25/04/2026
Interesting
+8
In Australia, state and territory governments own most natural resources underground and levy royalties on mining companies for the right to extract them. These royalties are paid on a wide range of minerals and energy resources, usually calculated based on the value of the production or a set rate per tonne.
The Centre for Independent Studies
The Centre for Independent Studies
+2
Key natural resources that attract royalties include:
1. Energy Resources
Coal: Both metallurgical (metallurgical/coking) and thermal coal are major sources of royalties, particularly in New South Wales and Queensland.
Oil and Gas: Royalties apply to petroleum extraction, including crude oil, condensate, natural gas, liquefied natural gas (LNG), and liquefied petroleum gas (LPG). Note: While onshore and some specific projects (like the North West Shelf) pay royalties, many other offshore gas projects are subject to the federal profits-based Petroleum Resource Rent Tax (PRRT) instead of production-based royalties.
Uranium: Subject to royalties, especially in jurisdictions where it is mined.
ANAO
ANAO
+4
2. Mineral Resources
Iron Ore: As one of Australia's largest commodities, iron ore generates significant royalty revenue, particularly in Western Australia.
Gold: Gold production is subject to royalties, usually at a lower ad valorem rate (e.g., 2.5% in WA).
Base Metals: Copper, nickel, lead, and zinc.
Critical Minerals: Lithium, cobalt, rare earth elements, and other materials required for high-tech industries.
Mineral Sands: Rutile, zircon, and ilmenite.
The Centre for Independent Studies
The Centre for Independent Studies
+4
3. Other Resources
Industrial and Construction Materials: Bauxite, gypsum, limestone, clay, shale, and chert often attract a specific rate or "quantum" royalty (flat fee per tonne) rather than a percentage of value.
Geothermal Energy: Specifically mentioned as subject to royalties in South Australia.
Energy & Mining
Energy & Mining
+3
Key Differences in Royalties
Ad Valorem Royalty: Calculated as a percentage of the value of the mineral (e.g., typically 7.5% for crushed iron ore in WA).
Specific Rate Royalty: A fixed amount per tonne (e.g., 35 cents per tonne for bauxite in NSW).
Private vs. Public: In most cases, minerals are publicly owned, but where they are privately owned, the state still collects the royalty, though often returns a portion to the landowner.
Western Australian Government
Western Australian Government
+2
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