CSG royalty review

The NSW Government has announced it is reviewing the "royalty free period" granted to coal seam gas mining companies in their first five years of operations. Under the current regulations companies pay no royalties for the first five years, and then start at a rate of 6% in the sixth year which goes up by 1% a year until it reaches the maximum of 10%.

In Queensland, a 10% royalty is enforced from day one of mining operations.

The review has been welcomed by the Greens and local environment groups.

"The current arrangements are a slap in the face to the NSW community. Coal seam gas companies like Santos are proposing to put at risk our water, agriculture and the environment, but will not pay one red cent in royalties for the first five years of production. Certainly the gas royalty rate in NSW should at least match Queensland's 10%," Greens MLC Jeremy Buckingham said.

Michael McNamara from the Northern Rivers Guardians said the government should go further and cancel all exploration and production licences granted prior to the last election and require the companies to reapply.

"It is imperative that the state government stands with the community to ensure that adequate and appropriate provisions and protections are put in place before any further activity by this industry is allowed," he said.

The government has not given a time frame for the review.

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