Higher prices reliably produce higher royalty demands, and it is not unreasonable that they do. The question is whether the mechanism holds up when the price falls again.
Sliding scales versus flat rises
A sliding scale indexed to the price shares the cycle in both directions and survives a downturn. A flat increase legislated at the top of the market becomes the thing that closes marginal mines at the bottom of it.
The investment consequence
Capital does not price the rate so much as the volatility of the rate. Predictability is worth several percentage points.
