Western Australia confirms no royalty rise for the mining industry

24 March 2015 (Last Updated March 24th, 2015 18:30)

Western Australia Mines and Petroleum Minister Bill Marmion has announced that mining royalties will not be raised in the new budget.

Western Australia Mines and Petroleum Minister Bill Marmion has announced that mining royalties will not be raised in the new budget.

Marmion made the statement following a detailed review of the Mineral Royalty Rate Analysis (MRRA) in order to establish whether firms are paying adequate fees.

A team carried out the review with contributions from the Association of Mining and Exploration Companies and the Chamber of Minerals and Energy.

Marmion said: "I can confirm that there will be no changes to royalty rates in this year's budget.

"The decision will provide some certainty and confidence back into the market and allow companies to grow and generate additional royalty revenue."

"The state government notes the review's endorsement of the ad valorem system and the 10% benchmark of mine-head value as an appropriate gauge for royalty returns to the community."

Marmion further noted that review presented 18 recommendations for consideration before confirming that no rate changes would take place under the 2015 budget.

"I can also assure Western Australian industries and communities that, should there be any future discussion of mineral royalties, the Liberal National Government remains totally committed to consultation over the issue," Marmion added.

MRRA was introduced in 1981 and the system is said to have undergone three royalty reviews since.

Checks conducted in 1984-1986 and again in 1994 both resulted in no changes to the system.

According to the report, the Department of Mines and Petroleum collected more than $5.9bn of royalties during 2013 from mineral and petroleum producers in Western Australia.

Association of Mining and Exploration Companies CEO Simon Bennison said: "The government has clearly listened to industry and community concerns that there would have been massive unintended consequences if rates had been increased.

"It is also excellent news for thousands of workers, contractors, suppliers and investors who would have been badly affected.

"The decision will provide some certainty and confidence back into the market and allow companies to grow and generate additional royalty revenue."