Mining Royalties

In reply to Mr PATTERSON (Morphett) (27 August 2024).

The Hon. S.C. MULLIGHAN (Lee—Treasurer, Minister for Defence and Space Industries): I have been advised:

The proposed amendments will strengthen the existing royalty provisions in sections 17(5) and 17(6) of the Mining Act. The updated provisions will support the preservation of state royalty revenues, consistent with the intent of the act, by ensuring that minerals are valued fairly for the purpose of calculating royalty.

The amendments will enable the Treasurer to determine the market value of minerals sold pursuant to a contract with a genuine purchaser at arm's length, in the unlikely event that the quoted price of the minerals is significantly lower than the value of the minerals compared with a recognised market index or reference price.

Following the proposed amendments, where the Treasurer is not satisfied that the minerals sold under a contract between a royalty payer and an arm's length purchaser reflects the market value of the minerals, the market value of the minerals will be determined according to an observable market index price in a relevant industry market, the declaration of a price or method by the Treasurer (after consultation with the minister), the use of a price obtained for comparable arms-length transactions, or (if none of those options apply) a reasonable and validated estimate of the value of the minerals.