MINERALS RESOURCE RENT TAX ACT 2012 (REPEALED)

CHAPTER 2 - GENERAL LIABILITY RULES  

PART 2-2 - MINING PROJECT INTERESTS  

Division 15 - Mining project interests  

Operative provisions  

SECTION 15-5   WHEN AN ENTITY HAS A MINING PROJECT INTEREST  
Mining project interest arising from a mining venture

15-5(1)    
An * entity has a mining project interest to the extent that the entity is entitled to share in the output of a * mining venture in which the entity participates (whether actively or otherwise, and whether alone or with one or more other entities).

Note 1:

There may be more than one mining venture to extract taxable resources from an area covered by a production right.

Note 2:

Changing or renewing a mining venture does not necessarily cause the termination day of a mining project interest: see section 135-15 .

15-5(2)    
If the * mining venture relates to one or more * production rights , the * entity has a separate mining project interest in relation to each production right.

Example:

Scouting Resources participates in a mining venture relating to the extraction of taxable resources from an area covered by 3 production rights. Scouting Resources has 3 mining project interests, one in relation to each production right.

Meaning of mining venture

15-5(3)    
An undertaking is a mining venture if the purpose, or a purpose, of the undertaking is:

(a) to extract some or all of the * taxable resources from the area covered by one or more * production rights ; and

(b) to produce an output that is a taxable resource extracted under the authority of the production right or rights, or something produced using such a taxable resource.

Example:

CheckCo and BelCo enter into a contractual arrangement under which they agree to jointly extract and process iron ore from the whole area covered by a mining lease, and each take an equal share of the ore once it has been pelletised.

Participation in this undertaking gives rise to a mining project interest for each of CheckCo and BelCo, comprising their respective entitlements to share in the pellets produced from the mining venture.

Residual mining project interest

15-5(4)    
An * entity has a mining project interest to the extent that:

(a) the entity is entitled to extract * taxable resources from the area covered by a * production right ; and

(b) there is no * mining venture , relating to the extraction of those taxable resources, that gives rise to a mining project interest for one or more entities under subsection (1) .

Note 1:

The start of a mining venture relating to the extraction of those taxable resources is treated as a mining project transfer (if the venture relates to all of the resources), or otherwise, a mining project split: see section 120-25 (for transfers) or 125-35 (for splits).

Note 2:

Changing or renewing a production right does not necessarily cause the termination day of a mining project interest: see section 135-10 .

Example:

LesseeCo holds a mining lease, with a term of 21 years, to extract coal from an area. LesseeCo enters into a sublease with DiggerCo, giving DiggerCo the exclusive right to extract coal from the whole area for a period of 3 years.

LesseeCo has a mining project interest under this subsection comprising its entitlement to extract coal from the area after the expiration of the 3 year sublease.

If there is no mining venture relating to the coal that may be extracted under the sublease, DiggerCo has a mining project interest under this subsection comprising its entitlement to extract the coal under the sublease.

Further entitlements constitute new mining project interest

15-5(5)    
If, after the * entity becomes entitled as mentioned in subsection (1) or (4) , the entity becomes so entitled to a further extent, the entity is taken to have a separate mining project interest corresponding to that further extent.

Note:

The separate mining project interests are combined into a single mining project interest under Division 115 if the requirements of that Division are met.

Example:

CheckCo and BelCo each have a mining project interest comprising an entitlement to share in the output of a mining venture in which they both participate.

CheckCo transfers its interest in the mining venture to BelCo (Division 120 , about transferring mining project interests, applies). BelCo then has a mining project interest comprising the entitlement it acquired from CheckCo to share in the output of the venture. That mining project interest is separate from CheckCo ' s original mining project interest.

Royalties not to give rise to mining project interest

15-5(6)    
To avoid doubt, a * mining royalty or a * private mining royalty is not an output mentioned in subsection (1) , unless it is a private mining royalty that is payable in kind.

Example:

CheckCo and BelCo each participate in a mining venture that produces pelletised iron ore from the area covered by a production right. Under the contractual arrangement between the parties, CheckCo is entitled to take all the pelletised iron ore, and is required to pay BelCo an amount of money calculated by reference to the quantity of iron ore extracted under the mining venture.

CheckCo has a mining project interest under subsection (1) , BelCo does not.

However, if CheckCo was required to pay BelCo in pelletised iron ore, BelCo would also have a mining project interest under subsection (1) .