In its recent decision, the Federal Court has provided substantive guidance on cultural loss compensation for “future acts” under the Native Title Act 1993 (Cth) (NTA) and returned one of the largest native title compensation awards.

In Yindjibarndi Ngurra Aboriginal Corporation RNTBC v State of Western Australia (No 2) [2026] FCA 585 (YNAC v WA and FMG), the Court addressed the proper approach to assessing both economic and cultural loss arising from the grant of mining tenements affecting native title rights. The decision confirms that economic loss is to be assessed by reference to the objective value of the native title rights affected, while cultural loss requires a distinct, evaluative assessment.

Importantly, the decision highlights the significant financial consequences that may arise where future acts affect native title and provides guidance on the limits of compensation methodologies under the NTA.   

Background

On 9 July 2003, the Yindjibarndi people filed a native title claim in respect of land located in the Pilbara, Western Australia. On 13 November 2017, the Court determined that the Yindjibarndi people hold exclusive possession native title rights over parts of the claim area, and non-exclusive rights over the remaining land. 

While claim was on foot, the State granted a number of mining tenements within the determination area to Fortescue Metals Group (FMG). Those tenements facilitated the development of the Solomon Hub Project, a large-scale iron ore mining operation that commenced in 2012 and has since generated substantial mining activity across the area. 

The Yindjibarndi Ngurra Aboriginal Corporation (YNAC), as the prescribed body corporate, subsequently commenced proceedings seeking compensation for the effect of those tenements on native title rights and interests. 

Future acts

A “future act” under the NTA is an act done after 1 January 1994 that affects native title. Such acts are invalid unless they are covered by provisions in Part 2, Division 3 of the NTA. 

Section 24MD relevantly provides that certain acts, including the granting of mining tenements, may be invalid if the applicable procedural requirements are met. Where valid, s 24MD(3) confers an entitlement to compensation for any loss, diminution, impairment or other effect of the act on native title rights and interests.

In Northern Territory v Griffiths ⁽¹⁾, the High Court confirmed that compensation under the NTA consists of two distinct components: economic loss and cultural loss. The present case is the first to apply that framework to large-scale mining operations. 

The proceedings

While it was common ground that the grant of mining tenements is capable of constituting a compensable “future act” under the NTA, the parties disputed whether all of the tenements in issue fell within that characterisation, with FMG contending that some were more properly characterised as water licenses. 

Additionally, the parties disputed the statutory framework governing the assessment of compensation. The State and FMG contended that the compensation was to be determined under the Mining Act 1978 (WA) (Mining Act), whereas YNAC contended the NTA governed the claim. 

The proceeding also involved extensive factual evidence concerning the impact of the Solomon Hub Project on the land, including evidence received on Country from Yindjibarndi witnesses, as well as expert anthropological and archaeological evidence. 

Issues

The proceeding required the Court to determine: 

• Whether compensation was to be assessed under the NTA or the Mining Act; 
• Whether the mining tenements constituted compensable future acts under s 24MD of the NTA; 
• The relevance and timing of exclusive native title rights for the purpose of compensation; 
• The proper methodology for assessing economic loss, including whether a royalty-based approach was available; and 
• The appropriate assessment of cultural loss arising from the mining operations. 

Judgement

The Court held that the compensation regime in the NTA applies, rejecting the contention that the claim should be determined under the Mining Act. It further held that all of the tenements in issue constituted compensable future acts within s 24MD. 

Economic Loss

In relation to economic loss, the Court rejected YNAC’s proposed methodology of assessing loss by reference to a percentage of profits generated by the Solomon Hub Project (the “exchange value” approach). 

Instead, the Court held that, consistently with Griffiths, economic loss must be determined by reference to the objective economic value of the native title rights and interests affected. This required valuation by analogy to freehold, subject to adjustments to account for the nature of the rights, the extent of their impairment, and the duration of the acts, having regard to the non-extinguishment principle. 

In contending for the “exchange value” approach, YNAC proposed a global approach to the valuation of economic loss incurred. However, consistent with Griffiths, the Court adopted a lot-by-lot approach.

The Court held that this approach, grounded in s 51(3) of the NTA and informed by the compensation principles in s 123 of the Mining Act, satisfies the requirement that compensation be provided on “just terms”. 

On that basis, the Court concluded that economic loss would be relatively modest, anticipated to be in the vicinity of $100,000. 

Cultural loss

In contrast, the Court emphasised that cultural loss requires an evaluative assessment of the impact of compensable acts on the Yindjibarndi people’s connection to Country . 

Consistent with Griffiths, cultural loss includes the loss or diminution of traditional attachment to land and the ability to derive spiritual sustenance from the land. The assessment is not confined to economic considerations and must result in an amount that society would regard as appropriate. 

The Court’s assessment of cultural loss considered three areas of spiritual harm arising from the compensable acts: the physical impact of the Solomon Hub Project on the landscape, the loss of spiritual connection with Country, and the loss of rights and duties of an owner of Country.

The Court considered extensive lay and expert evidence, including evidence given on Country, which demonstrated significant disruption to culturally significant sites, songlines, and spiritual relationships with land as a result of the mining operations. 

Having regard to that evidence, and the complete destruction of 124 culturally significant heritage sites and disturbance of 240 heritage places, being a result of the scale and intensity of the Solomon Hub Project, the Court assessed compensation for cultural loss at $150 million. 

Other findings

The Court also held that exclusive native title rights were relevant to the assessment of compensation and applied from the date of the native title claim in July 2003. It rejected constitutional inconsistency arguments and confirmed that, by operation of the Mining Act, the tenement holders (i.e. FMG) are liable to pay any compensation awarded. 

Key takeaways

The decision confirms that compensation for future acts under the NTA involves a clear distinction between economic loss and cultural loss, with fundamentally different methodologies applying to each.

Economic loss is confined to the objective value of the native title rights affected and cannot be assessed by reference to royalties or project profits. By contrast, cultural loss is an evaluative exercise that may result in substantial awards where there is significant disruption to connection to Country. 

The decision also confirms that the NTA compensation regime applies to claims of this kind and that Sate compensation frameworks may inform, but do not displace, that regime. 

This decision resulted in the financial compensation of $150,000,000 for cultural loss for damage to 364 heritage sites and places, which in dollar values is upward of $400,000 per site or place that was destroyed or disturbed by FMG.

More broadly, the case highlights the potential for significant financial exposure arising from future acts affecting native title, particularly in the context of large-scale resource developments, and underscores the importance of engaging with native title holders and complying with statutory processes at an early stage. 

_{(1) [2019] HCA 7; 269 CLR 1.}