Why is the rental fee being introduced?

The rental fee is intended to fund the New Frontiers exploration program, an initiative to stimulate mineral and petroleum investment in under-explored areas.

Ongoing funding of the New Frontiers program will continue to drive investment in NSW resources.

What will the fee fund?

The Annual Rental Fee will raise approximately $6.5 million annually to fund the continuation of the highly successful New Frontiers program.

The program is a positive tool for attracting explorers to New South Wales, which results in great economic benefits for the State.

The Act states that funds collected under the rental fee can only be used for the purpose of funding authorised investment programs and associated administrative costs.

An authorised investment program refers to the New Frontiers program or any other program or initiative that provides for, or improves, the geoscience information available in respect of State minerals and /or petroleum.

How will the fee benefit industry?

Funds raised from the rental fee will be used to continue the provision of pre-competitive geoscience information to industry and other stakeholders.

Information, such as new geophysical, geochemical and mapping data, will be provided as a result of this initiative to benefit coal, mineral and petroleum exploration activities.

What does the ‘rental fee’ apply to?

The annual rental fee is calculated on the Annual Rental Fee Area (ARFA) for a coal, mineral or petroleum title. The ARFA is a description of the land to which the title applies.

Who has to pay the fee?

Holders of all coal, mineral and petroleum titles, excluding Opal Prospecting Licences and Mineral Claims, are required to pay the rental fee.

When will the rental fee commence?

The rental fee will commence on 1 July 2012.

How much is the rental fee?

Calculation of the charge is based on the area of land covered by a title as outlined below:

Authorisation/Title

Annual Rental fee

Exploration licence (EL)

$0.20 per hectare

$20 per square kilometre

$60 per unit

$0.00002 per square metre

Assessment Lease (AL)

Initial term: $12 per hectare

After initial term: $24 per hectare

Initial term: $3,600 per unit

After initial term: $7,200 per unit

Mining Lease (ML)

$6.50 per hectare

$0.00065 per square metre

Petroleum Special Prospecting Authority (PSPA)

$18.75 per block

Petroleum Exploration Licence (PEL)

Initial term: $60 per block

Second term: $104 per block

After second term: $187.50 per block

Petroleum Assessment Lease (PAL)

Initial term: $9,000 per block

After initial term: $18,000 per block

Petroleum Production Lease (PPL)

$10,000 per block

The minimum payment for all titles is $100.

When is the fee due?

From 1 July 2012 the rental fee will be payable annually on the grant and grant anniversary date of a title.

What options are available for payments?

Payments can be made using all usual payment methods and are to be made in full according to payment terms.

Late payments will attract interest of 15% per annum compounded quarterly from the due date of the invoice.

What transitional arrangements are in place?

Existing titleholders may apply for a determination of the Annual Rental Fee Area (ARFA) and a reassessment of any liability for an annual rental fee.

Applications must be:

  • in writing
  • accompanied by the required information specified on the Department’s website
  • lodged prior to 1 July 2013.

If an application is also made for a part cancellation, the Director General may consider the part cancellation request when making the determination.

Alll applications will be determined on merit.

Following determination by the Director General, applicants will be notified of the outcome in writing.

For offers issued prior to 1 July 2012, a notice and invoice of the required fees will be sent to the applicant, providing 60 days to pay. No waiver will be provided on offers issued from 1July 2012.

Are the rates set for the rental fee equitable?

The rates set for the rental fee are similar to those other States are currently charging; in many cases they are actually lower than other States.

How can liability for the rental fee be reduced?

The rental fee is calculated on the area of land covered by a title. Cancelling areas of a title that are no longer required will reduce liability for the rental fee.

How will title offers made prior to 1 July 2012 be affected?

Applicants whose complete offer documentation is received by the Department prior to close of business Friday 29 June 2012 will not be liable for the rental fee until the grant anniversary date. Any offer documentation received from Monday 2 July 2012, or any offer issued from 2 July, will require the rental fee to be paid in full prior to the grant of a title.

How often will the rental fee be reviewed?

A regulatory amendment is required to change the rental fee.

Will a refund be offered if a title is cancelled?

No. Any liability that arose prior to cancellation will still exist.

Can payment of the rental fee be counted as exploration expenditure?

No. Payment of the rental fee cannot be counted as exploration expenditure.

Who can be contacted for further information?

For additional information on the rental fee contact the:

Geological Survey of NSW
Phone: 02 4931 6696
Email: director.geosurvey@industry.nsw.gov.au