1 May 2009 - NT Royalty Scheme

AUA welcomes bi-partisan Senate recommendation on single NT royalty system - 1 May 2009

The Australian uranium industry today welcomed a bi-partisan Senate Committee recommendation that the Federal Government press ahead with a profit-based royalty system for uranium development in the Northern Territory.

“The Senate Standing Committee on Economics has correctly determined that uranium mines should be treated like mines for all other commodities in determining appropriate royalty arrangements,” said Michael Angwin, Executive Director of the Australian Uranium Association.

He urged the Federal Government to proceed as soon as practicable with legislation to put the profit-based royalty system into effect.

“Having a single system of royalty assessment and payment in place in the Territory will provide much greater certainty and predictability for potential investors in uranium projects,” Mr Angwin said.

“It is also important for the uranium industry that our commodity has been recognised as requiring the same treatment for royalty purposes as every other mineral,” he said.

Government and Opposition Senators supported extending to uranium the profit-based royalty system that applies to all other minerals in the NT.

Several submissions to the Committee proposed establishing a system of case-by-case assessment of each new uranium mine with royalties payable on the basis of mine revenue, not profit.

Evidence to the Committee suggested the income indigenous communities would receive under either system would likely be about the same, but the timing of the income flow would differ.

The Committee rejected a special revenue-based system for uranium saying it introduced an element of sovereign risk. Implementing a consistent royalty system would remove a barrier to further mine development, the Committee said.

“This is a sensible recommendation, based on sound logic,” Mr Angwin said.

The new profit-based royalty system will apply only to new mines, not to the one existing Northern Territory mine, ERA Ltd’s Ranger facility.