1. Coal royalties guide - return lodgement

1.0 About royalties

In New South Wales, holders of mining leases or sub-leases are liable to pay royalty on the minerals extracted from their leases.

NSW Resources within the Department of Primary Industries and Regional Development grants mining leases, regulates mining, exploration and production and has responsibility for mining legislation and policy.

Royalty returns and payments are lodged with Revenue NSW. Revenue NSW is also responsible for assessments, compliance audits, and the recovery of unpaid royalty.

This guide has instructions for completing your monthly coal royalty return. It will also help you calculate the royalty you will need to pay.

You should read this guide with the:

• Mining Act 1992
• Mining Regulation 2016, and
• Value of Coal Recovered Ministerial Determination 2024.

This guide is effective from 1 July 2024.

1.1 Governing legislation

Mineral royalty in New South Wales is governed by Part 14 of the Mining Act 1992 and Part 7 of the Mining Regulation 2016. The Taxation Administration Act 1996 provides, under section 5B, that royalty is taken to be a tax which allows the Chief Commissioner of State Revenue to administer and enforce royalty legislation.

1.1.2 The Ministerial Determination

Section 283(5) of the Mining Act 1992 states that the value of minerals recovered is to be calculated (whether by volume or by weight) in the manner determined by the Minister. For this purpose, the Value of Coal Recovered Ministerial Determination 2024 (see Determination document under the heading 'Coal royalties') has been issued and is effective from 1 July 2024.

1.1.3 Authorised Officer

The Value of Coal Recovered Ministerial Determination 2024 provides that an Authorised Officer may grant approval and make decisions on certain matters including,

• The basis for calculation of the value of coal recovered
• The price charged on coal that has been disposed
• The approval and apportionment of allowable deduction amounts
• Any unclear or disputed matter in relation to assessable revenue and allowable deductions

The Determination defines Authorised Officer as,

1. the Minister
2. Chief Commissioner of State Revenue, Department of Customer Service
3. Commissioner of State Revenue, Department of Customer Service
4. Director, Policy & Legislation, Revenue NSW, Department of Customer Service
5. Director, Business Taxes, Revenue NSW, Department of Customer Service

1.2 The NSW Coal Royalties Guidelines and Instructions for Return Lodgement

These Guidelines and Instructions (Guidelines) have been developed by Revenue NSW, in collaboration with NSW Resources within the Department of Primary Industries and Regional Development, to assist leaseholders to fulfill their obligations under the Mining Act 1992 (the Act) the Mining Regulation 2016 (the Regulation) and the Value of Coal Recovered Ministerial Determination 2024 (the Determination).

You must refer to Part 14 of the Act, Part 7 of the Regulation and the Determination when reading these Guidelines. Additional information about royalties can be found at Coal royalties page on the Revenue NSW website and Royalties on the NSW Resources website.

The effective date of these Guidelines is 1 July 2024, and they replace all previously issued guidelines and instructions for lodging coal royalty returns.

1.3 Liability for coal royalties

The holders of mining leases and sub-leases (leaseholders) are liable to pay royalties to the state of New South Wales for coal recovered from the land under their mining lease. Liability remains with the leaseholder even if the leaseholder appoints an agent or other party to lodge their royalty returns and make their payments.

A leaseholder can only include coal that has been recovered from their own mining lease in their royalty return.

1.3.1 Liability for coal royalties - privately owned coal

Where coal is privately-owned, leaseholders are still required to lodge royalty returns and pay royalty. An amount equalling seven-eighths of the royalty that is paid by the leaseholder to the state, will be paid to the owner of the coal by the Minister.

1.4 How royalty is calculated on coal

Coal royalty is calculated on the value of the coal recovered from a mining lease within a royalty period. The amount and value of the coal recovered in a period is taken to be the amount and value of the coal disposed of in that period.

The value of coal recovered must be determined in accordance with the Determination and the royalty rate is applied to that value.

The extraction method determines the royalty rate to be applied. Royalty rates are shown at part 1.5 of these Guidelines.

1.5 Rates of royalty for coal

Coal royalty rates have increased by 2.6%, effective from 1 July 2024.

The rate of royalty depends on the mining method used to extract the coal.

• open cut mining - means mining carried out at a mine in which coal is extracted by open cut methods.
• underground mining - means mining (other than deep underground mining) carried out at a mine in which coal is extracted other than by open cut methods.
• deep underground mining - means mining carried out at a mine in which coal situated at a depth of 400 metres or more is extracted by means other than open cut methods.

1.6 Lodging your royalty returns and payment

Coal royalty returns are required to be lodged monthly with Revenue NSW through Royalty Online Services (ROS). If you are a leaseholder or a person authorised to lodge returns on behalf of the leaseholder, you must complete a User Access Form available on our Lodge your return page to register for ROS.

1.6.1 Okta authentication and accessing Royalty Online Services (ROS)

Revenue NSW uses Okta authentication to manage access to ROS through a single, secure home page. Once you are registered for ROS, you will receive instructions on how to activate your Okta account.

When you activate your Okta account, you will be required to provide a second factor of authentication prior to being permitted access to ROS.

If ROS detects no activity for 30 minutes, you will be automatically logged out. You will need to log in to ROS again if this occurs.

Password and Okta related enquiries should be directed to the Service Desk on 1300 697 679.

Royalty return enquiries should be directed to us at [email protected] or on 1300 139 817.

1.6.2 Due dates

Coal royalty returns and payments are due on or before the 21st day of the month which follows the return period, for example: your February monthly return and royalty payment is due by the 21st of March.

Leaseholders are responsible for ensuring returns are lodged on time and accurately.