Latest / 360 with Katie Woolf / Minerals Council of Australia Executive Director Cathryn Tilmouth explains changes to the royalties framework by the Mineral Development Taskforce

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Minerals Council of Australia Executive Director Cathryn Tilmouth explains changes to the royalties framework by the Mineral Development Taskforce · 360 with Katie Woolf

• 0:00
  Speaker 1: Now, as I mentioned on Friday, a pretty big well.
• 0:04
  Speaker 1: It seems like it's quite the backflip from the Northern
• 0:07
  Speaker 1: Territory government in the mining sector. So you might recall
• 0:10
  Speaker 1: a couple of years ago changes were made to the
• 0:12
  Speaker 1: royalties regime which many believed made investment in the Northern
• 0:16
  Speaker 1: Territory less competitive. So it was an issue which we'd
• 0:19
  Speaker 1: spoken about many times on the show. And the change
• 0:22
  Speaker 1: is now there is going to be a change. It's
• 0:24
  Speaker 1: one of a number of changes actually announced following the
• 0:27
  Speaker 1: establishment of the Mineral Development Task Force, established in November
• 0:31
  Speaker 1: twenty twenty one to investigate and identify strategies to activate
• 0:36
  Speaker 1: and secure ongoing private investment. So the task Force, which
• 0:41
  Speaker 1: comprises of government to industry and private sector experts, was
• 0:45
  Speaker 1: tasked with reporting findings back to the Northern Territory government.
• 0:48
  Speaker 1: That is what they have done.
• 0:49
  Speaker 2: Now.
• 0:49
  Speaker 1: Joining me on the line to tell us a bit
• 0:52
  Speaker 1: more is Cat Tillmouth, who's the executive director of the
• 0:56
  Speaker 1: Minerals Council of Australia here in the Northern Territory. Good
• 0:59
  Speaker 1: wanting to your cat.
• 1:02
  Speaker 2: Hello, Katie, how are you here?
• 1:03
  Speaker 1: You're really good, Thank you so much for your time
• 1:06
  Speaker 1: this morning. Now tell me what did the task force find.
• 1:12
  Speaker 2: So the taskforce put forward a couple of recommend a
• 1:16
  Speaker 2: handful of recommendations to government.
• 1:19
  Speaker 3: A lot of them.
• 1:20
  Speaker 2: Focused on helping the government put in place some changes
• 1:26
  Speaker 2: that will attract investment in mining into the territory. So
• 1:32
  Speaker 2: what they were looking at is in the Northern Territory
• 1:35
  Speaker 2: there is only a handful of operating minds, whereas when
• 1:38
  Speaker 2: you look across the border to Western Australia and other jurisdictions,
• 1:42
  Speaker 2: there are exponentially a lot more mind in operation. And
• 1:46
  Speaker 2: it has got nothing to do with the quality of
• 1:49
  Speaker 2: the resources underground. It was about figuring out, why is
• 1:54
  Speaker 2: it when you're an investor do you look at the
• 1:56
  Speaker 2: Northern Territory and.
• 1:57
  Speaker 3: Go, Nah, it's too hard.
• 2:00
  Speaker 2: What is it with our regulations, with some of the
• 2:03
  Speaker 2: frameworks that we have in place? As an avest, did
• 2:06
  Speaker 2: you go I would rather go somewhere else than not
• 2:09
  Speaker 2: go to the Northern Territory to spend my money.
• 2:11
  Speaker 3: So the recommendation that they put forward.
• 2:14
  Speaker 2: Had to do with the royalties, with the regulatory framework,
• 2:19
  Speaker 2: some to do weird land access, social license and other
• 2:22
  Speaker 2: things like that. But the big standout one that everyone
• 2:25
  Speaker 2: was really excited to see the government take seriously was
• 2:29
  Speaker 2: changing the royalty framework.
• 2:31
  Speaker 1: Now, talk us through this, because it's something that we've
• 2:34
  Speaker 1: spoken to your predecessor, Drew Wagner about on numerous occasions.
• 2:38
  Speaker 1: I remember even m seeing an event for the Minerals
• 2:41
  Speaker 1: Counsel and it was something that was really high on
• 2:44
  Speaker 1: the agenda at the time. So talk us through this
• 2:47
  Speaker 1: change and what it's going to mean.
• 2:51
  Speaker 2: So back in twenty eighteen, prior to that, the Northern
• 2:56
  Speaker 2: Territory had a profit based royalty regime. It was pretty
• 3:00
  Speaker 2: much when you reached a certain amount of profits, the
• 3:04
  Speaker 2: government took a percentage of that profit, and then after
• 3:08
  Speaker 2: that point the government changed it to a hybrid system
• 3:11
  Speaker 2: where it went profits based and ad belorum after that,
• 3:15
  Speaker 2: and that you were have talked to Drew about it
• 3:17
  Speaker 2: at length. All of the industry went, that is so confusing,
• 3:21
  Speaker 2: that is too complicated. All the industry went, this is
• 3:27
  Speaker 2: the only place where this system if just happened. You
• 3:32
  Speaker 2: had to run almost a dual accounting system to figure
• 3:35
  Speaker 2: out what that would look like. If you were a
• 3:37
  Speaker 2: company that was looking at financial investment decision and you
• 3:40
  Speaker 2: had to figure out what your books were going to
• 3:43
  Speaker 2: look like you.
• 3:44
  Speaker 3: Had to figure out both of those systems.
• 3:46
  Speaker 2: So what they're looking at doing now in the government
• 3:49
  Speaker 2: is having an ad blareum system. So that means that
• 3:54
  Speaker 2: they will calculate the value of the resource. For the gold, nickel,
• 3:59
  Speaker 2: zek whatever it is, that you're going to mind the
• 4:02
  Speaker 2: value of that as it is being mined, So work
• 4:06
  Speaker 2: out the details of bat through the consultation process, but
• 4:09
  Speaker 2: work out the value of that resource as it's being
• 4:12
  Speaker 2: mined and then pay a royalty of that. And that's
• 4:17
  Speaker 2: consistent with what it is like around other jurisdiction. So
• 4:21
  Speaker 2: it's making it competitive with other places. So we're the
• 4:25
  Speaker 2: same of everyone else now because we're not different.
• 4:28
  Speaker 1: The thing is we're resource rich, aren't we. Like there
• 4:31
  Speaker 1: is no doubt that the Northern Territory has got several
• 4:34
  Speaker 1: different minerals which are there which could be mined, whether
• 4:39
  Speaker 1: you know, whatever it is. But we were making things.
• 4:42
  Speaker 1: It seems like we're making things a bit too difficult.
• 4:45
  Speaker 2: Oh, so we have so many we are actually under
• 4:48
  Speaker 2: explored and underdeveloped. It was just that when you were
• 4:53
  Speaker 2: a mining company and coming to look at the Northern Territory.
• 4:57
  Speaker 3: It was as though it was too hard do business.
• 5:01
  Speaker 2: In the Northern Territory, you would look at another jurisdiction
• 5:04
  Speaker 2: and go it was actually easier to get your business
• 5:07
  Speaker 2: off the ground in another jurisdiction than to do it
• 5:11
  Speaker 2: in the Northern Territory. So that's what this task force
• 5:13
  Speaker 2: was looking at, was to attract.
• 5:16
  Speaker 3: The investment, and to attract that.
• 5:18
  Speaker 2: Investment meant that you were going to help businesses get
• 5:21
  Speaker 2: off the ground, which would then lead to more money
• 5:24
  Speaker 2: going into the empty government drew these royalties, and those
• 5:28
  Speaker 2: royalties going into the anti government go into the economy,
• 5:32
  Speaker 2: and then that money goes to.
• 5:34
  Speaker 3: Helping hospitals, public schools.
• 5:37
  Speaker 2: Roads, infrastructure and everything that territory and benefits from.
• 5:41
  Speaker 1: So Catherine, how soon are we expecting these changes now
• 5:45
  Speaker 1: to come into place in the territory.
• 5:48
  Speaker 2: So for the majority of the recommendations, the government's going
• 5:53
  Speaker 2: to go out and do a three month consultation process
• 5:57
  Speaker 2: before they give their formal spons but for the royalties recommendation,
• 6:05
  Speaker 2: they're going to take a twelve month consultation process. Because
• 6:10
  Speaker 2: the way the system works for royalties is that for
• 6:14
  Speaker 2: every dollar that a mining company pays to the NT
• 6:18
  Speaker 2: government in royalties, the Commonwealth actually matches that it gives
• 6:23
  Speaker 2: that to the Aboriginal Benefit to count. So the government
• 6:28
  Speaker 2: needs to make sure that the land councils and those
• 6:32
  Speaker 2: that are impacted by that are okay with the changes. Yeah, yeah,
• 6:38
  Speaker 2: So there's got to be sensitivities there. But in the
• 6:41
  Speaker 2: long run, what we're very very make it very very
• 6:45
  Speaker 2: clear is that as there are a couple of minds,
• 6:49
  Speaker 2: like the bigger minds that are coming to the end
• 6:50
  Speaker 2: of life like the twenty thirty. You know, you've got
• 6:53
  Speaker 2: the big minds like Macartha, river Mine and even Rio
• 6:57
  Speaker 2: as it goes, they're going to become to the end
• 7:00
  Speaker 2: of their life then and they're not going to be
• 7:02
  Speaker 2: paying royalties anymore. So they're not going to be paying
• 7:06
  Speaker 2: royalty for the Anti government or the Commonwealth is not
• 7:08
  Speaker 2: going to be paying that money into the Aboriginal Benefits account.
• 7:12
  Speaker 2: So if we're not making the anty attractive for new
• 7:16
  Speaker 2: minds to open, then that's going to be no more
• 7:19
  Speaker 2: money coming into royalties for the Anti government, and that
• 7:23
  Speaker 2: means there's going to be no more royalties going from
• 7:25
  Speaker 2: the Commonwealth Government into the Aboriginal Benefits account. So if
• 7:29
  Speaker 2: we don't increase the pie for everyone, then everyone misses out.
• 7:34
  Speaker 1: Well, So it sounds like we are actually by twenty thirty,
• 7:37
  Speaker 1: we're coming to a bit of a cliff where we
• 7:39
  Speaker 1: need to make sure that we're sort of expanding investment.
• 7:43
  Speaker 2: Yeah, we need to bring and make us attractive so
• 7:47
  Speaker 2: that we bring in opportunities so that everyone benefits and
• 7:51
  Speaker 2: its jobs. It's training, it's opportunities for small businesses to
• 7:56
  Speaker 2: go out and sell their wares, and you know, it's
• 8:00
  Speaker 2: that flow on business effect.
• 8:01
  Speaker 3: It's not just people.
• 8:02
  Speaker 2: Wearing high bigs. It's the people that are selling food.
• 8:07
  Speaker 2: It's the people that are the supermarket. It's the people
• 8:10
  Speaker 2: that are doing all of the cleaning, it's the people
• 8:12
  Speaker 2: that are washing the sheets in all the camps. They
• 8:18
  Speaker 2: bring huge investment into local communities.
• 8:21
  Speaker 3: These thoughts of projects, and.
• 8:22
  Speaker 1: Catherine, based on the announcement that the government had made
• 8:26
  Speaker 1: on Friday and these recommendations that have been made, do
• 8:29
  Speaker 1: you think that it's going to make the difference that
• 8:31
  Speaker 1: we need.
• 8:34
  Speaker 2: The government said that they accept all of the recommendations
• 8:37
  Speaker 2: in principle and they actively went out and thought the council.
• 8:42
  Speaker 2: They sought the feedback from industry. So if they're serious
• 8:47
  Speaker 2: about it and they take the advice from industry and
• 8:50
  Speaker 2: they put this in place, then I think this is
• 8:54
  Speaker 2: what needs to happen. They needed that, they need this change.
• 8:58
  Speaker 2: If they're serious about adding to that goal of forty
• 9:01
  Speaker 2: billion dollars by twenty thirty, you can't get there without
• 9:04
  Speaker 2: the resources industry. The resources industry already makes up so
• 9:08
  Speaker 2: much of the territory economy. Without growing the resources the
• 9:12
  Speaker 2: industry when never going to reach that target.
• 9:14
  Speaker 1: Well, Catherine Tillmouth, the EXECUTI Chief Executive of the Minerals
• 9:19
  Speaker 1: Council of Australia here in the Northern Territory, I really
• 9:22
  Speaker 1: appreciate your time this morning. Thank you very much for
• 9:25
  Speaker 1: having a chat with us today.
• 9:27
  Speaker 2: Thank you, Katie, and thank you for accommodating the times.
• 9:30
  Speaker 1: No worries, that's all good, no problem at all. Good
• 9:33
  Speaker 1: on you, Cat, Thank
• 9:34
  Speaker 2: You, thank you.