Securing the best value for Territory resources
A change to the way mineral royalties are calculated in the Territory has been passed in the Northern Territory Legislative Assembly.
The Mineral Royalties Bill 2024 introduced a new ad valorem royalty scheme from 1 July 2024 for the calculation, payment and administration of mineral royalties for new mines that commence from 2024. The current profit-based mineral royalties scheme contained in the Mineral Royalty Act 1982 will be grandfathered for all existing mines that were in production in the 2023 calendar year.
The Northern Territory Government established the Mineral Development Taskforce (MDT) in 2021 to identify and investigate opportunities to accelerate investment in new mining projects.
In April 2023, MDT released its final report, and a key recommendation was to replace the Territory’s current royalty scheme with an ad valorem (according to value) scheme that is simple, competitive, and modern. Community consultation also occurred.
The Territory’s current mineral royalty scheme was developed in the 1980s and over time has been subject to numerous amendments, adding to the complexity of the scheme both for producers and administrators.
Over the past 40 years the industry has undergone substantial technological and operational transformation with the demand for minerals, and more recently critical minerals, making the Territory uniquely positioned to supply this growing demand.
The new mineral royalty framework is an ad valorem based scheme. Ad valorem royalty models are preferred and understood by industry and are based on the principle that royalty is applied to only the value of the mineral resource extracted.
The scheme incorporates four mineral treatment categories, applying four royalty rates that balance competitiveness with other jurisdictions while also ensuring that the Territory receives a fair return for its natural resources.
The four royalty rates that will apply are 7.5% for the least refined minerals, 5% for concentrates, 3.5% for chemically refined minerals and 2.5% for final or highly processed minerals.
For more information go to the Resourcing the Territory website.