PERTH (miningweekly.com) – The Association of Mining and Exploration Companies (Amec) on Friday expressed its concerns over the Northern Territory government’s decision to enact a 1% environmental tax.

The state’s Mines and Energy Minister Willem Westra Van Holthe reported that the Mining Management Amendment (MMA) Bill was passed through Parliament on Thursday night.

Under the amendments to the MMA, the state government introduced a 1% levy, to be applied on environmental securities lodged with the Department of Mines and Energy.

“Revenue from the levy will be available to begin tackling the significant legacy issues we face. The levy is expected to generate A$6.45-million in its first year, with a third of the revenue going directly to a specific mining remediation fund,” Westra Van Holthe said.

He noted that the government recognised the level of environmental performance expected from the mining sector in 2013 was vastly higher than that in previous decades.

“Regrettably, the Territory has a significant number of legacy mining sites with ongoing negative impacts on the environment. Such sites need to be appropriately assessed to gauge the level and nature of these impacts, and then appropriately remediated over time," he said.

Amec CEO Simon Bennison reiterated that only a third of more than A$6-million dollars raised by the tax would be directed to legacy sites, adding that it brought into question the remaining two-thirds that will go directly to administration fees.

“To give some certainty to the industry, Amec seeks a commitment from the Minister to consult with industry on the removal of the tax. It is time for proper consultation to look at all alternatives in addressing legacy sites,” Bennison said.

“In the current economic climate, it is inconceivable that a government would seek to add costs to production to fund activities that are provided as business-as-usual in other states.”

He added that legacy sites resulting from previous government policies had to be addressed by the government revenue derived from these activities and their royalties. “It is hard to see the logic of punishing the current operators.”

Amec said on Friday that it was seeking more detail on the progress the tax would make on improving the environmental outcomes across the Territory.

“It is essential that we remove barriers to doing business in the Northern Territory to encourage investment; not add additional taxes to an increasingly costly industry,” said Bennsion.

The new amendments to the MMA, including the levy on mining securities, will come into effect on October 1, 2013.