Part 3Reservation of minerals and royalty

Part 3—Reservation of minerals and royalty 16—Reservation of minerals (1) Notwithstanding the provisions of any other Act or law, or of any land grant or other instrument, the property in all minerals is vested in the Crown. (2) This section applies in respect of all mineral land and in respect of all other land (including reserved land) in the State or under coastal waters on the landward side of the baseline. 17—Royalty (1) Subject to this Act, royalty is payable to the Crown on all minerals recovered from mineral land. (1a) Royalty is not payable on extractive minerals recovered from mineral land— (a) where the terms and conditions of the mineral tenement— (i) make specific provision for the management and use of the extractive minerals as extractive minerals produced during the course of carrying out authorised operations under the tenement; and (ii) make specific provision for the exemption of the extractive minerals from the payment of royalty; or (b) by the owner of the land under section 75(2). (2) Royalty is not payable on minerals recovered from mineral land that are removed from the area of a mineral tenement for the purpose of any testing of a kind approved by the Minister. (3) Royalty is only payable on precious stones if the precious stones are recovered under this Act. (4) Subject to this or any other relevant section, royalty will be equivalent to— (a) in the case of extractive minerals—55 cents per tonne, or such lesser amount as may be prescribed by the regulations; or (b) in the case of minerals other than extractive minerals— (i) if the minerals are declared mineral ores or concentrates—5% of the value of the minerals, as assessed in accordance with this section; (ii) if the minerals are declared refined mineral products—3.5% of the value of the refined mineral products, as assessed in accordance with this section; (iii) if the minerals are declared industrial minerals or construction materials—3.5% of the value of the minerals, as assessed in accordance with this section; (iv) in any other case—5% of the value of the minerals, as assessed in accordance with this section. (5) The value of minerals, for the purposes of determining royalty, will be the value that represents the market value (excluding GST) of the minerals on— (a) in the case of minerals sold pursuant to a contract with a genuine purchaser at arms length—the day on which ownership of the minerals is transferred to the purchaser; and (b) in any other case—the day on which— (i) the minerals— (A) leave the mineral tenement from which the minerals were recovered; or (B) are used on the tenement; or (ii) if the minerals have been transported to mineral land the subject of a miscellaneous purposes licence—the minerals leave that mineral land or are used on that mineral land, whichever occurs later. (6) For the purposes of subsection (5), the market value of minerals will be determined as follows: (a) subject to paragraph (b), if the minerals are sold pursuant to a contract with a genuine purchaser at arms length, the market value of the minerals will be the contract price (excluding GST) for the minerals; (b) if— (i) the Treasurer is not satisfied that the contract price for the minerals reflects the market pricing of the minerals; or (ii) the minerals are not sold pursuant to a contract with a genuine purchaser at arms length, the market value of the minerals will be determined according to— (iii) any price quoted or obtained on a market recognised by the Treasurer, after consultation with the Minister, by notice in the Gazette as being a relevant industry market for the purposes of determining the market value of minerals of that kind; or (iv) if subparagraph (iii) does not apply— (A) the price (if any) declared by the Treasurer, after consultation with the Minister, by notice in the Gazette as being an indicative price for the minerals; or (B) the method (if any) declared by the Treasurer, after consultation with the Minister, by notice in the Gazette that is to be used for determining an indicative price for the minerals; or (v) if subparagraphs (iii) and (iv) do not apply— (A) any price obtained in relation to sales of minerals of the same kind where those sales were to genuine purchasers at arms length within the same period for which a return is required to be furnished under section 17CA; or (B) if no relevant transactions have occurred in that period—any price obtained by other parties within the industry in relation to sales of minerals of the same kind on the open market within the same period for which a return is required to be furnished under section 17CA; or (vi) if subparagraphs (iii), (iv) and (v) do not apply—the tenement holder's estimate of the reasonable value of the minerals (to be determined in accordance with any requirements, and accompanied by any information, prescribed by the regulations). (7) For the purposes of subsection (6)(a), contract price means— (a) the amount to be paid under the contract; plus (b) the value of any consideration, set-off, concession or other factor otherwise taken into account by the parties to the contract in determining the amount to be paid under the contract. (8) Costs of a prescribed kind incurred before minerals leave— (a) the mineral tenement from which the minerals were recovered; or (b) if the minerals have been transported to mineral land, the subject of a miscellaneous purposes licence—that mineral land, are not to be included for the purposes of determining the market value of those minerals. (8a) Costs of a prescribed kind incurred after minerals leave— (a) the mineral tenement from which the minerals were recovered; or (b) if the minerals have been transported to mineral land, the subject of a miscellaneous purposes licence—that mineral land, are not to be included for the purposes of determining the market value of those minerals. (9) The Treasurer may, after consultation with the Minister and under an agreement between the Treasurer and the person liable to pay royalty on any minerals other than extractive minerals, determine that royalty will be payable according to the weight or volume of minerals recovered or will be payable at some other price or according to some other method, and royalty will be payable by the person in accordance with the determination. (10) The Treasurer may, after consultation with the Minister and on the application of a person liable to pay royalty under this section, having regard to the effect that payment of such royalty would be likely to have on the viability or profitability of authorised operations carried on by the person, waive payment of royalty wholly or in part, or reduce the rate at which royalty is payable, on minerals recovered in the course of those operations. (11) Royalty may be recovered by the Crown as a debt due to the Crown in any court of competent jurisdiction. (12) The tenement holder for the tenement from which minerals are recovered is liable to pay the royalty. (13) For the purposes of this section, the Treasurer may, after consultation with the Minister, from time to time— (a) by notice in the Gazette— (i) declare specified types of mineral ores or concentrates to be declared mineral ores and concentrates; and (ii) declare specified types of refined mineral products to be declared refined mineral products; and (iii) declare specified types of minerals to be declared industrial minerals or construction materials; and (b) by subsequent notice in the Gazette, vary or revoke a declaration under paragraph (a). (14) A notice under subsection (13) will have effect from a date specified in the notice by the Treasurer. 17A—Reduced royalty for new mines (1) The Treasurer may, after consultation with the Minister and on the application of a person liable to pay royalty (other than on extractive minerals), by notice in the Gazette, declare that a mine will be taken to be a new mine for the purposes of this section. (1a) An application may not be made by a person under subsection (1) on or after 1 July 2020. (2) Despite section 17, for the prescribed period, royalty payable in relation to minerals (other than extractive minerals) recovered from mineral land at a new mine will be equivalent to 2 per cent of the value of the minerals (as assessed in accordance with the royalty assessment principles under section 17). (2a) In subsection (2), the prescribed period is the period commencing on the day on which the first royalty payment under this Act is due and payable and ending— (a) on the day falling 5 years after that day; or (b) on 30 June 2026, whichever occurs first. (3) The Treasurer may, after consultation with the Minister and by subsequent notice in the Gazette, vary or revoke a declaration under subsection (1). (4) An application under this section must be made in a manner and form determined by the Treasurer after consultation with the Minister and must be lodged with the Director of Mines. (5) An applicant must provide any information reasonably required by the Treasurer to determine the application. (6) In determining whether or not to make a declaration under this section, the Treasurer may have regard to the following matters (insofar as they may be relevant): (a) the extent to which the authorised operations to be carried on at the mine can be viewed as constituting an extension of existing authorised operations, or the revival of authorised operations that have been previously carried on; (b) the nature of the authorised operations to be carried on at the mine when compared to any existing operations carried on, or previously carried on, at the same tenement, or a tenement within the vicinity of the relevant mine; (c) the relationship of the applicant to any other person carrying on authorised operations within the vicinity of the relevant mine (including, in the case of a body corporate, authorised operations carried on by a related body corporate); (d) such other matters as the Treasurer thinks fit. 17AB—Royalty for private mines (1) Subject to and in accordance with the provisions of this Act, royalty in respect of minerals recovered from private mines is payable as follows: (a) in the case of a private mine in relation to which a relevant event has occurred—royalty is payable on— (i) extractive minerals recovered from the private mine; and (ii) any other minerals recovered from the private mine on or after the day on which the relevant event occurred; (b) in any other case—royalty is payable on extractive minerals recovered from the private mine, but is not payable on any other minerals so recovered. (2) For the purposes of subsection (1), a relevant event occurs if, on or after 19 June 2014, there is (or has been) a change in— (a) the proprietor of the private mine; or (b) the whole or any part of the right to carry out authorised operations at the private mine. (3) A reference in subsection (2)(a) to a change in the proprietor of a private mine includes a change in a person lawfully claiming under the proprietor whether the claim is of a legal or equitable kind. (4) If a private mine has 2 or more proprietors, a change in any of those proprietors will be taken to be a relevant event for the purposes of subsection (2)(a). (5) Without limiting any other provision, the following will be taken to be relevant events for the purposes of subsection (2)(a): (a) the creation, transfer, assignment, sale or disposal of an interest in proprietary rights in minerals recovered from a private mine under a contract or other instrument or agreement; (b) an event, transaction or acquisition that would give rise to liability to pay duty under Part 3 Division 6 or 8 or Part 4 of the Stamp Duties Act 1923, disregarding any exemptions from such duty applying under that Act; (c) without limiting paragraph (b), the acquisition of a controlling interest in a business that— (i) is the proprietor of the private mine; or (ii) holds the whole or any part of the right to carry out authorised operations at the private mine. (6) For the purposes of subsection (5)(c)— (a) business includes bodies and associations (corporate and incorporated) and partnerships; and (b) a person has a controlling interest in a business if the person would be treated as having a controlling interest in the business for the purposes of section 72 of the Payroll Tax Act 2009 (disregarding section 72(1)). (7) Subject to subsection (8), the proprietor of a private mine is liable for royalty payable under this section. (8) If— (a) a person other than the proprietor is carrying out authorised operations at a private mine; and (b) the proprietor gives notice to the Minister, in a manner and form determined by the Minister, under this section, the person carrying out the authorised operations (rather than the proprietor) is liable for royalty under this section. (a) the proprietor of a private mine has given a notice to the Minister under subsection (8); and (b) the person carrying out authorised operations at the private mine fails to pay royalty; and (c) the proprietor pays the royalty, the proprietor may, subject to any agreement to the contrary— (d) recover the amount paid as a debt from the person who failed to pay the royalty; or (e) set off the amount paid against a liability (if any) to the person who failed to pay the royalty. 17AC—Notification of relevant event (1) If a relevant event within the meaning of section 17AB occurs, the person who, as a result of the relevant event, becomes a proprietor of a private mine or acquires a right to carry out authorised operations at a private mine (as the case may be) must, within 30 days after the relevant event, notify the Minister of the relevant event. Maximum penalty: $20 000. (2) The notification of the relevant event— 17B—Assessments by Treasurer (a) the Treasurer is of the opinion that a person liable to pay royalty— (i) has not made a payment of royalty when it falls due; or (ii) has not paid royalty in accordance with the royalty assessment principles (and any related provision under this Act); or (iii) has not paid royalty in accordance with any agreement or determination that applies under section 17 or 17A; or (iv) has not paid royalty in accordance with any other relevant requirement; or (b) the market value of minerals has been determined, for the purposes of assessing royalty, according to a tenement holder's estimate of the reasonable value of the minerals under section 17(6)(b)(vi) and the Treasurer does not agree with the estimate; or (c) a person makes a default in furnishing a return; or (d) the Treasurer is not satisfied with a return furnished by a person; or (e) the Treasurer has reason to believe— (i) that royalty is payable by a person who has not furnished a return; or (ii) that a person who has furnished a return has made an overpayment of royalty, the Treasurer may, after consultation with the Minister, make an assessment of royalty the person is liable to pay. (2) Without limiting subsection (1), the Treasurer may, after consultation with the Minister, on application or on the Treasurer's own initiative, review and revise an earlier assessment of royalty (and the revision will then be taken to be a new assessment for the purposes of this Act). (3) For the purposes of making an assessment under subsection (1) or (2), the Treasurer may estimate the amount of royalty payable by a person and may base the estimate on any matter the Treasurer considers relevant. (4) The Treasurer must cause a copy of an assessment under this section to be served on the person liable to pay the royalty or to whom a refund is payable. (5) If, as a result of the Treasurer's assessment, a lower amount of royalty is payable for the relevant return period or periods, the Treasurer must— (a) refund the amount of the excess to the person; or (b) set off the amount against a future liability to make payments of royalty under this Act. (6) A person on whom a copy of an assessment is served may, within 1 month after the date of service, appeal against the assessment to the ERD Court. (7) On the hearing of an appeal, the ERD Court may, if satisfied on the basis of evidence provided by the appellant that the assessment of the Treasurer is incorrect, vary the assessment of the Treasurer to such extent as it thinks fit. 17C—Recovery of royalty where appeal lodged The fact that an appeal has been lodged under section 17B but not yet determined does not in the meantime affect the assessment to which the appeal relates, and the amount of any royalty or civil penalty amount determined as being payable under this Act as a result of the assessment may be recovered as if no appeal had been lodged. 17CA—Returns (1) A tenement holder must, not later than 31 January and 31 July in each year, furnish the Director of Mines with a return in a manner and form determined by the Director of Mines. (2) A return under subsection (1) must contain the information required by the Director of Mines relating to the conduct of authorised operations, the minerals recovered in the course of those operations (including, but not limited to, minerals intended for sale or utilised in some way by the tenement holder) and the sale or disposal of those minerals during the period of 6 months commencing— (a) in the case of the return due on 31 January in each year—on the preceding 1 July; and (b) in the case of the return due on 31 July in each year—on the preceding 1 January, and must comply with any other requirement specified by the Director of Mines. (3) If a mineral tenement is cancelled, suspended, transferred or forfeited, the tenement holder at the time of cancellation, suspension, transfer or forfeiture must, not later than 3 months after the occurrence of that event, furnish the Director of Mines with a return in a manner and form determined by the Director of Mines containing the information required by the regulations. (4) If a mineral tenement is due to expire, the tenement holder must, on or before the date of expiry, furnish the Director of Mines with a return in a manner and form determined by the Director of Mines containing the information required by the regulations. (5) If a tenement holder has applied for an approval to surrender the mineral tenement, the tenement holder must comply with any prescribed requirements as to the furnishing of a final return to the Director of Mines. (6) A return under this section must be accompanied by any information, samples or other material required by the Director of Mines. (7) The Director of Mines may, on application or on the Director's own initiative, extend the date or time by which or within which a return must be furnished under this section. (8) A person who fails to comply with this section is guilty of an offence. Maximum penalty: $120 000. (9) The regulations may exempt a person, or a class of persons, from a requirement of this section. (10) An exemption— (a) may be granted absolutely or on conditions; and (b) remains in force for the period specified in the regulations. 17D—When royalty falls due (general principles) (1) Subject to this Act, royalty will fall due— (a) if the day on which a determination of the value of the minerals is made for the purposes of assessing royalty falls during the period between 1 January and 30 June (both dates inclusive) in any year—on 31 July of that year; (b) if the day on which a determination of the value of the minerals is made for the purposes of assessing royalty falls during the period between 1 July and 31 December (both dates inclusive) in any year—on 31 January of the following year, (but the Treasurer may, after consultation with the Minister, on application by the person liable to pay the royalty or of his or her own motion, extend the date on which the royalty will fall due). (1a) Subsection (1) does not apply to the extent that a designated tenement holder under section 17DA must pay royalty on a monthly basis. (2) Despite subsection (1), any royalty on minerals recovered from land within a mineral tenement will be due and payable (including for the purposes of the imposition of a penalty amount for unpaid royalty under this Act)— (a) in the case of a mineral tenement other than a private mine— (i) when the mineral tenement is being transferred, surrendered or forfeited; or (ii) when the mineral tenement is suspended or cancelled; or (iii) when the mineral tenement expires; or (b) in the case of a private mine—when the declaration of the relevant area as a private mine is revoked; or (c) at any other time in accordance with the regulations. (3) The Treasurer may, after consultation with the Minister, on application by a person liable to pay royalty or of his or her own motion, exempt (on such conditions as the Treasurer thinks fit) a person from the operation of subsection (1) or (2) if the Treasurer is satisfied that it is not reasonably practicable for the person to strictly comply with the requirements of this section. 17DA—Special principles relating to designated tenement holders (1) In this section— designated tenement holder—see subsection (2); half‑year period means— (a) 1 July to 31 December in a financial year; and (b) 1 January to 30 June in a financial year. (2) A designated tenement holder is a tenement holder who, in relation to a particular financial year (the relevant financial year), is designated by the Treasurer, after consultation with the Minister, by notice served on the tenement holder, as being a tenement holder to whom this section applies. (3) The Treasurer may only make a designation under subsection (2) in relation to a tenement holder if— (a) the royalty paid by the tenement holder in relation to the financial year immediately preceding the relevant financial year exceeds $100 000, or is expected by the Treasurer to exceed $100 000; or (b) taking into account the amount of royalty paid by the tenement holder, or expected by the Treasurer to be paid by the tenement holder, in relation to the financial year immediately preceding the relevant financial year, the Treasurer expects that the royalty to be paid by the tenement holder in relation to the relevant financial year will exceed $100 000; or (c) a mine in relation to which royalty payments are to be made was not in production during the financial year immediately preceding the relevant financial year, or is expected by the Treasurer to be subject to increased production in the relevant financial year, and the Treasurer expects that the royalty to be paid by the tenement holder in relation to the relevant financial year will exceed $100 000; or (d) the Treasurer expects that the amount of royalty to be paid by the tenement holder in relation to the relevant financial year will be within 5% of the $100 000 threshold established by this section and accordingly determines to designate the tenement holder as being a tenement holder to whom this section applies. (4) For the purposes of subsection (3), the Treasurer may make or apply any estimate in order to determine whether or not it is expected that the royalty to be paid by a tenement holder in relation to a particular financial year will (or will not) reach or exceed a particular amount. (5) A designated tenement holder will, in relation to a relevant financial year, pay royalty on a monthly basis (rather than in accordance with section 17D(1)). (6) For the purposes of subsection (5)— (a) the Treasurer must, by 31 March immediately preceding the relevant financial year, serve a notice (a notice of assessment) on each designated tenement holder setting out the monthly payments of royalty that the tenement holder must make for the relevant financial year (subject to the operation of the succeeding subsections); and (b) the designated tenement holder must then pay royalty on or before the last day of the month that immediately follows each month in the relevant financial year. (7) A monthly payment set out in a notice of assessment will be an amount which the Treasurer determines to be a reasonable amount taking into account an estimate made by the Treasurer of the amount of royalty that may be payable on account of the operation of sections 17 and 17A (as the case may require) in relation to the relevant financial year. (8) Subject to subsection (9), a monthly payment in relation to the last month of both half‑year periods in a relevant financial year will be the amount set out in the notice of assessment for that month adjusted to take into account any overpayment, or underpayment, of royalty that would otherwise occur over the half‑year period after applying the provisions of sections 17 and 17A (as the case may require) so as to ensure that the correct amount of royalty is paid in relation to the half‑year period by the end of the month that immediately follows the end of that period. (9) If an adjustment under subsection (8) will otherwise result in an entitlement to a refund of an amount to be paid as royalty in relation to the relevant half‑year period, the Treasurer may, at the Treasurer's discretion— (a) refund the amount of the excess to the tenement holder who has been paying the monthly amounts; or (b) set off the amount against a future liability to make payments of royalty under this Act. (10) The Treasurer may, after consultation with the Minister, on application by a person liable to pay royalty under this section or of his or her own motion— (a) by notice served on the tenement holder, vary a notice of assessment that has been issued to a designated tenement holder under this section, with the variation to have effect from a month in the relevant financial year specified by the Treasurer; (b) extend the date on which royalty will fall due under this section. 17E—Penalty for unpaid royalty (1) If royalty payable on minerals under this Act is not paid on or by the day on which it fell due, the person liable to pay the royalty is liable to pay a penalty amount, in addition to the amount of royalty unpaid, equal to $1 000 plus the prescribed amount for each month (or part of a month) for which the royalty remains unpaid. (2) The Treasurer may, at the Treasurer's discretion and after consultation with the Minister, remit a penalty amount payable under subsection (1) by any amount. (3) A penalty amount may be recovered by the Crown as a debt due to the Crown in any court of competent jurisdiction. (4) In this section— prescribed amount is to be calculated as follows: where— PA is the prescribed amount; R is the amount of unpaid royalty; MR is the market rate that applied under section 26 of the Taxation Administration Act 1996 on the day on which the royalty fell due. 17F—Processed minerals For the purposes of the imposition of royalty under this Act, a reference to minerals includes a reference to processed minerals or, as the context requires, refined mineral products. 17G—Means of payment Royalty must be paid in accordance with any requirement prescribed or authorised by or under the regulations. 18—Passing of property in minerals (1) Property in minerals recovered from mineral land passes to the tenement holder (including to the proprietor of a private mine), on the day on which a determination of the value of the minerals is made for the purposes of assessing royalty payable on the minerals under section 17 or, if royalty is not payable on the minerals, on recovery of the minerals. (2) The liability of a tenement holder (including the proprietor of a private mine) to pay royalty to the Crown in respect of minerals recovered from mineral land arises when property in the minerals passes to the tenement holder or the proprietor. (3) A liability under subsection (2) is a debt due to the Crown.