the subject of a variation to a work plan or amended planning permit.  The value of the resource must be validated by a suitably qualified person using the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code, 2012 edition), known as a ‘JORC estimate’.

This pathway allows for the responsible authority to consider planning scheme requirements as relevant, removes third party review rights, but retains notice, referral and decision guideline considerations.

Is a planning permit required to remove vegetation as part of a work plan?

A planning permit is not required to remove, destroy, or lop vegetation to the minimum extent necessary to enable the carrying out of extractive industry in accordance with a work plan approved under the MRSD Act and authorised by a work authority.

A memorandum of understanding is in place between the Department of Environment, Land, Water and Planning (DELWP) and DJPR that requires a work plan to be referred to DELWP for assessment in accordance with the Guidelines for the Removal, Destruction or Lopping of Native Vegetation (DELWP, 2017) as part of the statutory referral and endorsement process. This includes, where applicable, the provision of native vegetation offsets. If the extractive industry does not require a work plan under the MRSD Act, a planning permit to remove vegetation may still be required.

The Memorandum of Understanding for Earth Resources Industries Approvals and other Obligations and Responsibilities (DELWP and DJPR, 2021) is available on the Memoranda of Understanding webpage of the Resources Victoria website: resources.vic.gov.au.

What information must accompany a planning permit application for extractive industry?

The preliminary step to applying for a planning permit (or for an amendment to a permit) for extractive industry, is to obtain the statutorily endorsed work plan under the MRSD Act, issued by ERR).

Under clause 52.09, the application must include:

• a copy of the endorsed work plan
• the written notice of statutory endorsement
• any conditions specified in the statutory endorsement.

Most of the information required to be submitted will be included in the statutorily endorsed work plan.

Related use or development proposals outside the statutorily endorsed work plan area will also need to be addressed in the planning permit application. For example, if a new access needs to be created to a road in a Transport Zone 2.

A work plan may not be required if the proposed extractive industry complies with the Code of Practice for Small Quarries (Department of Primary Industries, 2010) although operators must hold a work authority under the MRSD Act prior to commencing work on a small quarry. If a planning permit is required, the information required as part of the application will typically be consistent with that provided as part of a work plan.

Where a proponent seeks to make use of clause 53.22 (Significant economic development), an application lodged under clause 52.09 must include written advice from Invest Victoria and a JORC resource estimate.

When should a planning permit application for extractive industry be referred?

The work plan approval process requires the same referrals to authorities as in a planning permit application process. Clause 66 provides that referrals for a proposal are not required if they have already been done under the work plan approval process.

Where a work plan is not referred as part of the work plan process, the referral will need to be made as part of the planning permit application process. All the referral authorities under clause 66.02-8 are determining referral authorities and their directions must be followed by the responsible authority (usually a council).

Most referrals, if not all of them, will be undertaken through the work plan process. There is no need for a responsible authority to refer any planning permit applications. ERR will provide copies of the referral authorities’ responses to the responsible authority.

Where a proponent seeks to make use of clause 53.22 (Significant economic development), an application must still be referred under the provisions of clause 66.02-8.

What notice must be given of a planning permit application to use or develop land for extractive industry?

Section 52 (Notice of application) of the PE Act sets out the requirements for giving notice of a planning permit application.

In assessing the potential material detriment, the responsible authority should take into account that possible impacts from extractive industry, such as dust, noise, vibration and transport, may impact properties some distance away. To ensure appropriate notice is given, owners and occupiers beyond those abutting the subject land should be notified – this could be up to 250 metres for a non-blasting quarry, or up to 500 metres for a blasting quarry.

Where the land is in a State Resource Overlay for a Strategic Extractive Resource Area (SERA), an application for extractive industry is exempt from notice under section 52(1)(a), (b) and (d), the decision requirements of section 65(1), (2) and (3), and from rights of review under section 82(1) of the PE Act if the land:

• is at least 250 metres for a non-blasting quarry, or up to 500 metres for a blasting quarry, from land used for a range of specified uses in the overlay schedule, and
• has access to a road in a Transport Zone 2.

The MRSD Act does not provide for a public notification process when work plans are statutorily endorsed, approved, or varied such as that required under section 52 of the PE Act.

Before making a planning permit application, a proponent may have already contacted a range of people when preparing the work plan for statutory endorsement. In developing a work plan, ERR encourages proponents to implement an effective consultation program that is appropriate to the location and the proposal. Sections 40(3)(d) and 77G(3)(e) MRSD Act require community engagement and consultation throughout the period of the licence or extractive industry.

An application lodged under clause 53.22 (Significant economic development) is subject to all relevant notice requirements under the PE Act. Decisions are exempt from the decision requirements of 64(1), (2) and (3) and the third-party review rights under 82(1) of the PE Act.  Note that this provision overrides all other provisions in the planning scheme, including the review exemption provision in the State Resource Overlay if this pathway is taken up.

What matters must the responsible authority consider when assessing a planning permit application for extractive industry?

Clause 52.09-4 contains decision guidelines that the responsible authority must consider, as appropriate, before deciding an application including:

• effects on the environment and landscape (native flora and fauna, natural and cultural landscapes, and groundwater and surface water quality)
• impacts on heritage (place of cultural and historic significance, and Aboriginal places)
• effects on amenity (vehicular traffic, noise, blasting, dust, and vibration)
• the ability to contain emissions within the boundaries of the site
• rehabilitation of the site
• proposed provisions, conditions, or requirements in a statutorily endorsed work plan.

In addition to these decision guidelines, the responsible authority must also consider:

• decision guidelines in the zone and any overlay applying to the land
• applicable state, regional and local policies of the Planning Policy Framework
• clause 65 (Decision Guidelines)
• any other relevant provision of the planning scheme
• the matters set out in section 60 of the PE Act.

The statutorily endorsed work plan will address some of these matters. For example:

• the work plan (and conditions) will set out either specific measures or a management framework on dealing with aspects such as noise, blasting, dust, vibration, and rehabilitation
• native vegetation removal will have been assessed against the Guidelines for the Removal, Destruction or Lopping of Native Vegetation (DELWP, 2017) and conditions requiring appropriate offsets will be imposed on the work plan
• the work plan will include a rehabilitation plan.

A Cultural Heritage Management Plan, if required, will address potential impacts on Aboriginal cultural heritage.

As with any other planning permit application, the responsible authority must be satisfied that the requirements of the Aboriginal Heritage Act 2006 have been met before deciding to grant a planning permit.

In addition to the above considerations, there are two added decision guidelines for extractive industry applications that are subject to clause 53.22 (Significant economic development), being a requirement to consider the purpose of the clause and the views of the Government Architect, as appropriate.

What conditions are appropriate on a planning permit for extractive industry?

Under section 62 of the PE Act, the responsible authority must both:

• include any condition which the planning scheme or a relevant determining referral authority requires to be included
• not include additional conditions which conflict with a planning scheme or referral authority condition.

Clause 52.09-5 requires certain time-related conditions to be included (explained below). Since a statutorily endorsed work plan has been assessed by the ERR and relevant referral authorities, it will provide a substantial basis for regulating the use and development under a planning permit. The final, approved work plan will take account of any requirements of a planning permit. The responsible authority should therefore include the following condition on the permit to both streamline and reinforce the alignment of requirements under the two Acts:

• The use and development must at all times be in accordance with any work plan approved under the Mineral Resources (Sustainable Development) Act 1990.

Where a work authority is required under the MRSD Act, it is recommended that the planning permit and work plan be linked through the following conditions:

• The use and development must not commence until a work authority is granted under the Mineral Resources (Sustainable Development) Act 1990.
• This permit will expire if the work authority is cancelled under section 77O of the Mineral Resources (Sustainable Development) Act 1990.

A responsible authority may also include any other condition that it thinks fit. This may also include conditions related to the hours of operation and landscaping. Care should be taken to avoid any conflict with work approval requirements.

What commencement and expiry date must be specified in the permit for extractive industry?

Under section 68 of the PE Act, a permit for the use of land expires if the use does not start within the time specified in the planning permit, or, if no time is specified, within two years after the issue of the permit. The nature of extractive industry means that work may not commence until some years after the issue of a permit as commencement is related to the market demand for the stone resource.

To ensure quarry permits provide a reasonable and appropriate time for the use to commence, clause 52.09 requires that permits for extractive industry include a condition that allows a commencement period of not less than five years.

As set out in clause 52.09, a permit condition requiring the use to cease must not be applied unless the subject land or that adjoining it, is being urbanised or proposed to be urbanised.  Alternatively, the applicant can suggest an expiry date.  Typically, quarries operate for decades.

Are developments rights lost if a site is temporarily inactive?

Section 68A of the PE Act states that a permit for the use of land for extractive industry expires if the use authorised by the permit is discontinued for a period of 10 years.

Operators should be clear about the activities the permit allows and what will constitute continuing use under it. Activities that are not undertaken pursuant to the permit (for example, general or routine maintenance of the land) may not constitute continuing the use of the land under the permit.

Planning for proposals close to extractive resources and operations

It is important to be able to source extractive resources close to where they will be needed the most. This helps to keep construction costs down and reduces the carbon footprint of the industry. It also helps to reduce traffic congestion, protect the amenity of local areas and reduce wear and tear on roads.

Proposed use and development of land in an EIIA, or within specified proximity to existing quarries or protected SERAs are subject to planning scheme provisions to ensure such new uses do not unreasonably restrict quarrying or are not excessively affected by quarrying. Such provisions include clause 52.09, rural zones, the State Resource Overlay (clause 44.07) and policy considerations around land use incompatibility in clause 13.07-1.

Accommodation proposals in rural zones near existing and proposed extractive industry

Unless prohibited by the zone, the use of land, of the construction of a building or the construction or carrying out of works, in a rural zone for accommodation (including a dwelling) generally requires a planning permit if located within 500 metres from the nearest title boundary of land on which a work authority has been applied for or granted under the MRSD Act.

These zones include specific decision guidelines which require the responsible authority to consider potential adverse impacts from the existing or proposed extractive industry on the accommodation use and the need to locate and design buildings to avoid or reduce those impacts.

The State Resource Overlay and its schedules

The State Resource Overlay (SRO) is a planning scheme provision used to protect State significant areas of mineral, stone and other resources from development that would prejudice the current or future productive use of the resource.

The schedule to the SRO may be used to specify requirements, including permit requirements, for the use and development of land.

The SRO has been used to identify and protect extractive resources within Strategic Extractive Resource Areas (SERAs) in the Cardinia, South Gippsland and Wyndham planning schemes, using two types of schedule:

• Strategic Extractive Resource Areas: applied to the resource area itself to identify and protect it.
• Protecting Extractive Industries: applied to buffer areas surrounding SERA SRO’s to regulate the use and development of land that may be incompatible with an approved quarry operation.

The schedule to the SRO may specify certain requirements for the use of land, the subdivision of land, the construction of a building or the construction or carrying out of works. Any requirement in the schedule to the overlay must be met. It is expected schedules will vary from one another, for example for blasting quarries, the buffer will be 500 metres, while for sand quarries, the buffer will be 250 metres. Local features such as biodiversity assets or heritage assets may also influence the schedule’s design.

Under the SRO schedules for extractive industry, a planning permit is required for the following uses:

• Accommodation
• Crematorium
• Education centre
• Funeral parlour
• Hospital
• Leisure and recreation
• Place of assembly
• Retail premises
• Veterinary clinic
• Winery

These uses have potential to be incompatible with existing and future extractive industry.

A permit is also required for development, other than specified exemptions, in the SRO schedules for extractive industry.

What notice should be given of a proposal in the SRO?

A schedule to the SRO may include an exemption from notice and of review requirements of the PE Act, however generally these are not activated in the schedules for extractive industry. In the absence of such exemptions, the requirements of section 52(1) of the PE Act apply.

The aim of the overlay is to prevent the encroachment of uses that are incompatible with extractive industry such as accommodation or other uses that rely on local amenity or rural peace and quiet (tourism, hospitality). Proposals that would be unlikely to require notice would be farm sheds, native vegetation removal, and other buildings and works that are unlikely to be sensitive to dust, noise, vibration or heavy vehicle traffic.

It is recommended that notice be given to the extractive industry operator and/or landowner occupying the SERA or an existing quarry of any application received within the SRO schedule area so they may judge whether the proposal is incompatible with extractive industry.

What is Resources Victoria’s role under the State Resource Overlay?

Resources Victoria, a group of the Department of Energy, Environment and Climate Action (DEECA) is a determining referral authority for applications under the SRO schedules and must respond to referrals within 28 days from the day on which they receive a copy of a planning application or receive additional information.

What information must the applicant provide?

The SRO requires a report to be provided by the applicant that explains how the proposal:

• is consistent with the management objectives specified in the schedule
• responds to the decision guidelines.

What matters must the responsible authority consider when assessing a planning permit application in the State Resource Overlay?

The responsible authority must consider the decision guidelines in clause 44.07-8 and clause 65 of the planning scheme, as appropriate. When considering those decision guidelines and assessing the compatibility of a use or development, matters that may be taken into account include:

• Whether the nature and proximity of a proposal is compatible with the protected extractive resource or existing extractive industry and whether the proposal is likely to compromise the operation and long-term development of extractive industry.
• The siting and design of the proposal and whether measures can be taken to minimise any amenity impacts around existing or future extractive industry. This can include using topography as a visual barrier, building placement, vegetation screening, drainage patterns and local wind patterns.
• Whether the proposal is of a scale and nature, that it will have amenity expectations that will prove to be incompatible in this location now or when the extractive resource is extracted.
• Whether the proposal is a major capital investment that may adversely impact on the future or existing productive extraction of the resource.
• Whether the proposal will entrench an incompatible use (for example where a small two-bedroom dilapidated dwelling is remade into a new large multi-bedroom dwelling). Entrenching and intensifying a use can increase its sensitivity to an extractive industry activity.
• Whether the proposal is of a temporary nature, so it will be gone, or is easily removed before or when the extractive resource is likely to be extracted.
• Whether the access to the subject land is likely to conflict with traffic from extractive industry (for example, whether a different road or greater distance be achieved from the extractive industry site).
• Whether the proposed use or development should be and is capable of being located elsewhere on the land.

The individual schedules to the SRO have decision guidelines of their own, around the general test of whether a proposed use or development will be a ‘good neighbour’ to an existing or future quarry operation, and whether any action can be taken to improve compatibility of the two uses.

Notice and referral requirements under clause 52.09 for proposals close to extractive resources and operations

What notice must be given to Resources Victoria?

In addition to the requirements of section 52 (Notice of application) of the PE Act, clauses 52.09-7 and 66.05 of the planning scheme requires that notice must be given to the Secretary of the Department administering the MRSD Act (currently Resources Victoria) of an application:

• to use or subdivide land or construct a building for accommodation, childcare centre, education centre or hospital:
  • within an Extractive Industry Interest Area
  • on land within 500 metres of where a work authority has been applied for or granted under the MRSD Act; or

• to construct a building or construct or carry out works on land for which a work plan has been applied for or granted under the MRSD Act

This requirement does not apply to an application:

• to extend a building or works; or
• that is required to be referred to the Secretary under section 55 of the Act.

What notice should be given to extractive industry operators?

Under clauses 52.09-7 and 66.05 of the planning scheme, notice of an application to use or develop land for accommodation in a rural zone must be given to the owners and occupiers of land subject to a work authority that has been applied for or granted under the MRSD Act if the building or works associated with the accommodation is located within 500 metres from the nearest title boundary of that land.

While not required by clause 52.09, the responsible authority may also consider giving notice to existing extractive industry operators of planning permit applications for sensitive uses such as those specified in the schedule to the SRO for extractive industry.

Given the potential impact of sensitive uses on extractive industry, it is advisable for the responsible authority to look beyond the immediate adjoining properties when determining which properties should be notified. Appropriate buffers may extend up to 500 metres depending on the nature and scale of the existing or proposed operation.

What applications for accommodation must be referred to Resources Victoria?

As noted above, a permit is generally required to use land, or to construct a building or construct or carry out works, in a rural zone for accommodation within 500 metres from the nearest title boundary of land on which a work authority has been applied for or granted under the MRSD Act. Under clauses 52.09-3 and 66.02, this kind of application must be referred to the Secretary of the Department administering the MRSD Act.

Page last updated: 14/03/24