Bills Passed To Expand Iron Ore Industry

Bills Passed To Expand Iron Ore Industry

Western Australia Premier Colin Barnett

Changes To State Agreements Finalised

Victor P Taffa

Legislation that enables major Modernisation and Expansion of Western Australia’s Iron Ore Industry and a significant boost to the State’s finances has been passed by State Parliament last night.

Premier Colin Barnett said that a special sitting of the Legislative Council had approved two significant Bills:

  • The Iron Ore Agreements Legislation Amendment Bill (No. 2) 2010, which changes 11 State Agreements held by BHP Billiton and Rio Tinto, to give them the flexibility to improve their efficiency and facilitate integration and expansions of their operations;
  • A Variation Agreement to the Railway and Port (The Pilbara Infrastructure Pty Ltd) Agreement Act 2004 will enable construction of a Rail Spur to Fortescue Metals Group’s (FMG) Solomon Projects and expanded export facilities at Port Hedland Port.

Premier Barnett said the changes to the BHP Billiton and Rio State Agreements removed current restrictions on the companies integrating their operations and building shared infrastructure such as electricity generation or rail lines.

“In recognition of the value of these changes, BHP Billiton and Rio Tinto have agreed to make a one-off payment of $350 Million to the State, once the Bill receives Royal Assent.” the Premier said.

“This Payment will help fund the new Children’s Hospital to be built at the QEII Medical Centre.”

“The changes follow legislation enacted in August 2010 which brought royalty payments by BHP Billiton and Rio Tinto into line with those paid by other iron ore producers.” Premier Barnett said.

“Between them, the two companies employed more than 17,000 people and paid $1.5 Billion in Royalties this year.”

The Premier said variations to the agreement with The Pilbara Infrastructure (TPI), and its owner FMG, provided a framework for expanding the company’s Rail and Port Infrastructure to accommodate new Mining Projects.

“Development of the Solomon project Stage 1 and associated infrastructure will require investment of at least $4 Billion.” Premier Barnett said.

“This will generate more than 1,000 construction jobs and up to 1,000 permanent positions, and, with an annual capacity of up to 60 Million tonnes of iron ore, at current prices it will add $300 Million to the State’s Annual Royalty Income.

“Also, as the agreement provides for third party access to TPI’s Rail and Port Facilities, these changes create new opportunities for junior miners in the Pilbara.” Premier Barnett said.