South Australia has moved to increase mining royalties, with the new top rate at 5% for metallic and energy minerals.
Announcing in its latest state budget, from July next year, a new three level system will replace the existing two tiered system, which currently charges 3.5% for existing mines and 1.5% for new mines.
A new top rate of 5% will apply to metals such as copper concentrate, uranium oxides, minerals sands and iron ore.
The existing 3.5% rate will continue for refined metals such copper, gold, silver and steel, with the notion that the lowered rate will encourage adding value to South Australia’s minerals.
New mines will still see a discounted rate; however this has been increased from 1.5% to 2%, and will only remain in place for the initial five years of operation.
Existing agreements for new mines will be retained.
Quarry minerals such as sand, gravel and stone will stay at the current level of 35 cents per tonne.
South Australian treasurer Kevin Foley said the royalty increase was done to bring the state in line with Western Australia.
While Foley outlined this increase as fair, industry bodies showed their disappointment of this rate increase on top of the Federal Government’s planned Mineral Resources Rent Tax.
In the State budget, South Australia also announced that $29.9 million will be going to the refurbishment of the Port Bonython jetty over two years.
However, no money has been granted towards its development as a bulk commodities port for the use of the mining industry.
An additional $4.5 million has been pledged over four years to go to the development of the Upper Spencer Gulf Enterprise Zone, and the establishment of an engineering hub to service the mining industry.
South Australia is predicting a mining boom in the state, and is pushing to have 16 mines in operation by the end of 2010.