The Northern Territory government has introduced major reforms to the way mineral royalties are calculated and administered through the newly passed Mineral Royalties Bill 2024.
The legislation implements a key recommendation to shift from the current profit-based royalty system to an ad valorem or gross revenue-based royalty scheme.
Under the new ad valorem model taking effect on July 1, 2024, mineral royalties in the NT will be calculated as a percentage of the gross revenue from mineral sales.
This replaces the previous “net value” system where royalties were based on mining profits after deducting operating costs.
The specific royalty rates for different minerals have not been announced yet, but the NT government states they will be competitive with other Australian jurisdictions to attract continued mining investment.
Cathryn Tilmouth, Executive Director of the Minerals Council of Australia NT Branch, welcomed the royalty changes as a positive step her organisation had been advocating since 2018.
“The previous hybrid scheme added uncertainty and complexity that reduced investment attractiveness,” Tilmouth said. “While just one part of the solution, this simplified ad valorem model is an important move to enhance the NT’s competitiveness for mining investment.”
However, Tilmouth emphasised other recommendations from government taskforces, such as addressing infrastructure deficits, ensuring energy supply, and developing local skills, remain outstanding priorities as existing NT mining operations approach the end of their production lives by 2030.
The NT’s mining sector is a major economic contributor, but also leaves the territory exposed to market volatility, as highlighted in the recent 2024-25 Budget.
