New Zealand minerals royalties broadly match overseas

New Zealand's minerals royalty regime is transparent and broadly comparable with similar overseas systems, according to an independent Deloitte New Zealand analysis commissioned by the Ministry of Business, Innovation and Employment. The review found the overall government take from mining was broadly in line with other countries examined.

The assessment covers the Crown's return from mineral development, including royalties and company tax, and gives the government an external benchmark as it considers whether current settings deliver an appropriate return from Crown-owned minerals.

Resources Minister Shane Jones said the work provides an evidence base for understanding how alternative royalty structures would operate in practice. It also examines the trade-offs involved in any policy shift, including the balance between state revenue, investor certainty, and the mining sector's long-term stability.

One of the central findings was that most royalty income still comes from older permits issued under rules that pre-date the current framework. Deloitte found about 97 per cent of mineral royalty revenue in 2025 came from permits operating under legacy royalty regimes rather than the system introduced in 2013.

That means the Crown's income from mining is still shaped largely by decisions made years earlier. Mining permits can remain in place for the life of a project, and developments often take many years to move from exploration to production.

Jones said that timing matters when judging the effect of policy changes on government income and investor behaviour.

"Importantly, the report provides the Government with an independent evidence base on how different future royalty settings would operate in practice and the trade-offs associated with different approaches," Jones said.

The review comes as policymakers reconsider a regime that has not undergone a full overhaul since 2012. Since then, commodity markets, mineral prices, industry activity, and wider policy priorities have shifted, prompting officials to revisit whether the framework remains fit for purpose.

Legacy settings

The dominance of older permits in the royalty base underlines the long time horizons involved in extractive industries. A permit issued at the exploration stage may take a decade or more to become a producing mine, and the royalty terms attached to it usually remain unchanged throughout the project's life.

That structure limits the immediate impact of any new regime on government receipts. Even if ministers adopt new settings, most near-term royalty revenue would still be determined by older arrangements unless new projects enter production at scale.

Jones said that lag helps explain why the current revenue mix does not necessarily reflect the policy framework now in force.

"It is important to note that mining projects don't happen overnight. A permit granted years ago at the exploration stage could take a decade or more to become a producing mine, and in most cases the royalty arrangements stay with that permit for its life," he said.

Policy balance

The report also highlights the tension governments face when designing royalty systems. Raising the Crown's share may improve public returns from mineral extraction, but more aggressive settings can affect project economics and alter investment decisions, particularly in sectors with long lead times and volatile prices.

For New Zealand, that debate is gaining weight as interest grows in critical minerals and their commercial value. Policymakers are assessing whether the present system gives the public a fair return while still providing enough certainty for companies willing to commit capital to exploration and development.

Jones framed the issue as part of a broader economic discussion about regional development and public revenue.

"The report also highlights the trade-offs that would need to be considered in any change to the royalty regime, including the balance between Crown returns, investment certainty, and the long-term stability of New Zealand's minerals sector.

"Royalties from Crown-owned minerals support economic development and help pay for the things we need as a country. Along with the associated spending by mining companies, including wages and tax, the extraction of minerals provides a huge benefit to our regions.

"With the emergence of critical minerals as a source of economic benefit to New Zealand, it's important we consider our royalty regime and whether it provides a fair return," he said.

The Deloitte work does not cover petroleum royalties, which sit under a separate regime. Its focus is confined to minerals, a distinction that matters because the economics, regulatory treatment, and revenue patterns of oil and gas projects differ from those of hard-rock and other mined resources.

Officials will continue policy work on mineral royalty settings, although any formal changes would depend on a later government decision. For now, the main practical conclusion is that New Zealand's current approach sits within the range seen abroad, even as most of the Crown's mineral revenue continues to flow from legacy permits rather than the post-2013 regime.