Mining giant BHP Billiton has finalised an agreement with the Western Australian Government that will see increases to the the royalty rate payable to the State for 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 per cent of sales revenue to 6.5 per cent from 1 July 2012, and then to 7.5 per cent from 1 July 2013. This will align the royalty rate for Fines with the existing rate paid on Lump ore.

 

BHP Billiton Iron Ore President, Ian Ashby, said: "The changes to the State Agreements will give the Company greater certainty in planning and executing our growth projects, particularly the proposed Outer Harbour Development.”

 

The agreement comes months after the Federal Government warned that any royalty increases could result in the commonwealth suspending GST payments to the state.