WA Mining Royalties
MagNet’s members are embarking on extremely capital-intensive, long-term projects that promise significant export revenue for Australia and major development and employment prospects for regional communities.
Investment support is crucial in getting these projects underway and driving the infrastructure development necessary to serve regional communities for the long-term. It is reasonable for government to encourage investment in the emerging magnetite industry by providing some start-up phase concessions on mining royalty imposts. Collectively, MagNet’s members represent nearly $400 million in estimated annual royalty revenue to WA alone, should all projects proceed to bankable feasibility and production phases.
The announcement by Premier Barnett in November 2012 to reduce royalty rates for start-up magnetite projects has been welcomed by MagNet’s five member companies. As well as benefitting the Gindalbie AnSteel Joint Venture Karara project and the CITIC Pacific Mining Sino Iron project, the decision to reduce royalty rates for a set period for all start-up projects demonstrates the Western Australian Government’s support for the emerging magnetite industry. It also sends a strong message to potential investors that the WA Government is serious about attracting new large scale investment to this State.
Detail of the concessions and implementation dates are currently being negotiated between the industry and are yet to be legislated by the Barnett WA Government.
In recognition of the challenges faced by the magnetite sector, MagNet prepared a submission to the State Government’s recent review of royalties relating to magnetite (see below). MagNet sought a moratorium on mining royalties for the first five years of any new magnetite project.