Mining Magazine Australia’s Post

SC judgement on #Royalty is not a #Tax on 25.07.2024. Hon'ble #SupremeCourt Judgement is attached. #Conclusions 342. In view of the above discussion, we answer the questions formulated in the reference in terms of the following conclusions: a. #Royalty is not a tax. Royalty is a contractual consideration paid by the #mining lessee to the lessor for enjoyment of mineral rights. The liability to pay royalty arises out of the contractual conditions of the mining lease. The #payments made to the Government cannot be deemed to be a tax merely because the statute provides for their recovery as arrears; e. The State legislatures have legislative competence under Article 246 read with Entry 49 of List Il to tax #lands which comprise of #mines and #quarries. Mineral-bearing land falls within the description of "lands" under Entry 49 of List I;

This morning, the U.S. Treasury announced that they've expanded the 45x tax credit under the Inflation Reduction Act to include mining operations, but with a major limitation—it only benefits companies that also refine the minerals they extract. While this may help operations like Sibanye-Stillwater's palladium and platinum mines in Montana, it leaves countless other vital projects out in the cold. In addition, allowing refiners to obtain a tax credit regardless of the origin of the ore being refined, could incentivize refiners to source ore that is less expensive because it has been produced in a country that is not bound by the strict environmental, labor and safety standards of the U.S. mining industry, putting domestic producers at a disadvantage. As it stands, operations like Michigan’s Eagle Mine, and proposed ventures such as Twin Metals Minnesota LLC's proposed Copper-Nickel-Cobalt mine, and NewRange Copper Nickel's NorthMet project would all be excluded from these crucial incentives if they were operating today. While it’s positive to see some acknowledgment of raw material production in the clean energy supply chain, we are deeply frustrated and confused by the Treasury’s choice to limit the 45X tax credit to companies that refine their minerals applicable to clean energy and national security applications. This decision is yet another reason why the U.S. continues to lag behind China in the critical minerals race. Including all extractive operations should be a no-brainer. By excluding miners focused solely on extraction, the Treasury is undermining national security and weakening efforts to establish a strong domestic supply chain. If the U.S. is serious about winning the clean energy race and reducing dependence on foreign sources, we must incentivize all mining operations, not just those with refining capabilities. To learn more, please visit the Reuters article via the link below: https://lnkd.in/gMkqXYZW

The Australian Federal Government is accelerating the introduction of #ProductionTaxCredits to support the struggling #NickelMining sector, with plans to extend this aid to #lithium miners if necessary. The Albanese Government initially pushed back against the introduction of #TaxCredits, however, warnings by BHP Group and other #miners that operations may cease and jobs lost, have forced the government’s hand. BHP has issued a warning that it may close its entire #nickel division in Western Australia, a move that could affect approximately 3,000 employees. The nickel and lithium industries are facing significant challenges. The current price of nickel is US$15,941.00. Nickel prices have fallen nearly 50% since the January 3, 2023 peak, putting severe pressure on companies involved in its exploration and production. More at #Proactive #ProactiveInvestors http://ow.ly/OOwK105ik9q

The ongoing challenges to mining revenue collection give us pause to consider whether the current system of mining taxation remains fit for the 21st century. Are there other ways that resource-rich developing countries might benefit financially from their mineral wealth? Download ATAF and IGFMining's 'The Future of Resource Taxation: 10 Policy Ideas To Mobilise Mining Revenues' here: https://bit.ly/3r9PVGQ #ATAF #ResourceTaxation

A new report has found that Australia’s mining companies paid $74 billion in taxes and royalties in the 2022-23 financial year. Should you have any questions, please feel free to reach us on 02 92213345 or info@pittmartingroup.com.au. #pittmartingroup #australiaeconomy #miningsector #tax #royalties #MCA #highestaveragewage #economicbackbone #draconian #environment #taxagent #enjoywhatwedo

The Judgement of the Hon’ble Supreme Court in Mineral Area Development Authority has very well attended the economic impact analysis of it’s judgement, where, the court has, while rejecting the contention of prospective overruling of its 9 Judge Bench Judgement has imposed certain conditions, to save many mining companies from getting bankrupt. The conditions are: 1. State may levy demand tax in terms of law laid down in it’s judgement and demand of tax shall not apply to transaction prior to 1 April 2005. 2. ⁠ Payment of demand will be made in staggered payment on 12 years which will commence from 1 April 2026. 3. ⁠ Interest or penalty levied on demands made before 25 July 2024, shall be waived. The judgement would certainly aid in sound decision making by balancing the demands of State Governments vis-a-vis the Mining companies. #SuprmeCoury #Judgement #MADA

💡 New technologies can help governments monitor production volumes to prevent underreporting and tax evasion in the mining sector. Watch author Ali Eliasu's overview of the idea— 1 of 10 in The Future of Resource Taxation, a handbook for policy-makers from IGF and the African Tax Administration Forum (ATAF). Read the more: https://lnkd.in/ePwb6ikW #mining #taxation #tax | Alexandra Readhead | Thomas Lassourd | Kudzai Mataba | Jaqueline Terrel Taquiri | Thelma Halim | Africa Centre for Energy Policy

Delighted to share the final record of proceeding pronounced by the Honourable Supreme Court of India, led by Chief Justice D. Y. Chandrachud, with a panel of Nine judges. Grateful to have had the opportunity to appear alongside my esteemed senior B S RAJESH AGRAJIT in the aforementioned case. Thankful for the enriching experience and learning under their mentorship. The nine-judge bench had on July 25 held that royalty paid by mining operators to the Central government is not a tax and that States have the power to levy cess on mining and mineral-use activities. The matter was then listed and heard again to decide whether the judgment would apply prospectively or retrospectively. The case involved the issue of whether State governments are denuded of powers to tax and regulate activities concerning mines and minerals in view of the enactment of the Mines and Minerals (Development & Regulation) Act (Mines Act). In a judgment rendered on July 25, the apex court through a 8:1 majority, held that States are not denuded of powers to levy cess on mining or related activities. Today, it decided on whether the judgment should be applied prospectively or retrospectively. Various States and the Centre had argued that judgment should be strictly prospective to avoid commercial losses for public sector companies. The nine-judge bench had on July 25 held that royalty paid by mining operators to the Central government is not a tax and that States have the power to levy cess on mining and mineral-use activities. The matter was then listed and heard again to decide whether the judgment would apply prospectively or retrospectively. The case involved the issue of whether State governments are denuded of powers to tax and regulate activities concerning mines and minerals in view of the enactment of the Mines and Minerals (Development & Regulation) Act (Mines Act). Today, it decided on whether the judgment should be applied prospectively or retrospectively.

Mineral Area Development Authority, a landmark Supreme Court ruling in India redefines mineral royalties as contractual considerations rather than taxes, with retrospective effect from 2005. This decision overturns decades of precedent, allowing states to recover past taxes on mining leases. While offering some concessions, the ruling poses significant financial challenges for the mining industry and related sectors, potentially impacting the entire supply chain and sparking legal disputes. The decision also has implications for ongoing tax litigation and may prompt industry appeals for government intervention to mitigate its effects. Against this backdrop, our Partner, Gopal Krishna Mundhra along with his team Rajath Bharadwaj, Senior Associate, Priyadarshini Shekhawat, Associate have co-authored an article, “𝙎𝙪𝙥𝙧𝙚𝙢𝙚 𝘾𝙤𝙪𝙧𝙩 𝙨𝙤𝙪𝙜𝙝𝙩 𝙗𝙖𝙡𝙖𝙣𝙘𝙚 𝙞𝙣 𝙢𝙞𝙣𝙚𝙧𝙖𝙡 𝙚𝙭𝙩𝙧𝙖𝙘𝙩𝙞𝙤𝙣 𝙟𝙪𝙙𝙜𝙚𝙢𝙚𝙣𝙩 𝙗𝙪𝙩 𝙢𝙤𝙧𝙚 𝙡𝙞𝙩𝙞𝙜𝙖𝙩𝙞𝙤𝙣 𝙖𝙥𝙥𝙚𝙖𝙧𝙨 𝙞𝙣𝙚𝙫𝙞𝙩𝙖𝙗𝙡𝙚” has been published in moneycontrol.com. Read the detailed article here - https://lnkd.in/d2qiWSkM #ELPinsights #mining #royalty #supremecourt #tax

Mineral Area Development Authority & Anr (The dispute relates to royalty payments on minerals under Mines & Minerals Development Right Act 'MMDR' and was pending since 1999 b/w Centre & State) Hon'ble Supreme Court in a majority (8:1) held that Royalty payments under MMDR is not tax but consideration for extraction of minerals under a contractual agreement. Further, it held that the right to tax such mineral rights vests with the State Legislature (power to tax mineral rights is enumerated in State List vide Entry 50 of List II). Entry 50 of List II reads as '50. Taxes on mineral rights subject to any limitations imposed by Parliament by law relating to mineral development.' Hon'ble Apex Court held the words 'any limitations' are wide enough and thus, the Parliament may impose limitations in relation to mineral development. The above decision will clear the pending litigations wherein GST on mining lease has been demanded. However, it would be interesting to see whether its application will be retrospective/ prospective and if the Parliament decides to impose any limitations under MMDR Act in terms of Entry 50 of List II.