Mining transactions

Transactions involving mining tenements are liable for duty.

Transactions involving mining tenements are liable for transfer duty when transferred directly and may be liable for landholder duty when transferred indirectly (for example, shares are transferred in a company that owns mining tenements). See Commissioner's Practice DA 42 'Certain Transactions Involving Mining Tenements'.

Transactions involving specific mineral rights over a mining tenement are liable for transfer duty when they are created, transferred or surrendered (unless the surrender is for no consideration).  They may also be liable for landholder duty when transferred indirectly.  See the derivative mining rights fact sheet for more information.

Valuation

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Transactions involving mining tenements will require valuation in certain circumstances, for example where

  • the parties are not at arm’s length
  • the consideration includes a royalty or
  • there is an allocation to mining information or mining goodwill.

In some cases we will request that the Valuer General provide a valuation of mining tenements. For more complex transactions, we will usually require the taxpayer to provide a written valuation of the mining tenements.

See more information about valuing land for duties purposes.

If you are required to provide a written valuation, we may apply penalty tax if you fail to provide one and we may recover from you the costs of obtaining our own valuation.

In certain circumstances the Commissioner may consider making an interim assessment or a compromise assessment of the amount of duty to be paid. A complete assessment will be made following an interim assessment.

Farm-in agreements

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A duties concession applies to mining transactions that meet the definition of farm-in agreement. A farm-in agreement is a transaction under which

  • a person (the farminee) can acquire an interest in a mining tenement after spending an amount on exploration and development of the tenement and
  • the exploration amount is specified in the agreement and
  • the farminee’s interest will be held together with the owner of the mining tenement.

This means a person cannot earn a 100% interest under a farm-in agreement. If there is no consideration for the farm-in agreement, nominal duty will apply. If there is consideration for the farm-in agreement, for example, the farminee reimburses the owner for past exploration and development costs, duty will be assessed at the general rate on the amount of the consideration. Consideration does not include the exploration amount specified in the agreement. Once the farminee has spent the agreed exploration amount and earned the interest in the tenement, the transfer of the interest in the tenement will be assessed for no double duty.

Lodgment and payment

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Lodge transactions involving mining tenements, including specific mineral rights and farm-in agreements, within two months after the transaction occurs along with the information set out in the duties information requirements.

For landholder acquisitions, apply within two months after the acquisition occurs along with the information set out in the duties information requirements.

Payment of duty is required

  • within 12 months after the transaction for an agreement conditional on obtaining consent under the Mining Act 1978 or a mining tenement transaction requiring lodgment with the Department of Mines, Industry Regulation and Safety and
  • within one month after the assessment notice is issued for all other transactions.
Page reviewed 19 September 2019