Royalties hike to hurt quarry operators in SA

The new state budget in South Australia has attracted some criticism over an increase in mining royalties.

The Extractive Minerals Royalty rate has been increased from 35 cents per tonne to 55 cents, an increase of 57 per cent.

In addition, private mines will have to pay royalties on minerals upon the first transfer of ownership.

In combination, these measures have been slated to put $3.2 million per year back into state government coffers.

The South Australian Chamber of Minerals and Energy (SACOME) chief executive Jason Kuchel described the royalty increase as excessive.

"This 57 per cent increase in royalties will hit sand and gravel quarry operators hard, and have flow on effects in the local construction sector," he said.

However, the South Australian government has implemented a number of budgetary measures welcomed by SACOME, including funding of $32.2 million for a new drill core reference library.

"Our state’s drill core library provides essential information in the search for ore deposits and petroleum reserves and is recognised as one of the best drill core reference libraries in the world," Kuchel said.

"The current facilities will reach capacity by the end of the year so a new facility is vital to keep South Australia at the forefront of providing geological data to companies who are looking to invest in our state."

In order to prioritise investment in the oil and gas sector, the SA government has deferred royalty payments for five years for unconventional gas projects, which is expected to boost development of the state’s deep shale gas industry.

In addition, $4 million has been allocated for an upgrade to the Innamincka airstrip, which will service the transport of FIFO workers to oil and gas projects.

The Program for Accelerated Exploration (PACE) will also receive a boost of $4 million.

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