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Understand the benefits of the PPSR for the mining industry.

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Understand the benefits of the PPSR for the mining industry.

What may be affected?

  • selling, leasing or hiring out mining plant and machinery

  • supply of goods on retention of title terms

  • equipment leases

  • fleet management services, and/or fleet rental services

  • selling or buying materials on hire purchase

  • credit accounts

  • secured loans.

What is not affected?

  • and, fixtures on land or interests in land (including rentals or other payments coming from the land)

  • State/Federal government interests, approvals and licences (including mining tenements).

How does it benefit my business?

Protection when selling or leasing equipment

If you provide plant and equipment to mining contractors, or provide other supplies to the mining industry, you probably do that through a credit account, hire purchase or lease arrangement.

Under any of those arrangements, the customer takes possession and you keep ownership (including under a retention of title agreement), which gives you some rights to take back possession if the customer stops paying.

If a lease of plant or equipment is for a fixed term of more than 12 months if it was entered into before 20 May 2017, and more than 2 years if it was agreed on or after 20 May 2017 (when the PPS Law was changed), or where you have retention of title terms, then PPSR registration can provide protection for your claim to retake possession if your customer stops paying.

Credit accounts, leases and retention of title arrangements can all fall within the definition of purchase money security interests (PMSI) for registration and, if so, should be registered with that status whenever possible.

PMSIs apply in situations where the credit extended, money lent or lease repayments due, were given for the purpose of acquiring the plant or equipment that was acquired, and the same plant or equipment is used by the seller to secure repayment.

The plant or equipment is referred to as ‘collateral’.

PMSI status can give you priority over other registered interests in that collateral, such as that of the customer’s bank, even if the bank registers a security interest over ‘all present and after acquired property’ before your registration.

Motor vehicles should be registered against their serial number, not just against the name of the grantor (the customer leasing or purchasing the motor vehicle from you).

This will protect you in case the motor vehicle is sold-on by your customer.

The serial number will usually be the vehicle identification number (VIN) which is usually located on a small metal plate on the body of the vehicle.

Some portable mining plant or equipment might not meet the definition of motor vehicle under the current law.

As a general guide, if it has a uniquely identifying serial number and is built to be propelled on land by a built-in motor that is more than 200W power and it is capable of going over 10 kph, it will meet the definition – see motor vehicle.

Protection when buying goods

When buying supplies for mining operations searching the register helps you make an informed decision.

You can check whether the valuable goods you want to buy, such as yellow goods, motor vehicles and machinery, are being used as security for a debt or other obligation.

For example, do you know if there is any money owing on the second-hand goods you wish to purchase?

While you may be protected even without a search, because the goods are sold in the ordinary course of business (such as motor vehicles bought from a licensed dealer – the dealer having already done a PPSR search), a search gives you extra peace of mind that you are getting the property free of any security interests over it.

Important note:

When searching you can search against the serial number of motor vehicles and/or the relevant grantor identifier, such as an ACN (Australian Company Number).

Protection when your goods are sold on or subleased

A correct registration can keep you first in line even when your customer has sold the materials or equipment you have a security interest in.

Your security interest can continue to the proceeds of the sale or sublease payments.

Where you supplied plant or equipment that was not supposed to be sold or subleased without your permission, you may have a claim to retake possession of any plant or equipment, as well claim for payment from the proceeds of sale or sublease up to the value of your debt claim against the customer.

Be aware that a claim to retake possession of the actual plant or equipment can sometimes be defeated by the interest of the end-purchaser or sublessee.

This will – depend on other aspects of law, such as taking free rules – see purchaser protections

If subleasing is permitted within the terms of the lease, a particular sublease might itself satisfy the definition of PPS Lease. If a PPS Lease sublease occurs, a registration by the sublessee will be important to you.

Protection when you lease or sell goods on retention of title

If you sell goods on retention of title terms, or lease goods out to contractors and others for periods of more than two years, or for a period which in fact has lasted more than two years, then registration can protect you if you claim a purchase money security interest (PMSI) on the register.

Priority rules determine which secured party ranks higher and who can be paid out first from the collateral.

The rules are generally, first in time, first in line (ie an earlier dated registration beats a later one over the same collateral).

An important exception is a PMSI.

If your registration falls into one of the following categories, you may have a PMSI and need to make sure you register correctly to maximise your risk protection.

Does your registration:

  • involve a lease for a term of:

  • more than two years

  • up to two years but includes options to renew so the total term might exceed two years

  • up to two years or an indefinite period and the lessee has uninterrupted possession for more than two years. (Note: this definition applies to leases entered into from 20 May 2017. For leases entered into before this date, the earlier PPS leases definition still applies (see leases, bailments and consignments).

  • secure payment of credit that you gave when you sold the particular property (such as a credit account, retention of title, or loan finance for a particular asset to be purchased)

  • secure the repayment of money you lent specifically to help the grantor acquire particular personal property and the loan was used to acquire that property (eg if you lent money specifically for the purchase of mining supplies, which were purchased with that money).

If so, you have a PMSI and must take the following steps to ensure your PMSI is enforceable:

  1. Register and tick the box on the PPSR financing statement to claim a PMSI.

  2. For goods you have supplied as part of your customer’s inventory, such as goods for your customer to sell or lease, register before those goods are delivered, or preferably as soon as you enter into terms with a new customer.

  3. For goods the customer is going to be using as equipment (not inventory), you have to register within 15 business days of delivery. Again, you can register as soon as you enter into dealings with a new customer, before any deliveries.

For more information see – purchase money security interests (PMSI).

Protection when your goods are installed/added to other goods

If you have a security interest in materials that are added to other equipment, such as pipe, fittings and strainers installed in plumbing lines, your security interest in those materials can continue.

Registration prior to installation helps protect your claim against later dealings with the resulting plant.

Goods left on site

Depending on the terms of the contract, there may be materials left on a mine site which have interests that should be protected through registration. This includes:

  • protecting a contractor‘s temporary works (such as scaffolding equipment) to be removed after the contract for services is complete

  • protecting the principal’s interest in materials paid for fully or partially by the principal but which are in the possession of the contractor.

Increased financing options

PPSR provides increased financing opportunities for the mining industry.

For example, it enables business to borrow against a wider range of personal property (collateral) than was previously available. Personal property is anything other than land, buildings and fixtures.

Lenders, lessors and retention of title suppliers can protect their position more easily under the PPSR law and are more likely to lend against a wider range of collateral.

Financiers can view interests registered against the goods or assets of you or your business, and that makes it easier for them to decide whether or not to lend to you.

Benefits for the Australian economy

As a result of increased financing options, the PPSR helps to underpin capital flows through the Australian economy and today supports around a quarter of Australia’s GDP.

The PPSR supports the mining sector by making it easier for lessors and financiers to enforce their rights to be paid, and enabling businesses in the sector to obtain secured loans against a broader range of collateral.

PPSR case studies


A case study about a PPSR security interest being registered against an excavator during a financing deal.


A case study about a heavy vehicle hirer who doesn't register an indefinite lease on the PPSR. Includes information about hire and rental, PPS leases and bailments.


A case study about a building company that does a PPSR search and enacts the ‘taking free’ rules for an excavator it hires.


A case study about how a developer uses the PPSR when they engage a contractor to build a warehouse. Find out about priority rights and commingling of goods when using the PPSR and how it can help protect your business.

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