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It makes a lot of sense, we have discussed it before, where the royalties system could be used to charge a tax commensurate with the market price of each material.

We discussed it way back, when the stupid super profits tax was floated, a volumetric system as used with royalties makes a lot more sense and is much easier to operate.

Now all of a sudden, the Governments are talking about it, just dumb that it has never been done before IMO.

Benchmark our production cost and raise/lower the royalties as profits rise and fall, it just becomes a progressive tax the same as income tax scales.

When iron ore is selling at $30/ton the royalty drops to minimum, when it sell at $150/ton the royalty raises to an agreed maximum a sliding scale/ton makes much more sense than a super profits tax that could be offshored.

But it didn't have the punch line and optics of a "super profits tax", now as China start screwing us, common sense is starting to prevail, otherwise we are toast IMO.

[URL unfurl="true"]https://www.abc.net.au/news/2024-01-25/nickel-miners-pay-less-to-mine-in-western-australia-amid-crisis/103390830[/URL]

From the article

Changes to the amount of money miners pay to dig up precious metals in Western Australia have been floated at government crisis talks as the nickel industry bears the brunt of a global price decline.

Federal resources minister Madeline King and WA mines minister David Michael met with nickel and lithium industry heavyweights today, pledging state and federal level support.

Mr Michael said reforms to WA's royalty scheme based on price, on a sliding scale, were put forward and he would take them to government.

It means nickel miners could pay less to operate in WA.

"It's something that I've committed at least to investigating with the sector," he said.

"Royalty reform which will go on for a very long time is something that would affect the government and the mining sector for many years."

Currently WA levies 2.5 per cent on nickel sales, generating $128 million in 2022.

In WA, one of three royalty rates (2.5 per cent, 5 per cent and 7 per cent) are applied depending on the form of the mineral when it is sold and how much it is processed.

Attempts to change the system in 2017 sparked a war with gold miners after the government sought to raise their payments.

A Nationals WA policy to increase fees iron ore miners pay to the government also saw the political demise of their leader Brendon Grylls in 2016.

That plan would have taken a 25 cent per tonne production rental fee set for BHP Billiton and Rio Tinto in the 1960s, and increase it to $5 a tonne, raising billions of dollars of extra revenue for the state.

When asked whether he thought iron ore or gold producers would be open to longer-term reform, the mines minister conceded he wasn't sure.

"It depends what the reform looks like," Mr Michael said.

Mr Michael also flagged short-term relief could be on the cards in the form of royalty payment deferrals but could not provide details on what would trigger repayments.

Ms King said she would also take a proposed production tax credit – designed to encourage processing of minerals onshore — to treasury to be costed.

Global mining players including BHP were present at the meeting.

BHP's Nickel West asset president Jessica Farrell said it was critical Australia remained globally competitive in strategic minerals.

"I think we have a real crisis, and in terms of working on that in Australia we need speed," she said

The lithium industry, also due to meet with government today, has plunged 80 per cent in the past year.

Western Australia has a five per cent royalty rate on the value of lithium concentrate and it accounted for four per cent of WA's total royalty revenue.

Lithium royalties in Western Australia rose from $60 million in 2021 to $457 million in 2022.