Mineral royalty

Minerals in the NT are owned by the people of the NT. Once a mineral is removed from the ground it cannot be replaced.

Companies mining minerals pay to remove non‑renewable resources. This payment is known as a royalty.

Mining royalties are typically the largest contributor to the NT’s own‑source revenue. Royalties are used to fund important public services such as schools, hospitals and community safety.

Under the Mineral Royalty Act 1982, royalty is liable at the greater of 20% of net value (profit) minus $10,000 or a minimum royalty which is 1%, 2% or 2.5% of the gross production revenue (sales value of minerals).

The formula to determine the net value is:

The net value can be either negative (if a mine makes a loss) or positive (when a mine is returning a profit). Where the net value is negative, it can be offset against profits in future years.

The minimum royalty for a mine is 1% in its first year of operation since 1 July 2019, 2% in its second year of operation and 2.5% for every subsequent year.

Here is an example of the calculation of royalty for the 2023‑24 financial year:

Typically, only mature and more profitable mines will eventually transition to the 20% net value royalty while the less mature, unprofitable or marginal mining ventures will only have to pay the minimum royalty.

Download information as a fact sheet: MRA 1982 fact sheet PDF (547.2 KB)

The NTnow uses an ad valorem scheme with multiple rates to calculate mineral royalties. Royalties for minerals are calculated based on the value of a mineral and by applying a royalty rate based on the level of processing performed on the mineral. A deduction is allowed from the value of the mineral for intra-NT shipping costs.

Royalty = RR*(V – SC)

Where:

• RR - is the royalty rate of a mineral
• V - is the value of the mineral extracted from a mining operation
• SC - is the amount allowed to be deducted for shipping costs within the NT.

The ad valorem mineral royalty scheme focuses on the value of the minerals, which considers changes in the market value of minerals and downstream value‑adding processes. Comparatively, the ad valorem scheme calculation is simple, competitive, and comparable to other modern royalty schemes.

Schedule 1 in the Mineral Royalties Act 2024 outlines the royalty rate that applies to a mineral. Where a mineral is not named in the schedule, the applicable royalty rate will be determined by the extent of treatment, refinement or processing as described in the 4 categories set out in section 9 of the Act. Each category describes stages of treatment, with a lower royalty rate applying as a mineral receives more extensive treatment.

Download information as a fact sheet: MRA 2024 fact sheet DOCX (71.1 KB)