Page 78 - Azerbaijan State University of Economics

Fariz A. Guliyev: The economics of financial securities for environmental obligations and
their impact in royalty revenues from Alberta oil sands in North America

QET Qualifying Environmental Trust

APPENDIX 1: Summary of Royalty Practices
Selected North American Jurisdictions
Arizona British Michigan Nevada Northwest Ontario Saskat
(US) Columbia (US) (US) (Canada) (Canada) Chewan
(Canada) (Canada)
Law Provincial Provincial Provincial Provincial Provincial Provincial Provincial
Royalty Ad Profit based Ad Profit Profit Profit based Profit based
Type valorem (net revenue) valorem based based (net revenue)
and ad and ad
valorem (net valorem (net
proceeds) proceeds)
Royalty At least 13% net 2-7% 2-5% 5-14% 10% 5% of net
Rate 2% revenue or profit
2% net increases to
proceeds 10% with
life time
thresholds
Source: adapted from The World Bank – Mining Royalties, a global study of their impact on
investors, government, and civil society

Selected Latin American Countries
Argentina Bolivia Brazil Chile Dominican Mexi Peru
Republic co
Law Provincial National National None National None National
Royalty Ad Ad Ad n.a. Ad valorem, n.a. Ad valorem,
Type valorem valorem valorem creditable against based on
income tax cumulative
sales
Royalty 0-3% 1-6%, 0.2-3% n.a. 5% FOB export n.a. 0-3%
Rate based on
sales price
position
Source: adapted from The World Bank – Mining Royalties, a global study of their impact on
investors, government, and civil society
Selected AustralianJurisdictions
New South Wales Northern Queensland Western Australia
Territory
Law Provincial Provincial Provincial Provincial or
negotiated agreement
Royalty Ad valorem, profit Profit Based (% Ad valorem or Ad valorem, unit and
Type based in the Broken of netback value) unit based profit based
Hill District
Royalty 4-7% 18% 2.7% of value or 2.5-7.5% ad valorem
Rate variable royalty rate
Source: adapted from The World Bank – Mining Royalties, a global study of their impact on
investors, government, and civil society

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