Northern Territory

Explorer / September 2023

Royalty reform

AMEC has been calling for royalty reform since the 2017 revenue paper discussion introduced the hybrid regime – both an ad valorem and profit based royalty. AMEC advocated for the adoption of the WA tiered royalty approach. this was taken up by the Opposition at the last election, and it is pleasing that the Government has accepted that the NT has the most complicated regime in Australia and it needs to change. The Government has embarked on a comprehensive reform to the entire regime. There is a tight timeframe for reform, and AMEC has held an industry workshop and met with Treasury twice to discuss the reform model. AMEC supplied a detailed submission to the first consultation which closed on 4 August. A second consult is anticipated before Christmas on the regime model and possibly the rates within that regime. Legislation will then be drafted for introduction early next year.

The NT needs a royalty regime that is tiered, focussed on driving processing investment to incentivise going downstream, modelled blatantly on Western Australia: 7.5% for bulks (iron ore); 5% for beneficiation (nickel/copper); and 2.5% for metal (gold). However, an improvement on the WA model would be the inclusion of a distinct battery chemical royalty levied on the feedstock. This exists for lithium royalties in WA (from advocacy by AMEC).

Environmental reform

The proposed Environment Protection Legislation Amendment (Mining) Bill 2023 is a 2016 election commitment. The Government is seeking to move the regulation of mining’s environmental impacts to the Department of Environment, Parks and Water Security (DEPWS). AMEC has anticipated these reforms for the last seven years, and disappointingly the consult has begun with less than a year to the 2024 election. AMEC has met with the Minister for Mining, both the Department of Industry, Tourism and Trade, and DEPWS to discuss concerns.

The new legislation will introduce a new, three tier, licensing system to manage mining activities, underpinned by general environmental duties. A tiered structure built around risk criteria and standard conditions that AMEC are concerned will not be consulted upon before the legislation passes.

A more immediate concern is the four year transitions for mining activities, three years for exploration, and single year for care and maintenance. This is challenging for the financing of projects and given the meagre number of operations, the cost to industry surely outweighs the administrative burden.

Legacy Mines Fund stand alone legislation

A consequence of the environmental legislative reforms is that the Legacy Mines Fund will gain its own legislative framework via the Legacy Mines Remediation Bill 2023. As advocated for by AMEC, and similar to the Western Australian Mining Rehabilitation Fund, the new legislation ensures interest generated from the fund will remain in the fund rather than being skimmed by Treasury into wider consolidated revenue. In the recent consultation, AMEC is calling for a stakeholder reference group to be defined in the legislation, and for confirmation from Government that what are currently named “unsecured mining activities” do not become the liability of current tenure holders.

Water licencing transition

The NT is adopting water licencing for mining activities. AMEC has secured an exemption on Exploration Licences for the use of up to 5 mega litres of water, however there will be requirements to monitor use. A key concern for AMEC was the transitional arrangements. Changes recently passed parliament amending the Water Act 1992 have resulted in a streamlined licensing process for mining operations, available until 30 July 2025. Any mining operation that does not hold all relevant licences or permits as required by 1 August 2025, will be in breach of the Act. Changes to the Act, covered in sections 71N to 71R of the Water Act and Regulation 14D, have resulted in water extraction licence decisions that are not able to be appealed, and removes the requirement for a notification process that invites public comment. Licence application forms and further information can be found on the NT Water website.

AMEC has made the following submission on behalf of member companies:

To learn more please contact Neil van Drunen on
0407 057 443.