BHP, Rio may face early tax in West­ern Aus­tralia

New Straits Times - - Business -

SYD­NEY: West­ern Aus­tralia may ask Rio Tinto Group and BHP Bil­li­ton Ltd to pay po­ten­tially bil­lions of dol­lars to end a min­ing rent tax to help patch a bud­get dec­i­mated by lower com­mod­ity prices.

The state gov­ern­ment is seek­ing ad­vice on a pro­posal that would see the na­tion’s two big­gest min­ers pay out an ironore levy early in a one-off lump sum, State Pre­mier Mark McGowan said yes­ter­day.

The op­po­si­tion Na­tional Party last week said in par­lia­ment that such a plan could raise as much as A$4 bil­lion (RM12.81 bil­lion) for the state, which hosts the gi­ant Pil­bara iron ore mines.

“We have a very ma­jor bud­get is­sue in West­ern Aus­tralia and it’s quite cat­a­strophic,” McGowan told re­porters in Perth.

“We’re look­ing at many op­tions as to how to ad­dress that. One of the op­tions that has been sug­gested is whether or not there is a buy­out of the lease rental fee.”

West­ern Aus­tralia’s Labour ad­min­is­tra­tion faces a daunt­ing task in turn­ing around its econ­omy. The gov­ern­ment has pre­vi­ously said that eras­ing a debt moun­tain of more than A$30 bil­lion would take decades.

In­stead of in­creas­ing the min­ers’ rental pay­ments levied on iron ore, cur­rently fixed at 25 Aus­tralian cents a tonne, the com­pa­nies would be asked to pay them out in ad­vance un­der the po­ten­tial plan. The pro­posal has so far re­ceived luke­warm re­sponse from BHP and Rio, who fought against a Na­tional Party pro­posal to boost the levy to A$5 a tonne dur­ing the elec­tion.

“We are not in talks with the West­ern Aus­tralia gov­ern­ment” on the pay­out pro­posal, said a BHP spokesman yes­ter­day.

“BHP has paid about A$11 bil­lion in roy­al­ties to the West­ern Aus­tralia gov­ern­ment in the past decade.”

“Rio Tinto has not had any for­mal dis­cus­sions with the West­ern Aus­tralian gov­ern­ment about pay­ing out the iron ore lease rental charge,” said a Rio Tinto spokesman.

“Rio Tinto has pre­vi­ously re­jected the pay­out pro­posal.” Bloomberg

B LOOMBERG PIC

The West­ern Aus­tralia gov­ern­ment is seek­ing ad­vice on a pro­posal that would see the na­tion’s two big­gest min­ers, BHP Bil­li­ton and Rio Tinto, pay out an iron-ore levy early in a one-off lump sum that could amount to A$4 bil­lion.

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