DEPARTMENT OF MINES AND ENERGY
www.nt.gov.au
MINING MANAGEMENT AMENDMENT BILL
LEVY ON MINING REHABILITATION SECURITIES
BACKGROUND
Under the Mining Management Act (MMA) a rehabilitation security is required for any activity
(exploration, mining or extractive) that creates a substantial disturbance to the environment.
Securities are calculated on the level of disturbance for each site.
The Northern Territory has a number of significant legacy mine sites which pose high risk to the
natural environment. Most legacy sites were created before 2005 and thus pre-dated the NT
Government policy of requiring operators to lodge a full 100% rehabilitation security plus a 15%
contingency fee. As a result, many mines that operated prior to 2005 have either inadequate or
non-existent securities. Several are causing, or have the potential to cause, significant ongoing
environmental impacts.
Currently the estimated level of historical mining liabilities for the Northern Territory is
$1 billion. It is in the collective interest of the mining sector to see legacy sites addressed as their
continuing presence serves to reinforce community opposition to mining, especially when new
developments are being proposed.
In line with the direction of Government, the Department of Mines and Energy (DME) has
developed a proposal to introduce a levy on mining securities to assist the agency in its role to
regulate and grow the NT’s mining sector. However the primary objective of the levy is to
generate necessary funds to begin addressing historical mining impacts, and to ensure that current
and future exploration, mining and extractive activities are appropriately regulated to minimise
environmental damage.
In addition to the levy, DME has also been preparing further amendments to enhance operation of
the Mining Management Act.
SUMMARY OF NEW LEVY AND DISCOUNTED SECURITY REQUIREMENTS
Government is seeking to introduce a non-refundable annual levy of 1% on the total calculated
rehabilitation cost applied to each mining operation authorised under the MMA, in return for a
decrease of 10% in the total security amount payable by operators. The Department will still hold
a minimum 100% security for each site as the 10% discount to be provided to operators is taken
out of the earlier mentioned contingency fee which is applied to securities.
Under the proposed new arrangements, a 1% 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 year. In return, operators will
receive a 10% reduction in the level of security they need to lodge with DME.
Operators will be able to pay the annual levy fee in quarterly payments or make other
arrangements. The day to day administration of the levy, with exception of the 1% levy rate (to be
mandated in the Act itself), will be by Regulations to be drafted and in place by 1 October 2013
which is when the proposed levy is to commence. For the first year of operation 1 October 2013
will be used for calculation of the levy based on the level of operator security held on that date.
Under the new levy, 90% of the current 353 authorised operators who lodge rehabilitation
securities will pay an annual levy fee of $2,000 or less per site, and 74% will pay an annual levy fee
of $500 or less per site. About 5% of authorised operators will pay an annual levy in excess of
$10,000 per authorised site.
For operators lodging securities in cash, the proposed 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.
EXAMPLE OF APPLICATION OF THE LEVY AND DISCOUNTED SECURITY
Smaller Operator – Lodged Cash Security
Current security lodged by Operator:
A 10% discount on this security reduces it to:
Cash refunded back to Operator:
1% Levy on the new security paid by Operator:
$10,000
$9,000
$1,000
$90
Larger Operator – Lodged Cash Securities
Current security lodged by Operator:
A 10% discount on this security reduces it to:
Cash refunded back to Operator:
1% Levy on the new security paid by Operator:
$5,000,000
$4,500,000
$500,000
$45,000
USE OF LEVY REVENUE TO BE COLLECTED
Revenue collected under the levy will be used to address legacy mines issues. A Mining
Remediation Fund will be established to hold funds for works on legacy sites. A dedicated Legacy
Mining Unit will be established and other positions will be allocated to areas that work on
minimising legacy impacts, including water monitoring and analysis.
For specific detail on all proposed amendments to the MMA, please refer to the
Mining Management Amendment Bill 2013 (Serial no. 30) introduced into the
Legislative Assembly on 16 May 2013. Copies of the Bill, Explanatory Statement and the
Minister’s Second Reading Speech can be accessed via the Department of the Legislative
Assembly website by clicking on Chamber Documents and then Bills before the Assembly
(Twelfth Session).
Any enquiries regarding the proposed levy please call DME on (08) 8999 6567.