MINERALS RESOURCE RENT TAX ACT 2012 (REPEALED)

CHAPTER 4 - SPECIALIST LIABILITY RULES  

PART 4-4 - VALUATION  

Division 170 - Valuation principles  

Operative provisions  

SECTION 170-10   THE VALUATION PRINCIPLES  
Basic principle

170-10(1)    
A valuation relating to a mining project interest or * pre-mining project interest is to be reasonable having regard to the objects of the * MRRT law .

Sub-principles

170-10(2)    
A valuation that is to be made as at a particular time may take into account:

(a) things that have actually happened before that time; and

(b) things that, as at that time, are reasonably expected to happen after that time.

Example:

A valuation of the rights and interests that constitute a mining project interest as at a particular time may take account of a reasonable estimate, as at that time, of the coal price at a future time. The actual coal price at that future time is not taken into account.

170-10(3)    
The sum of the values of all things in a set must equal the value of the set.

Example:

A mining operation is valued as at 1 May 2010 at $ 6 billion. Downstream assets (such as crushers and transport infrastructure) are valued at $ 2 billion. Upstream capital equipment is valued at $ 1 billion. The value of all other assets in the operation, including mining rights, must be $ 3 billion.

170-10(4)    
Identical things in identical circumstances have the same value.

170-10(5)    
An assumption or estimate relating to a mining project interest or * pre-mining project interest :

(a) is to be reasonable when considered in isolation; and

(b) is to be reasonable when considered together with all other assumptions or estimates made in relation to the interest; and

(c) is to be made consistently for all things relating to the interest.

Example 1:

An estimate of a commodity price at a future time must itself be reasonable, and must also be reasonable when considered together with all other assumptions or estimates about things that may affect the commodity price (such as a currency exchange rate).

Example 2:

If the value of a mine is worked out on the assumption that mine production will rise to a particular extent over time, the valuation of each asset within the project must use a consistent assumption.

170-10(6)    
A valuation relating to a mining project interest or * pre-mining project interest is to be reconcilable with each other valuation made relating to the interest (including, if relevant, a valuation relating to a pre-mining project interest from which a mining project interest * originates ), if that other valuation:

(a) was made after 1 May 2010; and

(b) was made for the purposes of working out an amount under the * MRRT law ; and

(c) is, if it is a valuation of a thing of which there is more than one valuation meeting the requirements in paragraphs (a) and (b), the most recent such valuation.

Priority of basic principle

170-10(7)    
To the extent the application of a sub-principle in subsections (2) to (6) to a particular valuation would conflict with the basic principle in subsection (1) , the basic principle is to be applied and the sub-principle disregarded.