WA mining royalties

[isuzurover]

So. Does anyone have any solid data on total mining royalty revenue received by the wa govt? I have a mate who is arguing royalties are per tonne so are not linked to price decreases.

[Distortion]

You will likely find what you want here


www.treasury.wa.gov.au/cms/uploadedFiles/State_Budget/Budget_2013_14/bp3.pdf

I believe an update to this is due in the next few weeks and from the sound of it both the state and federal ones are going to be pretty grim which should not be a surprise to anyone reading about whats going on

The following is an article discussing the issue
WA Budget an iron ore comedy act | | MacroBusiness (http://www.macrobusiness.com.au/2014/06/falling-iron-ore-to-smash-wa-budget/)

[EastFreo]

Best place to go it to Department of Mines and Petroleum - Home (http://www.dmp.wa.gov.au) and look at the royalties section. There are differences across commodity groups. Also what is really worth a look at is the "statistics digest" which has breakdowns of all groups of exports, royalty receipts etc. one way or another though it is all linked to price in one way or another.

[isuzurover]

Best place to go it to Department of Mines and Petroleum - Home (http://www.dmp.wa.gov.au) and look at the royalties section. There are differences across commodity groups. Also what is really worth a look at is the "statistics digest" which has breakdowns of all groups of exports, royalty receipts etc. one way or another though it is all linked to price in one way or another.

That is the site my mate is using to argue they are per tonne!

[EastFreo]

There are two types. One is rate per tonne for some low value items and I think this includes things like gravel. The other is "ad valorem" and this is based on value. Most commodities fall into the second one. I will do some searching to double check.

[EastFreo]

Just checked and found this http://www.dsd.wa.gov.au/documents/000421.rebecca.white.pdf

You can see the only things with the specific rate are limestone, talc etc. these items are such a microscopic item it would cost more to administer I reckon to do a proper royalty plus probably force a heap of red tap on a number of small businesses.

[Distortion]

Pretty sure it's the second one.

If you read page 105 onwards in the PDF I linked the gov spells out the impact from falling iron ore price and they expect reduced royalties per tone to be made up by the increase in volume of shipped ore

Unfortunately IO price has fallen faster and more substantially than the volume increases can make up leaving the budget well short.

[JDNSW]

I think the confusion (tonne or $) is simply because for most commodities the royalty is expressed as a % - but in fact the miner does not give the state the actual mineral, but sells the state's minerals along with their own.

In each case there will be an agreement with the miner as to what costs are deducted, but normally these will not include mining costs. Low value minerals whose value depends very much on where they are often, as stated, have a $ royalty imposed.

John