Exploration for and the extraction and processing of minerals are generally (but not exclusively) carried out by private sector companies, despite the public ownership of mineral resources. Companies are often exposed to significant risks that flow from the substantial capital investments required, the long exploration and pre-production periods during which no revenue is generated, and the generally long life of mining projects, paired to the volatility of commodity markets as well as other technical and environmental uncertainties inherent in individual mining projects. On the other hand, given the volatility in the price of mineral commodities, mining operations have the capacity to generate surplus revenues in excess of all costs of production. This surplus is known as economic rent1, and it is calculated as the margin realised after netting off from the gross mineral revenue all the costs of production (recurrent and capital recovery costs) as well as a minimum return on capital high enough to attract capital and retain it in the project. This minimum required return on capital, termed “normal profit”, compensates investors for foregoing the next best alternative investment opportunities, as well as for the timing and risk of the uncertain cash flows expected from the project. Revenue in excess of costs of production (economic rent), where costs of production include normal profit, is the target of special taxation regimes in the mining sector. The practical issue for governments, however, is how to design tax regimes that best meet their objectives. This paper provides a review of mineral royalties and other special taxes which apply specifically to the mining sector in mineral-rich countries, with emphasis on current arrangements in Australia. Mineral royalties have traditionally been considered a form of compensation to the community for the depletion of non-renewable resources. Special mining taxes including royalties are additional to the general income taxes and other forms of taxation levied on all sectors of an economy. They represent, therefore, different ways for governments to levy an additional share of the revenue flowing from mining operations relative to other non-mining activities. The paper sets out the objectives sought by governments in imposing these special taxes and then provides an analysis of the different forms in which these special taxes may be imposed. The importance of the mining sector in the Australian economy and the special taxation regimes imposed by some of the Australian States and the Commonwealth (federal) Government are also discussed as examples of the application of different fiscal regimes. The paper concludes with consideration of some pertinent enforcement and administrative issues that need serious consideration in designing a “best practice” mining sector taxation regime.