Levy and security
A key component of changes to the Mining Management Act (MMA) in 2013 was the introduction of an annual levy on mining securities to fund addressing the Territory’s legacy mining liabilities.
This is a non-refundable annual levy of 1% on the total calculated rehabilitation cost applied to each mining operation authorised under the MMA.
To offset the impact to industry, a discount of 10% in the total security amount payable by operators has been applied.
The department still holds a minimum 100% security for each site as the 10% discount provided to operators is taken from a calculated security that includes a 15% contingency component.
Under the new arrangements, the levy will be applied to all authorised operators based on the level of security held for each operator’s site as at 1 July each year. The amount of the levy will not change during the year, even if the security increases in that 12 months.
Operators are able to pay the annual levy fee in quarterly payments or make other arrangements.
For operators lodging securities in cash, the 10% reduction in the level of required security provides an immediate net benefit.
For those operators lodging securities in the form of bank guarantees, a 10% reduction in the level of required security will result in the paying of a lower annual fee charged by the bank for the guarantee. It will also free up 10% in capital that was originally tied up against the former security.
It is important to note the costs used in calculating the security amount are set by the department and are based on third party costs ie the costs that would be incurred by the department should it have to step in and do the work itself.
This results in unit rates that are often higher than those that the mining operator would incur if they had done the work themselves.
|Smaller operator – lodged cash security|
|Current security lodged by operator:||$10,000|
|A 10% discount on this security reduces it to:||$9,000|
|Cash refunded back to operator:||$1,000|
|1% Levy on the new security paid by operator:||$90|
|Larger operator – lodged cash security|
|Current security lodged by operator:||$5,000,000|
|A 10% discount on this security reduces it to:||$4,500,000|
|Cash refunded back to operator:||$500,000|
|1% Levy on the new security paid by operator:||$45,000|
The primary objective of the levy is to generate necessary funds to begin addressing historical mining impacts.
It is also used to ensure current and future exploration, mining and extractive activities are appropriately regulated to minimise environmental damage.
A statutory Mining Remediation Fund has been created with at least 33% of levy funds being held to undertake works to reduce the level of impact legacy sites have on the environment and public safety.
Last updated: 05 December 2016
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