02 Jul 2013

Environmental levy to be imposed on Northern Territory mines

The Northern Territory Government's proposal to impose a new levy on mining companies in order to fund the rehabilitation of legacy mine sites is now a reality.

On 27 June 2013, the Northern Territory Legislative Assembly passed amendments to the Mining Management Act (NT) (MMA) to give effect to this proposal. The amendments have not yet commenced, but according to the Government, they will on 1 October 2013.

The amendments, made by the Mining Management Amendment Act 2013 (NT), mean that both new and existing mine operators will be required to pay a non-refundable levy, calculated at 1% of the security paid under their mining authorisation. Part of the levy collected will be paid into a new Mining Remediation Fund, established under the MMA and used to fund work to minimise and rectify environmental harm caused by unsecured mining activities.  It is understood that, in return for the new levy, operators will receive a 10% reduction in the level of security they need to lodge with the Department.

In relation to existing mining projects, as soon as practicable after the commencement of these amendments, the Minister will provide a notice to operators requiring them to pay the levy. While not specifically dealt with in the MMA, the Minister may deal with the following matters by regulation:

  • payment of the levy on a pro rata basis; and
  • the ability of an operator to enter into an arrangement with the Minister for payment of the levy in instalments.

Amendments have also been made to the MMA which provide for the making of regulations to provide for:

  • a minimum amount of a security to be provided by an operator;
  • procedures for calculating a security; and
  • criteria on which the calculation of a security is to be based.

How will this affect my mining project?

The proposed levy will have implications for mining operators who, from October 2013, may be faced with a levy equal to 1% of the security paid under their mining authorisation. This may however be offset by a reduction in the security to be lodged with the Department.

In preparation for the introduction of the levy, mining operators should consider whether the amount of their environmental bond is capable of being reduced. This will be particularly relevant to operators of mines that have already commenced rehabilitation activities as, under the Department's Security Policy, bonds should be regularly reviewed and adjusted taking into consideration (amongst other things) an operator's progress in rehabilitation.

Further important detail about the scheme has been deferred, to be dealt with by regulation, including when a levy can be paid in instalments. It will be important for mining operators to monitor the release of these regulations in the lead up to the proposed implementation of the scheme in October.

If you would like more information on the implications of this scheme for your project, please contact a member of our team.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.