WA’s mining royalty

The Western Australian Government intends on phasing out the 1960s era concessional royalty rates that apply to iron ore exports from the Pilbara, The Australian Financial Review reports.

The Western Australian Government intends on phasing out the 1960s era concessional royalty rates that apply to iron ore exports from the Pilbara, The Australian Financial Review reports.

The State Government wants both BHP Billiton and Rio Tinto to pay a higher rate of 5.625% instead of the current 3.75%

The increase would see the WA Government take in an extra $300 million a year in revenue.

In 2005 both BHP and Rio signed an agreement with the State’s then Labor government that would see the miner’s pay the 5.625% for expansions and new projects, and continue to pay the lower rate for existing mines.

WA Premier Colin Barnett now wants both companies to pay the higher rates.

“The concessional royalties are outdated, they have run their course,” Barnett told The Australian Financial Review.

“They have benefitted the major mining companies for the past 40 or 50 years but they don’t have a place now.”

In the financial year ending 2008 the WA Government received $482 million in royalties from BHP and $772 million from Rio.

A spokesperson from BHP declined to comment when contacted by MINING DAILY.

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