Review Finds NZ Mining Royalty System Comparable with Overseas Models

Resources Minister Shane Jones said the findings offer valuable insight into the strengths of the current framework and the trade-offs involved in making any future changes.

New Zealand's mineral royalty system is broadly in line with those used in comparable overseas jurisdictions, according to an independent review that examined how much revenue the Government receives from mining activities.

The report, prepared by Deloitte New Zealand for the Ministry of Business, Innovation and Employment (MBIE), found the overall return to the Crown through mineral royalties and company tax is generally comparable with similar mining countries. The review also provides the Government with independent analysis to help guide future decisions on how the royalty system could evolve.

Resources Minister Shane Jones said the findings offer valuable insight into the strengths of the current framework and the trade-offs involved in making any future changes.

Most Royalty Revenue Comes From Older Permits

The report's key finding is that around 97 per cent of mineral royalty revenue in 2025 comes from mining permits operating under royalty rules that existed before the current framework was introduced in 2013.

That means most of the money the Crown receives today is still determined by royalty arrangements established many years ago rather than the current system.

Jones said this reflects the long development timeline of mining projects. Exploration permits often take a decade or longer to become producing mines, and once a permit is granted, the royalty conditions usually remain in place for the life of the project.

Balancing Returns With Investment

The review highlights the balance policymakers need to strike when considering any changes to the royalty regime. Increasing royalties could raise government revenue, while maintaining competitive settings is important for attracting long-term investment and providing certainty for mining companies.

The report does not recommend immediate changes but outlines how different royalty approaches would affect both Crown revenue and the wider mining sector.

Jones said the independent analysis gives the Government a stronger evidence base for assessing future policy options while considering the long-term stability of New Zealand's minerals industry.

Mining's Contribution to the Economy

The Minister said royalties collected from Crown-owned minerals contribute to economic development and help fund public services. Mining projects also generate broader economic benefits through company taxes, employment, wages, and spending in regional communities where many operations are located.

He said the growing global demand for critical minerals makes it increasingly important for New Zealand to ensure its royalty system delivers an appropriate return while supporting continued investment in the sector.

Further Policy Work Planned

The Government will continue reviewing mineral royalty settings, with further policy advice expected in 2027. Any decisions on changing the royalty regime are planned to be considered during the next term of government.

New Zealand's mineral royalty framework was last comprehensively reviewed in 2012. Since then, changes in commodity prices, market conditions, mining activity, and global demand have reshaped the sector, prompting the latest assessment. The Deloitte review covers mineral royalties only and does not include petroleum royalties, which operate under a separate regulatory system.