PERTH (miningweekly.com) – Base metals hopeful New Century Resources has struck a landmark royalty deferral agreement with the Queensland government, providing for the initial deferral of state government royalties for a period of three years.
Under the agreement, New Century could elect to defer royalty payments from its Century zinc mine for a period of three years, and repay those royalties over the following three-year period.
The agreement also provides an incentivisation pathway for continued exploration and future development of the already-identified in-situ resources at the Century mine.
Premier Annastacia Palaszczuk said the royalty agreement was an important step in her government’s commitment to open up the North West Minerals Province.
“We know the North West Minerals Province is rich in minerals like copper, cobalt, zinc and gold, as well as potential deposits of rare earth minerals that will play an increasing role in renewable electricity generation and battery technology,” the Premier said.
“We want to see new projects in the North West Minerals Province, but also new technologies that can extract more value from former projects like this.”
This is the first royalty deferral and repayment agreement to be negotiated under the Resources Regional Development Framework (RRDF) and will provide a precedent for similar arrangements in the future, the Premier said.
The A$150-million Century zinc mine will support more than 260 construction jobs and 240 operational jobs. The project is expected to reach full plant capacity of 12-million tonnes a year by the 2020 financial year.
Through a two-stage project, New Century is recommissioning the existing infrastructure and ramping up operations at the Century zinc mine to reprocess the vast zinc and silver tailings resource, and is seeking to restart conventional mining of known in-situ resources to produce zinc and lead concentrates, further increasing the economic life of the project.
Minister for Mines Dr Anthony Lynham said New Century’s investment in North West Queensland underlined the region’s potential for Queensland’s future.
“This year’s budget added an additional A$110-million on top of A$39-million already invested in supporting mining in the North West Minerals Province,” Lynham said.
“While New Century is using its own dedicated slurry pipeline to and port facility at Karumba, we’re reducing freight costs for users on the Mount Isa to Townsville rail line and contributing towards the construction and operation of containerised freight loading and unloading facilities at the Port of Townsville.”
The Queensland Resources Council has welcomed the agreement, with CEO Ian Macfarlane saying that the deferral and repayment agreement should be a model for other projects to attract more investment and create more jobs.
“The resources sector is projected to pay more than A$5.4-billion, or more than A$100-million every week, in royalty taxes to the Queensland government this financial year,” he said.
“Royalties paid to the Queensland government have more than doubled over the last five years, up from A$2-billion in 2014/15.
“The agreement means royalties will be paid in full and with interest, but it also recognises the role of flexibility in application of a stable royalty policy can support the development of new projects, generating new investment, new exports and new jobs for Queensland.”
Macfarlane said projects could also support the development of common-user infrastructure, such as with the New Century zinc project the continued dredging of the Port of Karumba, making the port available for other commercial users including the cattle industry.