Royalties System on Minerals

Country / jurisdiction: Australia · Year: 2001 · Status: In force · Level: National · Type: Voluntary

Australia's royalties system on minerals vary by jurisdiction. This system generally incentivises the production of critical minerals, particularly lithium, in comparison to previous legislation.

The state and Northern Territory governments collect royalties on mineral production in return for granting the right to private businesses to exploit mineral resources within their jurisdictions. With limited exceptions, these take the form of output-based royalties imposed as a percentage of the value of production or, less commonly, the volume of production.

Royalty payments are a deduction for company income tax purposes.

In Western Australia, where lithium mining is prevalent, the Mining Amendment Regulations was introduced in 2020 to amend the Mining Regulations of 1981 and incentivise the production of lithium. It states that royalties should be capped at 5% of the value of lithium concentrate, including for lithium hydroxide and lithium carbonate, rather than 5% of the value of the lithium hydroxide or carbonate itself as previously regulated.

Official source: https://www.australiaminerals.gov.au/legislation-regulations-and-guidelines#tax