BHP Billiton and the Western Australian government have reached agreement on an increase on the royalty rate the mining giant pays the state on its iron ore Fines product.
Based on this agreement, the Western Australian Government will proceed with amendments to the State Agreement Acts covering operations managed by BHP Billiton Iron Ore. These amendments will include an increase in the royalty rate applicable to iron ore Fines from 5.625% of sales revenue to 6.5% from 1 July 2012, and then to 7.5% from 1 July 2013. The changes will align the royalty rate for Fines with the existing rate paid on Lump ore.
While BHP Billiton would doubtless have preferred not to be obliged to hand over more money to the sate, BHP Billiton Iron Ore President, Ian Ashby, was putting a positive spin on the development, saying the changes would give the company greater certainty in planning and executing its growth projects, particularly the proposed Outer Harbour development.
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The Outer Harbour development is a proposed new port on the coast near Port Hedland in the Pilbara region of Western Australia, where BHP Billiton has one of its major iron ore assets.
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