House of Representatives
Minerals Resource Rent Tax Bill 2011
Minerals Resource Rent Tax (Consequential Amendments and Transitional Provisions) Bill 2011
Minerals Resource Rent Tax (Imposition - Customs) Bill 2011
Minerals Resource Rent Tax (Imposition - Excise) Bill 2011
Minerals Resource Rent Tax (Imposition - General) Bill 2011
Explanatory Memorandum
(Circulated by the authority of the Deputy Prime Minister and Treasurer, the Hon Wayne Swan MP)The Joint Petroleum Development Area is an area in the Timor Sea that is subject to an agreement between Australia and East Timor for the extraction of petroleum products.
Operations downstream of the valuation point may bear associated risks. For example, production volumes may be affected by movements in resource values.
In considering the non-diversifiable risks associated with the downstream operations, it should not be assumed that the notional downstream entity has entered into risk shifting agreements such as take or pay contracts if the miner has not itself entered into such arrangements.
The optimised value of an asset is a value that has regard to its capacity utilisation and any redundancy. The depreciated optimised replacement cost of an asset is the amount the owner would pay to retain an asset, having regard to its effective remaining life, and the costs involved in installing a new asset to achieve the equivalent service potential of the existing asset.
Similarly, where a farm-out arrangement involves a mining project interest and the farmee is granted an interest in that mining project interest, then the farmor will include an amount in its mining expenditure at that time to reflect the value of the interest they have given up in exchange for the exploration.
The 'time value of money' is the principle that a given amount of money has more value today than the same amount promised to be paid in the future (for example, you would rather have $100 now than a right to get $100 next year).
MEC groups are, in very broad terms, groups of Australian entities whose real head company would be a foreign resident. Instead of that company being the group's head company, the group chooses one of the first tier Australian entities to be its head company.
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