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Pilbara joint venture stalls

The joint venture between BHP Billiton and Rio Tinto has hit another speed bump with WA premier Colin Barnett accusing the miners of ignoring the States demands, according to the Australian.

Yesterday, Barnett claimed that the miners are getting away with murder through paying lower royalty rates as the premier continues to force Rio and BHP to pay additional royalties worth around $300 million per year.

Relations between the resource giants and the State have reached a chilly low, with neither meeting for talks regarding the iron ore joint venture since early November last year.

This is in spite of the fact Barnett announced that the State and the miner would meet every eight weeks to allow for amendments to Western Australias mining laws, which will be needed for the joint venture to proceed.

However, it has been nearly double the allotted time since the parties have met.

This breakdown in communications is expected to exacerbate the already tense relations for the $131 billion dollar project, Barnett pointing out to both BHP and Rio, that while you may eventually get regulatory approval you have to deal with the state of Western Australia because the state of Western Australia owns the iron ore, the Australian said.

Barnett has announced that miners will have to begin paying the royalties on the Pilbara project by 1 July, despite the joint ventures completion date being forecast for well beyond the deadline.

The premier also tabled a stamp duty of up to $1 billion for the iron ore joint venture, although regulators will decide on whether the deal actually institutes a change of ownership.

This follows on the back of the Henry Tax Review by the Government which is claimed to be considering the raising of mining royalty taxes.

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