MARKET TALK: BHP, Rio Agree To Higher WA Iron Ore Royalties

21st Jun 2010 08:02

0702 GMT [Dow Jones] BHP Billiton (BHP.AU) and Rio Tinto (RIO.AU) agree to pay higher royalties in Western Australia in a move that looks calculated to win support from the state government for their iron ore joint venture. The miners have signed a non-binding agreement to raise royalty rates to 5.625% of iron ore fines sales revenue from 3.75% previously. In return the government amends state agreements to allow the miners to share infrastructure and blend products. "This will improve our operating efficiency and we are pleased to be able to share the gains from this enhancement with the people of Western Australia," BHP CEO Ferrous and Coal Marcus Randolph says. The change will add A$350 million to the state's revenue and is a big win for Premier Colin Barnett, who has loudly argued that if the JV was to go ahead the pair's royalties should rise. The higher impost also feeds into the miner's argument that they are paying their fair share as they oppose the federal government's Resource Super Profits Tax. ([email protected]) Contact us in Singapore. 65 64154 140; [email protected] (END) Dow Jones Newswires June 21, 2010 03:02 ET (07:02 GMT)