All minerals recovered from mineral land in South Australia are subject to the provisions as specified in the Mining Act 1971 and the Mining Regulations 2020.
Royalty returns
Electronic royalty returns are submitted via Tenement Returns e-Lodgement (TReL). An instruction document is available to assist TReL users with their submissions.
| Reporting period | Return and royalties due |
|---|---|
| 1 January to 30 June | 31 July of that year |
| 1 July to 30 December | 31 Jan of the next year |
Royalty returns must be submitted in the manner and form determined by the Director of Mines, as published in the SA Government Gazette on 17 December 2020 (page 5893) (PDF 6.9 MB)
Royalty rates
| Mineral type | Applicable royalty rate |
|---|---|
| Refined mineral products | 3.5 per cent of the value of the minerals |
| Mineral ores and concentrates | 5.0 per cent of the value of the minerals |
| Industrial minerals | 3.5 per cent of the value of the mineral |
| Minerals mined for a prescribed purpose | 3.5 per cent of the value of the minerals |
| Extractive minerals | 52 cents per tonne (as prescribed in the Mining Regulations) |
Reduced royalty for new mines
In the 2018/19 State Budget the Treasurer announced that the new mine rate would cease from 30 June 2026 and no new applications could be lodged after 30 June 2020.
From 1 July 2020 any approved mines will be eligible for the new mine rate for up to five years from the date of the first royalty being payable, or until 30 June 2026, whichever occurs first.
Pursuant to section 17A of the Mining Act 1971 the new mine rate commences on the date that first royalty is due and payable. The reduced royalty rate applies for a maximum period of ten consecutive 6-month returns.
The reduced royalty for a new mine is currently set at a rate of 2.0 per cent of the value of the minerals. The reduced royalty rate for new mines is not available for extractive mineral production.
Royalty payments by councils
In the 2018/19 State Budget the Treasurer announced that from 1 July 2019 councils would no longer be required to pay royalty on minerals recovered from borrow pits for their council operations. Consequently, June 2019 returns were the last period imposing royalty on those minerals. Councils are not required to pay royalty on extractive minerals recovered from borrow pits for their council operations. However, councils are still required to submit mining returns reporting the quantities of minerals recovered from borrow pits and provide an estimated market value for those minerals. This data is used for statistical reporting purposes.
Royalty will continue to be payable by councils on the minerals recovered from mineral land pursuant to the Mining Act 1971.
Extractive minerals
Section 6(1) of the Mining Act 1971 defines extractive minerals as:
'...sand, gravel, stone, shell, shale or clay, but does not include:
(a) any such minerals that are mined for a prescribed purpose; or
(b) fire clay, bentonite or kaolin; or
(c) proppant sand'.
A portion of the extractive royalty collected is allocated to the Extractive Areas Rehabilitation Fund (EARF) for rehabilitation projects on extractive mineral mine sites. Further details on how to apply to the fund are available on the EARF web page.
To quantify the royalty payable for respect to extractive minerals, the tonnes of minerals recovered is multiplied by the relevant royalty rate.
Reporting sales values for extractive minerals
While royalty returns are the mechanism for calculating royalty and reporting production, information contained in returns also provides valuable statistics about the extractive industry and its contribution to the state. The data collected is also used to measure the economic value of minerals within South Australia and provide insights as to the remaining resources available. As such the reporting of production sales values is a vital component of your return.
Accordingly, tenement holders are requested to provide total sales values in their return (for each commodity recovered) which appropriately reflects the market value of the minerals recovered in the period (ie what the minerals were sold for or, if they were not sold to arms length parties, what it would have cost to purchase from another local quarry).
Royalty returns require disclosure of the total sales value for extractive minerals recovered in the period, not a per tonne value.
Minerals mined for a prescribed purpose
Part 1 of the Mining Regulations 2020 provides guidance as to minerals mined for a prescribed purpose that are excluded from the definition of extractive minerals:
(a) chemical, cement, lime and glass manufacture;
(b) metallurgical flux, refractories and industrial fillers;
(c) foundries, fertiliser, agricultural, jewellery and crafted ornamental uses'
(d) the production of dimension stone.
Dimension stone is defined in the Mining Regulations as:
'...stone that is cut, trimmed and finished to specific dimensions and shapes and includes cut stone, ashlars, monumental stone, roofing slate and flagging stone'.
Any mineral used for a prescribed purpose is subject to the applicable mineral royalty rate. Prescribed costs (allowable deductions) may be applicable in determining the market value of these minerals.
Mining return data and confidentiality
Mining returns are an important part of a tenement holder's obligations under the Mining Act 1971, however the department recognises that some of the information required in returns may be commercially sensitive. The data provided to the department in royalty returns remains confidential and cannot be released without permission, or under certain circumstances with the consent of the Treasurer.
Production and sales related information is periodically made available to the public in statistical reports. That information is sourced from collated royalty return information over the relevant reporting period in order to maintain confidentiality.
Examples of the data released by the department can be found on the resource production statistics page of this website.
Determining market value for non-extractive minerals
In order to determine the royalty liability with respect to minerals other than extractive minerals an ad valorem calculation is made by determining the market value at a time set by the Act, minus prescribed costs (if applicable) and multiplying that value by the relevant royalty rate percentage. To calculate a royalty liability for non-extractive minerals four factors must be identified:
- The relevant royalty rate
- Market value
- Applicable timing of the valuation
- Any prescribed costs to be deducted
The Act defines market value and specifies the applicable timing of valuation through a list of valuation methods. Each of the valuation methods are explained below.
The person liable to pay royalty cannot choose a valuation method, rather the methodology is to be applied sequentially - eg where the first valuation method does not apply, the second valuation will be applied, however where the second valuation method does not apply, the third will be applied, and so forth.
The first valuation method (in section 17(5) of the Act) determines the market value based on the price the minerals were sold under a contract with a genuine purchaser at arms length. A contract with a genuine purchaser at arms length indicates a transaction between two independent parties in which both parties are acting in their own self-interest. Both the person liable to pay royalty and the purchaser are independent (unrelated), possess equal bargaining power, are not under pressure or duress from the opposing party, and are acting in their own self-interest to attain the most beneficial deal.
Section 17(7) of the Act provides for the relevant components to consider when determining the contract price for the minerals sold. Where there is no contract with a genuine purchaser at arms length, the Act lists a second, third, fourth and fifth valuation method in a cascading order.
Where the first valuation method does not apply, the second valuation method (in section 17(6)(b)(i) of the Act) determines the market value according to any prices quoted or obtained on a relevant industry market applicable to the mineral. This is commonly referred to as the ‘spot price’.
Where the second valuation method does not apply, the third valuation method (in section 17(6)(b)(ii) of the Act) determines the market value based on a price set by the Treasurer, or a method for determining an indicative price set by the Treasurer.
Where the third valuation method does not apply, the fourth valuation method (In section 17(6)(b)(iii) of the Act) determines the market value based on any price obtained in relation to sales of minerals of the same kind where those sales were to a genuine purchaser at arms length within the same reporting period. If no relevant transactions have occurred in that reporting period, market value can be based on any price obtained by other parties within the industry in relation to sales of minerals of the same kind on the open market within the same reporting period.
Where the fourth valuation method does not apply, the fifth valuation method (In section 17(6)(b)(iv) of the Act) allows the person liable to pay royalty to estimate the reasonable value of the minerals. That estimate will be determined in accordance with any requirement, and accompany any information prescribed by the regulations.
In some situations, none of the first four valuation methods are applicable and the person liable to pay royalty may need estimate their liability using their own method. In determining this value, it is expected that consideration would be given to all the information available, supply, demand and other market factors, the last known arms length sale and any other relevant factors.
Where the fifth valuation method applies, the royalty payer must provide accompanying information explaining the reason the other valuation methods could not be applied, and how the reasonable estimate was determined.
Declared commodities
On 17 December 2020, a Notice was issued in The South Australian Government Gazette (on page 5894) declaring specified types of mineral ores and concentrates, refined mineral products and industrial minerals.
The South Australian Government Gazette can be viewed via
The South Australian commodity list can be viewed via
More information on mineral commodities
Declared industry markets
On 17 December 2020, a Notice was issued in the The South Australian Government Gazette (on page 5895) declaring industry markets recognised by the Treasurer for the purpose of determining the market value of minerals in accordance with section 17(6)(b)(i) of the Act.
Declared method for heavy mineral sand concentrate
On 17 December 2020, a Notice was issued in The South Australian Government Gazette (on page 5893) declaring the method for determining an indicative value for minerals including zircon, ilmenite, rutile, monazite and leucoxene in accordance with section 17(6)(b)(ii)(B) of the Act.
Declared indicative price for salt
On 17 December 2020, a Notice was issued in The South Australian Government Gazette (on page 5895) declaring an indicative price for salt in accordance with section 17(6)(b)(ii)(A) of the Act.
Changes to royalty provisions from 1 July 2023
Changes to royalty provisions in South Australia took effect from 1 July 2023.
The information below outlines the changes and the potential impacts for tenement holders following amendments to Regulation 11 of the Mining Regulations 2020.
Deductions (Prescribed Costs) are restricted to 30 per cent of total sales revenue
From 1 July 2023, a 30 per cent threshold applies to the maximum deductions able to be used in the calculation of mining royalties payable in a royalty return period.
For tenement holders under the Mining Act 1971, the 30 per cent threshold applies to the total sales value reported on a per tenement basis. Importantly, sales values relating to extractive minerals are not considered in the total sales values for a tenement when calculating the 30 per cent threshold.
Where a tenement holder has deductions which exceed 30 per cent of the total sales value for a tenement, only the amount up to and reflecting 30 per cent will be relevant to calculating royalty payable.
Tenements where deductions do not apply, such as those only recovering extractive minerals, are not impacted by the change.
The change impacts royalty returns for the period ending on 31 December 2023, which are due for submission on 31 January 2024. The Tenement Return electronic Lodgement (TReL) system will reflect only limited components of the change given the system will be updated as part of the Mining and Exploration Regulation System (MERS) Project.
Prescribed costs (allowable deductions)
Prescribed costs are costs prescribed in the Regulation 11 of the Mining Regulations 2020, up to an amount that does not exceed 30 per cent of the market value of the minerals (excluding the total market values of extractive minerals) on which royalty is payable, that can be deducted from the market value to calculate the royalty liability. These deductions can affect the market value before and after the minerals leave the relevant mining tenement.
Prescribed costs for the purposes of section 17(8) and (8a) of the Act, costs of the following kinds, up to an amount that does not exceed 30% of the market value of the minerals on which royalty is payable, are prescribed:
- costs (excluding GST) genuinely incurred in transporting the minerals to a point of sale (including, for example, packaging, storage, loading, permit, fees, insurance and depreciation);
- in the case of section 17(8a)—costs (excluding GST) genuinely incurred in shipping the minerals to a genuine purchaser in a sale at arms length;
- any other costs (excluding GST) determined by the Minister to be a cost of a prescribed kind for the purposes of section 17(8) or (8a) of the Act (or both), (which may vary according to a particular tenement holder, class of tenement holder, or all tenement holders).
Designated tenement holders and monthly royalty payments
The Mining Act 1971 requires royalty payers with an annual royalty liability greater than (or expected to be greater than) $100,000 to make monthly royalty payments. Annually in March, the Treasurer issues a Notice of Assessment to all royalty payers subject to this provision. These royalty payers are referred to as Designated tenement holders.
If a Designated tenement holder expects a royalty variation of more than ten per cent of the value referenced in the Notice of Assessment they should contact the Resource Royalties Team to have their notice amended.
Payment of royalties
Royalty payments can be made by direct bank transfer to:
| Bank: | ANZ, 18/83 Pirie St, Adelaide SA 5000 |
| Account name: | Department for Energy and Mining |
| ANZBSB: | 015-101 |
| Swift code: | ANZBAU3M |
| Account number: | 838530013 |
| Payment details: | Email: DEM.Royalty@sa.gov.au Please forward remittance advice |
| ABN: | 83 768 683 934 |
For more information on mineral royalties in South Australia contact:
The Resource Royalties team
Email: DEM.Royalty@sa.gov.au
Phone: +61 8 8429 2512
Late or non-lodgement of a mining return
Returns not submitted by the applicable due date will be subject to an Expiation Fee of $1,000 as referenced in Schedule 4 of the Mining Regulations 2020.
Penalties and interest for unpaid royalty
When royalty has not been paid by the due date, penalty and interest may be applied under section 17E of the Mining Act 1971.
Royalty compliance
The Resource Royalty Team uses risk evaluation techniques to identify and monitor compliance with the Mining Act 1971 and Mining Regulations 2020.
It aims to ensure that tenement holders pay the correct amount of royalty and have retained the necessary records to substantiate their royalty calculation(s).
The department's compliance philosophy is based on:
- obtaining a maximum level of voluntary compliance
- ensuring tenement holders have a clear understanding of their obligations
- identifying risk areas for pro-active investigation
- applying the appropriate treatment for non-compliance
- treating tenement holders in a fair and equitable manner.
Authorised investigations (royalty audits)
This information is provided to help you understand the audit process and answer some questions you may have. It also provides you with some details of your rights and obligations relating to audits.
Tenement holders are selected for a royalty audit in a variety of ways, including:
- projects designed to target specific problems or issues
- industry trend analysis
- information provided by members of the community
- follow-up of information received from a variety of sources
- random selection.
The Resource Royalties Team anticipates that all tenement holders will be audited at least once every 5 years.
When undertaking an audit the authorised officer will:
- Write, telephone or visit you to let you know that an audit will be conducted
- Explain the process and the scope of the audit
- Specify the records to be produced
- Give you a reasonable period to assemble those records for either submission for desk audit or arranging a time and place to interview you or a representative
- Confirm arrangements in writing
- The field audits will be conducted by authorised officers appointed pursuant to section 14 of the Mining Act 1971
- During an audit the authorised officer will conduct interviews and make enquiries to establish compliance with legislation, and both examine and test some of your internal financial records.
You will receive written advice of the outcome of the audit and any proposed action.
- You should ensure that the records the authorised officer has requested are ready for examination. If you require further time to collate the records, please inform the authorised officer prior to the commencement of the audit.
- How long an audit takes depends to a large extent on what type of audit - full audit, interim audit, theme audit or spot check - is undertaken.
- Some audits may be undertaken remotely, when this is the case, documentation can be provided electronically and the audit conducted in the DEM office.
- If you have any questions about the arrangements for the audit or the processes involved, contact the authorised officer for assistance.
Authorised officers have a range of powers. In general, these powers permit the authorised officer to:
- Gain access to buildings and property and remain there
- Inspect, examine and copy any documents or records
- Require a person to answer questions and provide information
- Require a person to take reasonable steps to obtain information relevant to the investigation and to pass it on to the authorised officer. A full list of authorised officer powers can be found under section 14(c) of the Mining Act 1971
- If a tenement holder fails to comply with an authorised officer's lawful requests, it is possible that penalties such as a fine can be applied
During an audit, you are obliged to provide:
- The authorised officer reasonable assistance and facilities
- Complete and honest answers and explanations to questions
- Prompt, full and free access to all relevant information, records, documents, data and systems as required
If an audit is to be conducted, you have the right to:
- Ask for reasonable time to produce your records
- Negotiate the time and place for the investigation with the authorised officer
- Receive written confirmation of these arrangements
During an audit, you have the right to:
- Sight the authorised officer's identification and authority
- Expect the authorised officer to be professional and courteous
- Involve your professional representative in the process
- Ask how long the investigation is likely to take
- Expect your affairs to be treated with strict confidentiality
- Be given the opportunity to explain the reasons for any irregularities, discrepancies, decisions etc.
At the end of the audit, you have the right to:
- Receive an explanation of the results or findings
- Ask the authorised officer how an assessment of royalty payable has been applied
- Ask for advice about the objection and appeal process
- Discuss any aspect of your case with the authorised officer and/or their manager
Tenement holders dissatisfied with an assessment are entitled to appeal against the assessment to the Environment, Resources and Development (ERD) Court. After receiving an assessment, tenement holders have one month to lodge an appeal to the ERD Court.
Information gathered during audit is treated in the strictest confidence and will not be used or divulged except for purposes required by law.
If you feel that you have been treated unfairly or would like to lodge a complaint about services provided please complete the online enquiry form
For more information
The Resource Royalties Team
Phone: +61 (8) 8429 2512
Email: DEM.Royalty@sa.gov.au
