Mining in PNG
BHP and the WA Government have reached an agreement over the royalty deductions dispute, with the miner agreeing to cough up $250m in back payments.
The state government had earlier this year said it would seek royalty payments of up to $300m from BHP, which it believed was underpaid over a 12-year period.
Following an audit by the Department of Mines, Industry Regulation and Safety (DMIRS), the State Government had been engaged in negotiations with BHP in good faith, to resolve the matter in the best interests of WA.
The investigation came after the Australian Taxation Office reached a settlement agreement with BHP relating to its marketing operations in Singapore last year, in which the miner agreed to pay $529m in additional taxes for the years 2003 to 2018, without admission of tax avoidance.
This was in addition to the more than $75b in Australian taxes and royalties that has already been paid by BHP over that same period.
The WA settlement with BHP (and joint venture partners Mitsui and Itochu) marks the end of proceedings, and prevents taxpayers being exposed to lengthy and expensive legal proceedings.
Premier Mark McGowan said he was pleased at the “very positive outcome”, with $250m now earmarked towards worthy projects.
“I am assured by BHP and its joint venture partners that they did not intentionally seek to minimise royalty payments, and I accept this advice, and thank BHP for working to resolve this dispute co-operatively with the State,” Mr McGowan said.
“The State Government has a strong, long-running relationship with BHP that has benefited all Western Australians. We look forward to that relationship continuing long into the future.
“I commend DMIRS for its work in identifying the royalties dispute and the State Solicitor’s Office for its efforts in achieving a good outcome on behalf of the WA taxpayers.”
A BHP statement said the rift involved a technical interpretation of the law and that there was no assertion by the state that BHP, or its JVPs, had deliberately or knowingly sought to avoid or minimise the royalties payable to WA.
From the funds, the McGowan Government will allocate $230m towards the construction of a new women’s and maternity hospital at the QEII site, replacing King Edward Memorial Hospital. This follows the $3.3m included in the Budget to begin planning for the new hospital.
A total of $15m will go towards much-needed upgrades and repairs at Hedland Senior High School, including upgrades to Hardie House, classrooms and specialist rooms, and covered recreational areas.
A further $5m will be directed to Newman Hospital for additional upgrades, including extra inpatient beds and an expanded procedure room. This is on top of the $48.7m already allocated for the new Newman Hospital.