Mine now, pay royalties later — Queensland wants to ‘super-charge’ project development
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A royalties deferment program set up by the Queensland government could be a sign of things to come — where start up operators are able to keep more cash early on in their operations.
The government announced today that such an arrangement had been struck between the government and the operator of the $150m Century zinc mine.
In return for not paying royalties early on in the project’s life, New Century will pay them back later with interest plus keeping enough in the bank to cover remediation work after the mine closes down.
It’s the first such arrangement struck in the state, and Deputy Premier Jackie Trad said the government struck the deal to super-charge development in the North West Minerals Province, and the Galilee and Surat Basins.
“The company has set a great benchmark for future proponents wishing to engage in a Royalty Deferral and Repayment Agreement,” she said.
“We said when royalties were deferred, they would have to be repaid in full, with interest and with security of payment in place.
“We said investors would have to meet a financial assurance model to ensure compliance with environmental conditions to cover rehabilitation costs.
“New Century has satisfied all these conditions through an exhaustive process and has also committed to employ a significant proportion of local indigenous workers through the additional jobs being created by the project.”
The deferment deal is part of a broader investment in the North West Minerals Province, with the government setting aside $500m to stimulate projects in the area.
This includes a $380m redevelopment of the Mount Isa line to take resources through to the Port of Townsville.
It’s also working to reduce access charges to the line, providing Queensland Rail $20m each year for four years to do just that.
On top of that, the government is tipping in $30m for the construction of a new terminal at the Port of Townsville, with the port contributing the remaining $18m.
“We know the North West Minerals Province is rich in minerals like copper, cobalt, zinc and gold, as well as potential deposits of rare earth minerals that will play an increasing role in renewable electricity generation and battery technology,” Premier Annastacia Palaszczuk said.
“We want to see new projects in the North West Minerals Province, but also new technologies that can extract more value from former projects like this.”