Australia: Queensland duty changes for mining exploration and prospecting permits

In its January 2012 mid year economic review the Queensland Government announced its intention to change the Queensland stamp duty laws so that direct and indirect transfers of ownership of mineral and petroleum exploration and prospecting permits will become subject to duty.

Presently, only mineral and petroleum leases, which are characterised as 'land' under the Queensland Duties Act 2001, attract duty under the transfer duty and 'landholder' provisions. The landholder (previously called the 'land rich') provisions currently impose duty on acquisitions of prescribed levels of interest in corporations that own mineral or petroleum lease assets, but not resource exploration and development rights.

If introduced, the change is likely to mean the following permits and authorities will be treated as 'land' for Queensland duty purposes:

• prospecting and exploration permits under the Mineral Resources Act 1989;
• authorities to prospect under the Petroleum and Gas (Production and Safety) Act 2004 (including those under the previous Petroleum Act 1923);
• geothermal exploration permits under the Geothermal Exploration Act 2004; and
• GHG exploration permits under the Greenhouse Gas Storage Act 2009.

Given the potential cost to explorers in undertaking dealings concerning prospecting permits, ownership structure and valuation principles may need to be considered by mining and oil & gas enterprises well in advance of developing the resource.

It remains to be seen whether or not an LNP Government (if elected on 24 March 2012) will implement the change.

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This report does not comprise legal advice and neither Gadens Lawyers nor the authors accept any responsibility for it.