- Magnetite projects can apply for up to 50 per cent royalty rebate
A magnetite royalty rebate, to be considered on a project-by-project basis, will provide a major boost for a developing Western Australian iron ore industry sector, Premier Colin Barnett announced today.
Mr Barnett was speaking after attending the opening of the State’s first producing magnetite iron ore mine, the Karara Iron Ore Project.
“Western Australia has vast magnetite resources and this ore is preferred by many Chinese steel mills,” the Premier said.
“This industry has the potential to stimulate new investment and construction activity throughout the State.
“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.
“This means a rebate of up to 50 per cent of royalties paid will apply for the first 12 months of magnetite production, before returning to the full royalty rate of 5 per cent.”
The policy will apply for a three year period from now.
Mr Barnett said the Karara project was a major step forward for the State and for the Mid-West region.
He congratulated Karara Mining Limited partners, Gindalbie Metals and the Anshan Iron and Steel Group Corporation (AnSteel), on their success.
“The State Government has worked closely with the proponents to get this project up and running and I congratulate them on getting to the production stage,” the Premier said.
“Karara is an outstanding example of the positive impact Chinese investment is having in WA.
“It is a significant achievement in terms of Chinese investment and a major example of Chinese confidence in Western Australia.”
Mines and Petroleum Minister Bill Marmion said the $2.57billion Karara project would produce many benefits for local communities, the region and the State over its expected 35-year life.
“In addition to creating important new employment and business opportunities, Karara has made a significant investment in community projects, in Morawa and the Mid-West,” Mr Marmion said.
The Minister said the project employed more than 2,400 people at peak construction and had generated 500 direct permanent jobs.
He said the mine would initially produce eight million tonnes per annum (mtpa) of magnetite, with the potential to expand to 16mtpa or more.
AnSteel’s integrated steelworks at Bayuquan, China will take all the project’s iron products.
Mr Barnett said the Western Australian Government had worked closely with the Karara partners to secure the project, including upgrading the Pinjar to Eneabba electricity transmission line from 132kV to 330kV, and facilitating regulatory approvals.
The Premier said as the Mid-West’s largest iron ore exporter, Karara would also have a role in securing a deep water port for the region at Oakajee.
Under the Magnetite Royalty Rebate up to 50 per cent of the 5 per cent royalty on magnetite will be returned to the producer
There are currently 29 potential magnetite mines at different stages of planning and development in WA
In 2011, Deloitte Access Economics estimated that a magnetite industry could add $4.5 billion and 4,000 jobs to Australia’s economy - mostly in Western Australia
The 5 per cent royalty rate for magnetite, compares with a 7.5 per cent rate for haematite, the ore currently exported from Western Australia
The Karara Iron Ore Project minesite is 320km north-east of Perth, and 200km east of Geraldton
In addition to the mine and processing facilities, project infrastructure includes 85km of new railway plus upgrades to the existing network; 180km of 330 kV power line from Eneabba to Karara; 140km water pipeline from Mingenew to Karara; and train unloader, storage and handling facilities and berth at Geraldton port
Premier’s office - 6552 5000
Mines and Petroleum Minister’s office - 6552 6800