Any upward adjustments in the mining royalty rates to be implemented by states and territories will all be unacceptable to Prime Minister Julia Gillard as this would put Australia's top mining resources industry at risk.

PM Gillard told reporters in Canberra on Wednesday there were a ''broad range of discussions'' under way through a committee headed by Mr Ferguson and former BHP Billiton boss Don Argus.

''We've said all along we will credit existing royalties and scheduled increases,'' she said after talks arose that a new row maybe brewing with the mining shareholders.

Mrs Gillard said she stands firm on the mining agreement struck with the mining industry in July.

The Australian government entered into an agreement with big miners and the under the agreement, "state mining royalties are credited back to companies to offset the money they will have to pay under the proposed mineral resources rent tax."

Nevertheless, Australian Resources and Energy Minister Martin Ferguson had said future increases in state royalties could not be offset by cuts to the planned 30 percent mining tax on iron ore and coal.

"The government's position on this issue is clear - royalty rates that applied or changes to royalty rates that were scheduled to apply in the future, as at May 2, 2010, will be credited," Ferguson said in an e-mailed statement today and reported on Bloomberg.

RELATED STORIES