PERTH (miningweekly.com) – Mining major BHP has reached a A$250-million settlement with the Western Australian government in a royalty dispute.

The state government earlier this year said that it would seek royalty payments of up to A$300-million from BHP, which the state believed was underpaid over a 12-year period.

The Western Australian investigation comes only months after the Australian Taxation Office reached a settlement agreement with BHP relating to its marketing operations in Singapore.

As part of the settlement, BHP agreed to pay A$529-million in additional taxes for the years 2003 to 2018, without admission of tax avoidance. The A$529-million was in addition to the more than A$75-billion in Australian taxes and royalties that has already been paid by BHP over that same period.

The state government on Friday announced that the A$250-million settlement with BHP and its joint venture partners was the end of this dispute, and prevented taxpayers being exposed to lengthy and expensive legal proceedings.

"This settlement resolves the dispute with BHP, and I'm pleased we've been able to negotiate a very positive outcome for Western Australian taxpayers, with A$250-million directed towards worthy projects,” said Premier Mark McGowan.

The state government will allocate A$230-million towards the construction of a new women's and maternity hospital at the QEII site, replacing King Edward Memorial Hospital.

A further A$15-million will go towards much-needed upgrades and repairs at Hedland Senior High School, including upgrades to Hardie House, classrooms and specialist rooms, and covered recreational areas.

A further A$5-million will be directed to Newman Hospital for additional upgrades, including extra inpatient beds and an expanded procedure room. This is on top of the A$48.7-million already allocated for the new Newman Hospital.

"The state government has a strong, long-running relationship with BHP that has benefited all Western Australians. We look forward to that relationship continuing long into the future,” McGowan said.