PERTH (miningweekly.com) – The Western Australian government has announced a suite of measures to assist in developing potash projects in the region.
Mines and Petroleum Minister Bill Johnston on Thursday said that due to the unique nature of potash projects, the state government would introduce a new rental rate for potash projects that were granted a new class of mining lease for restricted minerals.
The existing rental rate of A$18.70 a ha was found to be inappropriate for industrial minerals in brine because these operations require larger mining leases than other forms of mining.
Once approved, minerals in brine mining leases would benefit from a reduced rental rate set at A$2.32 a ha for the first five years of the lease, and A$4.64 a ha from year six onwards.
“These changes will assist the development of a new industry in Western Australia, and create employment and community development opportunities, particularly in remote Aboriginal communities,” Johnston said.
“Potash is vital for agriculture because it is an essential nutrient in fertilisers that protects food crops from disease and pests, and improves water retention, yield, taste and appearance.
“The new industrial minerals in brine mining tenure for potash projects will help stimulate this very important mineral sector and create jobs for Western Australians.
“Potash projects generally have a mine life that spans 30 to 40 years, so this longevity is a win for local communities and sustaining jobs,” he added.
The Association of Mining and Exploration Companies (Amec) has welcomed the reduction to the rental rates for potash projects, with CEO Warren Pearce saying it was an innovative step to help Western Australian potash projects get off the ground.
“For small and developing companies, the state government has lowered a barrier of entry that will encourage more potash projects in Western Australia.”
Pearce noted that despite the recovery, companies developing a project were faced with a number of challenges, such as raising capital, obtaining land access, the red tape and regulatory burden, high operating costs, and community expectations.
“This is what governments can do to attract investment and other states should take note.
“Governments can support industry by adjusting the financial and regulatory framework to support near term development of a number of potash projects; this will drive regional development, job opportunities and economic growth.
“A successful, sustainable and robust mining and mineral exploration sector creates jobs and economic and social dividends for the community, and should be a priority for our political leaders,” says Pearce.
The new potash rental rates are expected to come into effect in the new year.
The cut to rental rates has also been welcomed by players in the industry, with ASX-listed Agrimin telling shareholders on Thursday that it would submit its mining lease application for its Mackay sulphate of potash (SoP) project once the reduced rental rates came into effect.
“This decision acknowledges the importance of a new SoP industry to Western Australia and we recognize the support the state is providing by arriving at this outcome,” said Agrimin CEO Mark Savich.
“The development of the Mackay SoP project will include a large investment in regional infrastructure extending from Lake Mackay to Wyndham, and will create long-term employment and economic opportunities for several of the state’s most remote communities.
“This rental reduction is an important milestone in facilitating the successful development of the Mackay SoP project, which has the potential to become the world’s largest and lowest cost supplier of seaborne SoP.”
Fellow-listed Salt Lake Potash has also welcomed the initiative, with CEO Tony Swiericzuk saying that the commitment by the government would provide significant benefits as the company progressed its Lake Way project.
“We look forward to working with the government in the development of a new industry in Western Australia that will create vast opportunities to remote regions, including Wiluna.”