The WA State Government has offered aspiring magnetite
producers in Western Australia a 50% royalty concession applicable
to the first year of magnetite production.
Western Australian Premier Colin Barnett has announced that
magnetite producing iron ore companies may apply, on a
project-by-project basis, for a 50 percent rebate on royalties paid
to the State Government during the first 12 months of magnetite
The full royalty rate of five percent will apply following the
12-month concession period.
Mr Barnett outlined the concessions, which will be available for
magnetite miners for the next three years, on Tuesday at the
official opening of the Karara magnetite iron ore project in
WA's mid-west. The Karara project, a joint venture project
between Perth-based Gindalbie Metals Ltd and Chinese company Anshan
Iron and Steel Group Corporation, is Western Australia's first
producing magnetite iron ore mine.
Mr Barnett stressed that the magnetite iron ore industry has
"the potential to stimulate investment and construction
activity throughout the State." Mines and Petroleum Minister
Bill Marmion observed that the Karara project alone employed more
than 2,400 people during construction, and has created 500
However, the magnetite industry has been hampered in recent
years by a falling commodity price, by the shelving of the planned
Oakajee port, and as a result of the investment required to cover
the high processing costs involved in producing magnetite at a
quality suitable for export (as compared to the traditional
hematite iron ore and other direct-shipping ore that does not
require significant processing).
Mr Barnett noted that the rebate "will assist in recovering
the massive investment required to achieve production" for
magnetite projects. Mr Barnett described the Karara project as a
great example of the positive impact of Chinese investment, noting
that Western Australia has vast magnetite resources and such ore
"is preferred by many Chinese steel mills."
Western Australia currently has 29 potential magnetite projects
at various stages of development. The rebate should entice more
magnetite miners to follow Gindalbie's lead into production,
and hopefully assist those miners in attracting the necessary
capital to develop their projects.
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
Persons listed may not be admitted in all states and
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
It is a common misconception that the grant of mining tenure, whether it be an Exploration Permit, Mineral Development Licence or Mining Lease, will entitle the holder to access all land within it in order to explore or mine.
This briefing note sets out a likely structure for the proposed privatisation of the networks and identifies key issues.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).