The battle between traditional owners of the Mount Jowlaenga area in Western Australia’s Kimberley and mineral sands miner Sheffield Resources Ltd over a proposed multimillion dollar mineral sands project is heading back to court, with the owners warning the case sets a dangerous precedent.

The traditional owners have lodged an appeal with the Full Federal Court in an attempt to stop the ASX-listed company pressing ahead with the project on their land without having reached agreements with them in key areas, including compensation.

The appeal comes after a single judge of the Federal Court, Justice Michael Barker, this month ruled that the law did not “carry with it the express obligation, or implied obligation, to negotiate in good faith” once a matter was before the National Native Title Tribunal.

His decision cleared the way for the company to ask the State Government to give the project the green light.

But Kimberley Land Council chief executive officer Nolan Hunter said there should be no loss of the good faith protection at any point of the negotiation process.

Mr Hunter said if the decision was not challenged, it would set a “concerning” precedent for future Native Title negotiations and would pave the way for companies to circumvent the requirement for formal agreement-making.

He said in the past many of the companies operating in the Kimberley had acted in good faith and respected that they needed to have an agreement in place with traditional owners.

“The Mount Jowlaenga Traditional Owners are not opposed to development, but they are opposed to a mining company that is seeking to operate on their traditional lands without an agreement in place,” Mr Hunter said.

“If this mine is allowed to go ahead, it will mean 40 years of operation without an agreement with the Mount Jowlaenga Traditional Owners.

“Sheffield Resources does not have a social licence to operate its Thunderbird mine in the Kimberley.”

Mr Hunter said there was no agreement to protect the Mount Jowlaenga Traditional Owners’ cultural heritage, to compensate them for the impacts on their Native Title or to ensure their participation in the project through employment or contracting.

He said the Federal Court ruling highlighted the increasing inability of the Native Title Act to protect and look after the interests of Aboriginal people.

In a statement, the Mount Jowlaenga people said Justice Barker’s decision meant that instead of protecting them, the Native Title Act was being used by Sheffield Resources to take advantage of them.

“We have the responsibility of looking after our Native Title and cultural heritage for our old people and for our future generations,” they said.

“We should be able to rely on the good faith law under the Native Title Act to protect us from companies using bad faith negotiation tactics to get our consent for their project.”

The Mount Jowlaenga people disputed that Sheffield had strong support in the local community for the project.

Sheffield Resources plans to operate its zircon-rich Thunderbird Mineral Sands Project on the Dampier Peninsular about 60km west of Derby.

It is said to be one of the biggest mineral sands deposits to be discovered in three decades.

The company hopes to begin construction on the site later this year, with production to start in 2019.

In October last year the company took the matter to the National Native Title Tribunal, saying negotiations had fallen through and successfully asked for the matter to proceed without an agreement in place.

The Mount Jowlaenga people were this month unsuccessful in their appeal to a single judge of the Federal Court, despite arguing Sheffield had not acted in good faith. The matter will now go to the Full Court of the Federal Court.

In a statement to the ASX, Sheffield said it would seek to have the Full Court hearing expedited.

“This matter has been comprehensively considered and decided in Sheffield’s favour by both the NNTT and the Federal Court,” Sheffield managing director Bruce McFadzean said.

“We continue to maintain we have a strong position in this matter. Sheffield will endeavour to have the matter expedited.”

Wendy Caccetta