NEWS - Resources & Energy
Barnett warns BHP, Rio on iron ore JV
West Australian Premier Colin Barnett has warned mining giants BHP Billiton Ltd and Rio Tinto Ltd that he could block the proposed iron ore joint venture if the two companies refuse to pay higher royalties, according to media reports.
Mr Barnett said the WA government could effectively block the deal because BHP and Rio would require new legislation at a state level to join their operations.
"Don't assume that I as Premier am going to drop the government's entire legislative program to facilitate BHP and Rio's corporate plans," Mr Barnett said, according to media reports.
"That was one of the messages I gave to both BHP and Rio," he said.
Mr Barnett met with BHP chief executive Marius Kloppers and Rio Tinto chief executive Tom Albanese on Tuesday night, telling the pair in a "robust" exchange that the royalties agreement from the 1960s that delivered the miners concessions to recognise their investment in the Pilbara was outdated.
According to The Australian the WA Premier said Mr Kloppers and Mr Albanese "drew breath" when he said the 3.75 per cent royalty rate should be increased, but made no concessions.
Mr Barnett added that their position was not surprising, as BHP and Rio are unlikely to give any ground before the joint venture wins approval from international regulators. The miners are also trying to sway international customers, after the latest concerns raised by Nippon Steel chairman Akio Mimura, who said Australian companies and governments should aspire to maintaining the rules of free trade, or else risk a deterioration in trade relations.
But the WA Premier has backed away from his previous stance that the agreement between the miners required them to pay stamp duty.
Mr Barnett has shifted to saying it's only his desire that they pay stamp duty.
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