The West Australia Mineral Royalty Rate Analysis
(Review) commenced yesterday with a deadline of 31
October 2013 for submissions.
The Review is the first formal Government review of the royalty
rate since the early 1980s and is designed to achieve an improved
revenue return to the Western Australian community.
Terms of reference
According to the 2012-2013 State budget, the current revenue
target (of a tenth of the total mine head value of a mineral
resource) is not achieved by a 10 percent rate of royalty.
The Review aims to:
examine the ongoing efficacy and appropriateness of the policy
that revenue returned from royalties is broadly equivalent to 10
percent of the total mine-head value of the mineral;
if a benchmark based on 10 percent of mine-head value is
retained, examine the extent to which the current royalty rates
structure produces revenue that differs from the benchmark, and
identify appropriate adjustments that would take revenues closer to
if an alternative benchmark is proposed, examine royalty rate
structures that would achieve the new benchmark; and
address any anomalies identified in the current royalty
Importantly, the Review will not:
consider petroleum royalties;
consider major changes to royalty arrangements;
propose changes to the ad valorem basis of State
consider changes that could have detrimental effects on the
State's revenue base; or
include consideration of magnetite.
Submission and review process
The Government is currently accepting submissions from industry
representatives and interested stakeholders based on the terms of
reference and stakeholder consultation paper (available online at
Submissions will be accepted by email or post until 31 October
After considering the submissions, the Department of State
Development and the Department of Mines and Petroleum will prepare
an issues paper and consult further with relevant parties, before
preparing a report for Government by December 2014.
Although the Review is aimed at 'tweaking' the current
royalty system to achieve increased revenue return, rather than
achieving a complete overhaul, it is a valuable opportunity for
mining tenement holders to have their business concerns
It is a common misconception that the grant of mining tenure, whether it be an Exploration Permit, Mineral Development Licence or Mining Lease, will entitle the holder to access all land within it in order to explore or mine.
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