Iluka amends BHP royalty agreement
PERTH (miningweekly.com) – Mineral sands miner Iluka has amended a royalty agreement covering its Mining Area C, with mining major BHP Billiton and its joint venture partners.
The ASX-listed company pointed out that the royalty agreement had been in place since 1994. However, since then, the basis on which iron-ore was marketed and sold had changed significantly. To reflect this change, the royalty had now been amended.
The modification would increase the revenue base on which the royalty was payable, but would decrease the royalty rate from 1.25% to 1.23%, with the changes being backdated to July 2014.
As part of the changes, Iluka had received a one-off $8-million payment.
Mining Area C, in which Iluka holds an in-perpetuity royalty over the iron-ore produced, is one of BHP’s Pilbara assets and is considered a low-cost, long-life resource.
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