Under Section 56M of the Mining Act 1971, all rental collected from tenement holders is paid into Treasury general revenue unless the mining lease, retention lease or miscellaneous purposes licence is granted over freehold land, or native title land that is held in exclusive possession. In these cases, 5% of the rental is retained by Government and the remaining 95% is distributed to the relevant owners of the land, subject to eligibility.
On this page:
- Changes to eligibility from 1 July 2025
- Changes to eligibility from 1 January 2020
- Landowner Information Service
Changes to eligibility from 1 July 2025
The State Budget released on 6 June 2024 included changes to eligibility for landowner rental distributions under the Mining Act 1971.
Importantly, the proposed changes will not apply retrospectively, to ensure current landowners that negotiated agreements under the previous regime are not unduly impacted.
Following the State Budget on 6 June 2024, DEM wrote to freehold landowners with mining tenements associated with their land to communicate proposed changes, which, subject to successful parliamentary debate are proposed to apply from 1 July 2025.
Freehold landowners, who are also tenement holders, or partly the same party as the tenement holder, or a 'related body corporate’ of the tenement holder who are not currently entitled to receive landowner rental distributions also received that notification. That approach was taken to ensure that those freehold landowners were made aware of the changes which, while currently having no impact on them, may impact the eligibility for future owners of the land.
From 1 July 2025 freehold landowners will not be eligible to receive landowner rental distributions for land associated with new applications for a mining lease, retention lease or miscellaneous purposes licence.
From 1 July 2026 where a freehold parcel is transferred, the new landowner will have reduced eligibility for the landowner rental distributions relating to that parcel, equal to 50% of the full entitlement. Transfers associated with deceased estates and interfamilial transfers will be excluded from this change and maintain their existing level of rental distributions.
To be satisfied that a transfer constitutes a familial transfer, the parties to the transfer may be required to provide information or evidence to DEM.
Examples - tenement applied for after 1 July 2025
Example 1
Company B applied for a mining lease on 29 June 2025. The tenement was granted on 15 October 2025. As the application was received before 1 July 2025, the freehold landowners are entitled to rental distributions.
Example 2
Company A applied for a retention lease on 15 October 2025. The tenement was granted on 20 January 2026. As the application for the tenement was received after 1 July 2025 the freehold landowners are not entitled to rental distributions.
Example 3
Company C applied for a mining lease on 30 June 2025. The application did not meet the application requirements and was determined to be invalid on 7 July 2025. This application is therefore disregarded for the purposes of determining eligibility for rental distributions. A subsequent application for a mining lease was received on 1 November 2025. The tenement was granted on 14 January 2026. As the application was received after 1 July 2025, the freehold landowners are not entitled to rental distributions.
Examples – transfers of land after 1 July 2026
Example 4
Example 5
Mr Doug Brown died on 19 December 2027. Following his death, his interest in freehold land, which was jointly held with his wife Karen, was transferred to Company D. The transfer was not pursuant to his Final Will and Testament and Company D has no familial connection with Doug. As the transfer was not pursuant to his Final Will and Testament, nor was it a familial transfer, Company D is entitled to 50% of the rental distributions that were payable prior to Doug’s death. Doug had been entitled to 95% of the relevant portion of the rental paid. Company D will therefore receive 47.5% of the relevant portion of rental paid, being 50% of the 95%.
Example 6
Mr Sagar Singh transferred his interest in freehold land to his brother’s spouse Mrs Larisa Singh. This transfer is considered a familial transfer and therefore after the transfer Larisa is entitled to 100% of the rental distributions for the parcel of land. Larisa therefore continues to receive 95% of the relevant portion of the rental paid.
Changes to eligibility from 1 January 2020
On 1 January 2020, eligibility for rental distributions changed, removing entitlement to rental distributions where a tenement holder and the owner of the freehold land are the same legal entity or natural person.
Companies
Where the tenement holder and the freehold landowner are related body corporates, the landowner is not entitled to rental distributions.
Section 50 of the Corporations Act 2001 (Cth) defines bodies as being ‘related’ where a body corporate is:
(a) a holding company of another body corporate; or
(b) a subsidiary of another body corporate; or
(c) a subsidiary of a holding company of another body corporate.
Examples – Not entitled to rental distributions
Example 1
Brown Earthmovers Pty Ltd holds an extractive minerals lease over freehold land owned by Brown SA Pty Ltd – a subsidiary of Brown Earthmovers Pty Ltd.
Brown Earthmovers Pty Ltd will pay the invoiced rental and the landowner (Brown SA Pty Ltd) is not entitled to rental distributions because it is a related body corporate of Brown Earthmovers Pty Ltd.
Example 2
Brown Earthmovers Pty Ltd holds an extractive minerals lease over freehold land owned by Brown Engineering Pty Ltd and Brown Construction Limited.
Brown Earthmovers Pty Ltd will pay the invoiced rental, and the landowners (Brown Engineering Pty Ltd and Brown Construction Limited) are not entitled to rental distributions because Brown Engineering Pty Ltd is a part-owner of Brown Earthmovers Pty Ltd.
Natural persons
Where the same person is a tenement holder and an owner of the land there is no entitlement to distribution of rental. This applies irrespective of whether the tenement or the land is owned in whole or part by that person.
Examples – Entitled to rental distributions
Example 3
Mr Doug Brown holds an extractive minerals lease over freehold land owned by his wife Mrs Karen Brown.
Doug will pay the invoiced rental amount and the landowner (Karen) is entitled to rental distributions.
Examples – Not entitled to rental distributions
Example 4
Mr Doug Brown holds an extractive minerals lease over freehold land he owns jointly with his wife Mrs Karen Brown.
Doug will pay the invoiced rental amount and the landowners (Doug and Karen) are not entitled to rental distributions because Doug is also the tenement holder.
Example 5
Mr Doug Brown, his wife Mrs Karen Brown and daughter Miss Sally Brown hold an extractive minerals lease over freehold land owned by Karen.
Doug, Karen and Sally will pay the invoiced rental amount and the landowner (Karen) is not entitled to rental distributions because she is also a tenement holder.
Trusts or self-managed superfunds
While real property can be held in a trust or self-managed super fund, the Real Property Act 1886 (SA) forbids the registration of beneficial interest on the title. Consequently, while the land may be held in a trust or a self-managed superannuation fund, the registered titleholder will be the trustee.
Examples – Not entitled to rental distributions
Example 6
Brown Earthmovers Pty Ltd holds an extractive minerals lease over freehold land owned by Brown Earthmovers Pty Ltd (as trustee for the Brown Family Trust or the Brown Family Super Fund).
Brown Earthmovers Pty Ltd will pay the invoiced rental amount and the landowner Brown Earthmovers Pty Ltd (as trustee for the Brown Family Trust or the Brown Family Super Fund) is not entitled to rental distributions because the trustee company appears on the title.
Directors or shareholders
The relationship between a shareholder or director and a company has no bearing on the eligibility for rental distributions.
Examples – Entitled to rental distributions
Example 7
Brown Earthmovers Pty Ltd holds an extractive minerals lease over freehold land owned by the company’s director Mr Doug Brown.
Brown Earthmovers Pty Ltd will pay the invoiced rental amount, and the landowner (Doug) is entitled to rental distributions.
Landowner Information Service
The Landowner Information Service provides free impartial information for landholders. The service is provided by Rural Business Support (RBS).
The service facilitates better understanding between the agricultural, exploration, quarrying and mining sectors, and builds greater knowledge within local government on how mineral exploration and mining operate in their council areas. It is particularly helpful for regional and farming communities wanting to understand their rights and responsibilities in relation to exploration, quarrying or mining under existing regulatory processes.
RBS is an organisation committed to building a profitable, sustainable and resilient rural sector by supporting businesses, farmers, landowners and communities in rural and regional South Australia.
This service is supported by the Government of South Australia, with the support of Primary Producers SA (PPSA), Grain Producers SA (GPSA), the South Australian Chamber of Mines and Energy (SACOME), Cement Concrete and Aggregates Australia (CCAA), the Association of Exploration and Mining Companies (AMEC) and the Australian Drilling Industry Association (ADIA).
More information about the Landowner Information Service including contact details can be found on the RBS website.
