Bandanna Energy Limited (ASX:BND) Update On Strategic Cropping Land Policy

Brisbane, June 7, 2011 AEST (ABN Newswire) - Bandanna Energy Limited (ASX:BND) welcomes the recent announcement by the Honourable Kate Jones, Minister for Environment and Resource Management, concerning the eligibility milestones for Strategic Cropping Land (SCL) Transitional Arrangements.

In making submissions in response to the proposed SCL legislation in 2010 and in subsequent representations to Government, Bandanna prudently assumed that part of its Springsure Creek and Arcturus project footprints may lie in land which may ultimately be classified as SCL.

Bandanna has embraced the intent of any future SCL policy in planning for the development of these projects. In particular, Bandanna has modified its mine plans in order to avoid, where possible, impacting land which it believes may ultimately be classified as SCL, and has sought to minimise the impact on such land by planning predominantly for underground mining in areas where it is not possible to avoid an impact.

Bandanna also plans to undertake initiatives in joint venture with agricultural property managers and the Sustainable Minerals Institute of the University of Queensland to develop best practice land management techniques, promote co-existence between agriculture and mining land uses and mitigate the effect of mining on land which may ultimately be classified as SCL.

Bandanna last week received finalised EIS Terms of Reference (TORs) for both Springsure Creek and Arcturus. The Queensland Government has confirmed that although formal execution of the finalised TORs did not occur until 2 June 2011, they were practically completed by 31 May 2011 which is the eligibility milestone date for projects of this type to be included under the proposed SCL Transitional Arrangements.

Recognising this, and the significant financial commitment of Bandanna to Stage 1 of the Wiggins Island Coal Export Terminal (WICET), the Queensland Government has proposed a specific legislated transitional framework to apply to the Springsure Creek Project to provide for it to be developed as an underground coal project. Under this framework, Bandanna will be required to make all reasonable endeavours, including if necessary, contouring and laser levelling, to rehabilitate any effects on SCL such as through subsidence.

Arcturus, which involves an open cut component in its development plan, will not be subject to this specific legislated transitional framework and will instead proceed under the proposed SCL legislation intended to be introduced later this year.

Bandanna will continue to work constructively with the Queensland Government as it develops the proposed SCL legislation, SCL Transitional Arrangements and specific legislated transitional framework for the Springsure Creek Project.

Bandanna's Managing Director, Dr Ray Shaw, said "Bandanna welcomes the Queensland Government's proposal for a specific legislated transitional framework for Springsure Creek. This proposal strikes a balance between providing the Company with appropriate certainty of the approvals process given its substantial current and future investment in infrastructure development in Queensland and the requirements of agricultural stakeholders for confidence that the proposed SCL legislation will maintain Queensland's net food production capacity."

Dr Shaw added "As well as advancing the Springsure Creek Project in accordance with the proposed specific legislated framework, the Company will continue to progress the Arcturus project in accordance with the proposed SCL legislation. Both projects will also continue to be subject to the normal EIS approval process."

About Strategic Cropping Land

In early 2010 the Queensland Government released a discussion paper outlining a proposed new policy and framework to protect the state's most important food growing land for the future following concern that there was a range of competing land-use activities, including mining and urban development which can result in permanent alienation or unavailability of this land for cropping.

On 23 August 2010, the then Minister of Natural Resources Mines and Energy, Mr Stephen Robertson MP, announced a new policy framework aimed at protecting Queensland's strategic cropping land. The framework included a set of trigger maps identifying approximately 4% of the State which has the potential to be declared strategic cropping land. These trigger maps cover areas of Bandanna's tenements including some potential future mine development sites within Bandanna's Golden Triangle, including Arcturus and Springsure Creek.

In response to the Government's invitation, Bandanna lodged a submission and provided presentations on SCL. The SCL framework highlighted that on-ground assessment against certain criteria would be necessary to identify strategic cropping land. On 14th April 2011 the Minister the Hon. Kate Jones announced the proposed criteria and thresholds to be used in the drafting of the new SCL legislation.

On 31 May 2011 SCL transitional arrangements were released. Being eligible for the Transitional Arrangements means that projects which have reached certain milestones will be allowed to proceed even if they permanently alienate strategic cropping land, although they are still required to avoid, minimise and mitigate any impact on SCL.

Projects not in the Transitional Arrangements are, from 31 May 2011, on notice that they need to comply with the requirements of the new SCL legislation.

Contact

Dr Ray Shaw Tel: +61-7-3041-4400 Andrew Crook Mob: +61-419-788-431 http://www.bandannaenergy.com.au