Content in this section is pending review following the staged repeal of legislation process. References to clauses in regulations may not be up to date.

DRE is progressively updating all policies, forms, templates and guidelines to reflect the new clause numbers in the remade Mining Regulation, Petroleum Onshore Regulation and Petroleum Offshore Regulation. For a comprehensive list of the changes go to the Staged repeal of legislation External link web page.

Mineral resources in New South Wales are mostly owned by the Crown. This means that the royalties and economic benefits from mining contribute to providing services to the people of New South Wales.

Mineral royalties are jointly managed by the Division of Resources and Energy’s Royalty Advisory Services unit and the Office of State Revenue.

What is a royalty?

A royalty is the amount charged by the Crown for the transfer of the right to extract a mineral resource. They are divided into coal royalties, mineral (non-coal) royalties and petroleum royalties.

The royalty rates are prescribed in legislation.

How are royalties collected?

Royalties are collected by the Office of State Revenue via their Royalty Online Service (ROS). The collection of mining royalties is based on 'self assessment', which means it is the responsibility of the mining lease holder to calculate, pay and lodge their returns by the due date.

For all enquiries about the Royalty Online System (ROS) and payment of royalties, contact the Office of State Revenue at returns@osr.nsw.gov.auor phone 1300 139 817.

Guidelines about the collection of royalties can be downloaded from: http://www.osr.nsw.gov.au/royalties/mineral/factsheet

When are royalty returns and payments due?

Mining royalties in NSW are payable on minerals, which are divided into coal royalties, mineral (non-coal) royalties, and petroleum royalties. Mineral royalty returns and payment due dates are based on the mineral type. The following shows when the returns are to be lodged and the due dates.

Mineral type

Lodgement frequency

Due date

Coal

Monthly

21 of every month

Coal

Annually

31 July each year

Petroleum

Monthly

Last day of calendar month

Petroleum

Annually

31 July each year

Non-coal > 50,000

Quarterly

30 April (for the period of 3 months ending on 31 March)
31 July (for the period of 3 months ending on 30 June)
31 October (for the period of 3 months ending on 30 September)
31 January (for the period of 3 months ending on 31 December)

Non-coal < 50,000

Annually

31 July each year

Royalty revenue

In 2014-15 the royalty revenue generated by the NSW minerals sector was $1.27 billion, with coal accounting for approximately 91% of the total.

royalty revenue

Royalty revenue $AUD million
YearCoalOtherRoyalty
2006-07 $411.94 $76.96 $488.89
2007-08 $494.39 $79.17 $573.57
2008 -09 $1,228.87 $53.66 $1,278.54
2009-10 $915.36 $69.93 $985.29
2010-11 $1,152.27 $88.06 $1,240.33
2011-12 $1,361.38 $103.02 $1,464.40
2012-13 $1,223.78 $94.67 $1,318.45
2013-14 $1,225.19 $96.06 $1,321.25
2014-15 $1,161.91 $112.45 $1,274.36

Types of royalties

Coal royalties

Royalties are levied on all coal recovered in New South Wales, and two types of coal royalties apply:

  • Ad Valorem Royalty - Royalty for coal is charged as a percentage of the value of production (total revenue less allowable deductions). The coal ad valorem royalty rates are 6.2% for deep underground mines (coal extracted below 400 metres), 7.2% for underground mines and 8.2% for open cut mines. (Royalty Compliance guidelines are available for download from the section below.)
  • Coal Reject Royalty - Royalty is payable if the coal reject is used or disposed of for the purpose of producing energy. Coal reject is defined as a by-product of the mining or processing of coal that has energy value of less than 16 gigajoules per dry tonne or contains more than 35% ash by dry weight. The rate of royalty on coal in coal reject is no more than half the rate applicable to coal.

Petroleum royalties

Royalties are payable at the rate of 10% of the 'well-head value' of the petroleum. The well head is the point where the petroleum reaches the surface and the 'well-head value' is the revenue less certain expenses incurred downstream of the well head.

Mineral (non-coal) royalties

There are two types of mineral (non-coal) royalty:

  • Quantum royalty - Quantum royalty is levied at a flat rate per unit of quantity. The rate of royalty is dependent on the mineral being extracted and is generally utilised for low value to volume minerals such as gypsum limestone, and clays.
  • Ad valorem royalty - Ad valorem royalty is applied to high value to volume minerals.  The base rate applicable for ad valorem minerals is 4% of 'ex-mine' value. The ex-mine value refers to the value of the mineral once it is mined and brought to the surface. In some cases the costs associated with the processing or treatment may be allowable deductions. However, the costs associated with exploration, development and mining of the ore body and the rehabilitation of the site are not allowable deductions.

Privately-owned minerals royalties

Where royalty is collected on minerals not owned by the Crown, legislation requires that 7/8th or 87.5% of the royalty collected is paid to the private mineral owner.

For further information
Royalty & Advisory Services
Phone:
+61 (0)2 4931 6436
Fax:
+61 (0)2 4931 6788
mineral.royalty@industry.nsw.gov.au
Postal:
Royalty & Advisory Services, NSW Department of Industry, Resources & Energy, PO Box 344 Hunter Regional Mail Centre NSW 2310 Australia
Office:
516 High Street Maitland NSW 2320 Australia Map