DMIRS welcomes industry feedback on Regulation 86

The department sought stakeholder feedback on its proposed royalty wording changes of Regulation 86 in the Mining Regulations 1981.
Date: Wednesday, 29 August 2018

The Department of Mines, Industry Regulation and Safety (DMIRS) recently sought stakeholder feedback on its proposed changes to the wording of Regulation 86 in the Mining Regulations 1981 in relation to royalties.

DMIRS’ General Manager Financial Compliance David Norris said more than 400 emails and letters were sent to stakeholders informing them of the proposed changes. Five submissions were received with another five queries responded to directly by phone.

“A common theme from the feedback received, was that the proposed amendments to the royalty on nickel and silver could have the unintended consequence of an increase in the royalty payable for these minerals.  There was also a suggestion to delay the lithium changes and include them in any future review of the applicable royalty rate for further processed lithium products,” said Mr Norris.

Another comment related to keeping low-grade silica, used for flux, at the lower rate for sand and have the option to apply the 7.5 per cent ad valorem royalty rate for sand and silica.

Mr Norris said the department considered all the suggestions and has made the following changes:

  1. The proposed changes to nickel are to be removed from the amendments under Regulation 86 as nickel royalty is calculated using the reference to Regulation 86AB.
  2. The proposed changes to silver are to be amended to now include the following: “if sold as a by-product or in a metallic form”. This will ensure that silver sold in a concentrate as a by-product will retain the 2.5 per cent royalty rate.
  3. Remove the proposed changes to lithium from the amendments under Regulation 86 pending further review.
  4. As specifying sand and silica as separate minerals has not changed the application of the current specific based royalty rates, the proposed amendments will proceed as indicated. The option to convert to an ad valorem royalty rate system is currently not available, however could be considered in a future royalty review.

DMIRS wishes to thank all stakeholders who provided feedback.