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PERTH (miningweekly.com) – The Western Australian state government was assisting iron-ore miners to combat the current downturn in the sector, with Mines and Petroleum Minister Bill Marmion on Tuesday announcing that the government was looking at a number of amendments to the Mining Act, while also freezing port tariff increases at Utah Point, in Port Hedland.
The Minister told delegates at the Global Iron and Steel Forecast conference, in Perth, that amendments to legislation would remove duplication, inject greater certainty in decision-making processes, and would speed up decisions on projects.
Marmion on Tuesday also announced amendments to the Valuation of Land Act that would address anomalies which had inadvertently led to excessive rises on some tenements, a situation that was unforeseen by previous lawmakers.
“We received strong representations from the Association of Mining and Exploration Companies and the Chamber of Minerals and Energy (CME) and we shared their concerns that these high rates are a disincentive for explorers in these challenging times,” he said.
The recent increases for mining tenements resulted from regulation changes in 2006, which escalate state government rents as exploration licences near the end of their terms, under the ‘use it or lose it’ principle.
The new legislation would reduce and stabilise local government rates by dropping the five times multiplier on petroleum permits and ensuring the unimproved value of mineral exploration licences was calculated on the rent payable in their first year.
Meanwhile, Marmion said the state government had frozen port fee increases at Utah Point for at least the next 18 months, in an effort to assist the iron-ore miners in transitioning from construction to production.
He noted that while the fall in the Australian dollar had provided some benefits for local miners, operating costs continued to rise, with miners responding with cost cutting measures, which ultimately led to job losses, reduced capital expenditure and the halt of expansion plans.
“The number one challenge for Western Australia is to remain cost effective, and the best way for the government to encourage this is to cut red tape and streamline processes,” Marmion said.
In addition to the measures announced on Tuesday, the government also introduced a three-year rebate programme on magnetite royalties, which began in April 2013, and a similar 12-month relief package for junior haematite miners.
The CME on Tuesday welcomed Marmion’s announcement, with CEO Reg Howard-Smith saying the industry had witnessed extraordinary local government shire rate increases in the 2014/15 year where some ratepayers had had increases of several thousand per cent.
“These significant cost increases are not sustainable and have a major impact on a company’s ability to appropriately budget, source cash funding and attract investment into exploration and resources projects,” said Howard-Smith.
He added that CME was hopeful the new legislation would reduce and stabilise valuations used in determining local government rates by dropping the five times multiplier on petroleum permits and ensuring the unimproved value of mineral exploration licences was calculated on the rent payable in their first year, without escalations based on the period the licence had been held.