Mining (Ellendale Diamond Royalties) Regulations 2002 (WA)
Western Australia
Mining Act 1978
These regulations were repealed by the
Western Australia
Mining Act 1978
These regulations may be cited as the
These regulations come into operation on the sale date.
(1) In these regulations, unless the contrary intention appears —
(a) expenditure on plant and equipment owned by the tenement holder and used by the tenement holder for diamond mining and recovery within the Ellendale mining lease;
(b) expenditure on buildings, plant and equipment owned by the tenement holder and used by the tenement holder for sorting rough diamonds in the State;
(c) expenditure on site preparation, mine development and buildings and other improvements within the Ellendale mining lease; and
(d) such other expenditure as the Minister may determine to be reasonable and necessary for the diamond mining, recovery and sorting operations of the tenement holder within the Ellendale mining lease,
and, in the case of any year beginning after 30 June 2005, also means the purchase price paid under the sale agreement for the Ellendale mining area and Ellendale Information, as defined in the sale agreement, being the purchase price set out in item 2 of Schedule 1 in the sale agreement;
(a) operating costs properly incurred by the tenement holder (excluding those cost provisions not allowed under the
Income Tax Assessment Act 1997 of the Commonwealth) and directly attributable to the mining, recovery and sorting of rough diamonds from the Ellendale mining lease and such other costs as the tenement holder demonstrates, to the reasonable satisfaction of the Minister, are reasonably and necessarily incurred by the tenement holder in connection with that mining, recovery and sorting;(b) such apportionment as the Minister may approve of costs reasonably attributable to, or reasonably and necessarily incurred by, the tenement holder but not wholly incurred in connection with or applicable to the mining, recovery, sorting and marketing of rough diamonds from the Ellendale mining lease;
(c) direct marketing and selling expenses properly incurred by the tenement holder in connection with and prior to the sale of sorted rough diamonds from the Ellendale mining lease and such other expenses which the tenement holder demonstrates to the reasonable satisfaction of the Minister are reasonable and necessary in connection with that sale;
(d) transport and insurance costs relating to rough diamonds from the Ellendale mining lease properly incurred by the tenement holder prior to the sale, transfer, disposal or processing of those diamonds;
(e) expenditure on exploration for diamonds within the Ellendale mining lease —
(i) reasonably incurred by the tenement holder before the sale date and approved by the Minister for the purposes of this definition; or
(ii) reasonably incurred by the tenement holder after the sale date;
(f) the value of unsold sorted rough diamonds from the Ellendale mining lease which the tenement holder had on hand at the beginning of a year less the value of unsold sorted rough diamonds from that tenement which the tenement holder has on hand at the end of that year;
(g) depreciation of allowable capital expenditure; and
(h) actual interest costs and borrowing expenses incurred by the tenement holder on such borrowings as the Minister approves for the purposes of this definition on the basis of information provided by the tenement holder with respect to the financing of its operations and the repayment of loans,
but does not include —
(i) royalties, except where payable under a written law other than the Act or the
Mining Regulations 1981 ;(j) taxes on or affecting income or profits; or
(k) any development allowance under the
Income Tax Assessment Act 1936 of the Commonwealth;
(a) insurance and freight ex Perth;
(b) selling and marketing expenses;
(c) such other costs and charges as the Minister considers reasonable in respect of any shipment or sale;
(a) the physical and chemical treatment of diamonds;
(b) the cutting and polishing of diamonds;
(c) all other processes relating to, and treatment of, diamonds which increase their market value,
but does not include the sorting of rough diamonds;
(a) the greater of —
(i) the gross sales revenue from the sale, transfer or disposal by the tenement holder on an arms‑length basis of sorted rough diamonds from the Ellendale mining lease; and
(ii) the fair and reasonable market value on an arms‑length basis of sorted rough diamonds from the Ellendale mining lease sold, transferred or disposed of by the tenement holder as determined by the Minister after consultation with the tenement holder;
and
(b) in respect of sorted rough diamonds processed by the tenement holder, the fair and reasonable market value prior to processing as determined by the Minister after consultation with the tenement holder, having regard to any current sales on an arms‑length basis by the tenement holder of comparable categories of sorted rough diamonds and, where sorted rough diamonds are processed in the State by the tenement holder, having regard to the allowable f.o.b. revenue costs;
(2) For the purposes of paragraph (f) of the definition of “allowable deductions” in subregulation (1) —
As soon as practicable after the sale date the Minister is to cause notice of that date to be published in the
(1) In this regulation,
decreasing adjustment ,GST ,increasing adjustment ,input tax credit andsupply have the respective meanings given by section 195‑1 of theA New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth.(2) For the purposes of these regulations, a reference to the value of diamonds at a particular point in their production (other than their supply), or in a particular form, is to be treated as a reference to that value, reduced by an amount equal to the amount of GST that would be payable if the diamonds were supplied at that point, or in that form.
(3) If, when determining a value of diamonds for the purposes of these regulations, an amount (an
expense ) that relates to obtaining those diamonds may be deducted from another amount, the amount that may be deducted is reduced by an amount equal to the net input tax credit (if any) that arises in relation to that expense.(4) The
net input tax credit that arises in relation to an expense is —(a) the input tax credit that arises in relation to that expense; plus
(b) the sum of any decreasing adjustments in relation to that expense; minus
(c) the sum of any increasing adjustments in relation to that expense.
6. Rates of royalty (1) Where diamond is obtained from the Ellendale mining lease, royalties are to be paid by the tenement holder.
(2) The rate of royalty payable each year for diamond obtained from the Ellendale mining lease is 5% of the f.o.b. revenue for that year.
(3) Subregulation (2) applies to diamond obtained from the Ellendale mining lease on or after 1 January 2009.
(1) Depreciation of allowable capital expenditure is to be calculated as follows —
(a) where at the end of a year the estimated remaining life of the mine at which the tenement holder is carrying on diamond mining operations within the Ellendale mining lease (or, where there is more than one such mine the estimated remaining life of the mine with the largest production) exceeds 5 years, by applying a rate of 20% to the depreciated value of allowable capital expenditure; and
(b) where at the end of a year the mine with the largest production has an estimated life of 5 years or less, by dividing, each year thereafter, the depreciated value of allowable capital expenditure by the remaining estimated life of that mine.
(2) For the purposes of subregulation (1) —
(a) the total amount of depreciation claimed in respect of any asset shall not exceed the cost of that asset; and
(b) the depreciated value of allowable capital expenditure shall be reduced in respect of any asset sold or otherwise disposed of by the proceeds of sale or disposal (if any).
9. Losses (1) Where, in relation to a year, the allowable deductions exceed the sales value a loss is deemed to have been incurred by the tenement holder in respect of that year and the amount of the loss is deemed to be the amount by which the allowable deductions for that year exceed the sales value for that year.
[(2) deleted]
(1) In this regulation —
(2) The tenement holder must, within 14 days after the end of each quarter, forward to the Department at Perth a royalty return, in a form approved by the Minister, showing in respect of that quarter —
(a) the quantity of, value of, and allowable f.o.b. revenue costs in respect of, diamonds on which royalty is payable;
(b) such other details (including estimated costs of production and itemised deductions) as the Minister may require;
(c) the opening and closing balance of stocks on hand; and
(d) an estimate of the amount of royalty payable at the rate specified in regulation 6(2).
Penalty: $5 000.
(3) The Minister may, after consultation with the tenement holder, require the tenement holder to revise the royalty estimate on the basis of actual sales during the quarter concerned, and the tenement holder must revise the estimate accordingly.
(4) The tenement holder must pay a royalty in the amount of the royalty estimate to the Department at Perth within 45 days after the end of the quarter to which the royalty estimate relates.
(1) The tenement holder must, within 4 months after the end of each year, forward to the Department at Perth a royalty return, in a form approved by the Minister —
(a) showing in full the details required to calculate the royalty payable for that year, including —
(i) income during that year;
(ii) expenditure during that year; and
(iii) the quantity and value of all diamonds sold, transferred or otherwise disposed of during that year;
and
(b) itemising the basis of apportionment of any indirect costs that may be approved by the Minister as allowable deductions.
Penalty: $5 000.
(2) Where a return under subregulation (1) shows that the total amount paid under regulation 10(4) for the year to which the return relates is —
(a) less than the royalty payable for that year, the difference is to be paid when the return is forwarded under subregulation (1); or
(b) greater than the royalty payable for that year, the amount overpaid may be deducted by the tenement holder from the next payment under regulation 10(4).
12. Minister to consult tenement holder on certain matters
Where the Minister is required to be satisfied as to, or to approve, any costs or expenses, or the calculation or apportionment of any costs or expenses, in connection with allowable deductions or sales value, the Minister is to consult with the tenement holder and have regard to any relevant provisions of the
This is a compilation of the
8 Feb 2002 p. 581‑95 | 23 Apr 2002 (see r. 2 and | |
11 Feb 2005 p. 695‑6 | 11 Feb 2005 | |
31 May 2005 p. 2421-2 | 31 May 2005 | |
31 Dec 2008 p. 5683-4 | r. 1 and 2: 31 Dec 2008 (see r. 2(a)); Regulations other than r. 1 and 2: 1 Jan 2009 (see r. 2(b)) | |
(1) In this regulation —
(2) The first return is to be forwarded within 4 months after 30 June 2005.
(3) Regulation 11 of the
Mining (Ellendale Diamond Royalties) Regulations 2002 applies in relation to the first return as if references in that regulation to “that year” and “the year to which the return relates” were references to “the period from 1 January 2004 to 30 June 2005”.
”.
allowable capital expenditure................................................................................... 3(1)
allowable deductions.................................................................................................. 3(1)
allowable f.o.b. revenue costs................................................................................... 3(1)
decreasing adjustment................................................................................................ 5(1)
depreciated value........................................................................................................ 3(1)
Ellendale mining lease............................................................................................... 3(1)
expense......................................................................................................................... 5(3)
f.o.b. revenue............................................................................................................... 3(1)
GST............................................................................................................................... 5(1)
increasing adjustment................................................................................................. 5(1)
input tax credit............................................................................................................. 5(1)
net input tax credit...................................................................................................... 5(4)
processing..................................................................................................................... 3(1)
quarter......................................................................................................................... 10(1)
royalty estimate......................................................................................................... 10(1)
sale agreement............................................................................................................. 3(1)
sale date........................................................................................................................ 3(1)
sales value.................................................................................................................... 3(1)
supply............................................................................................................................ 5(1)
tenement holder........................................................................................................... 3(1)
value.............................................................................................................................. 3(2)
year................................................................................................................................ 3(1)
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