WA magnetite miners can now apply for an up to 50 per cent rebate on royalties paid in the first year of production, Premier Colin Barnett recently announced.
Speaking at the official opening of the Karara project in the state’s Mid West last month, Mr Barnett said the rebate would be considered on a project-by-project basis, and would return to the full royalty rate of 5 per cent after the first year.
The concession, which would be available for the next three years, would provide a major boost for the developing WA magnetite ore industry and promote the nation to Chinese investors, he said.
“Western Australia has vast magnetite resources and this ore is preferred by many Chinese steel mills,” he said.
“However, bringing magnetite ore to grades suitable for export is capital and energy intensive, so this royalty rebate will assist in recovering the massive investment required to achieve production.”
Association of Mining and Exploration Companies (AMEC) chief executive Simon Bennison told The West Australian last month the rebate was a great incentive for magnetite producers, who faced immense start-up costs.
“Despite the fact that the rebate will only apply for the first year, before returning to the full royalty rate of 5 per cent, it will provide magnetite miners welcome financial and cash flow relief and allow companies to develop their business,” he said.
In 2011, Deloitte Access Economics estimated a magnetite industry could generate $4.5 billion and 4000 jobs for Australia’s economy, mostly in WA.
According to the State Government, there are currently 29 potential magnetite mines at different stages of planning and development in WA.
The two largest projects include the recently opened Karara and the state’s largest magnetite development, the Sino Iron project, which is owned by Hong King-based CITIC Pacific.