Mining company to get $200 million in royalties after state government deal
The Mines and Petroleum Minister is defending a deal struck with a mining company which will see over $200 million paid-out to it by the state government.
The Koolyanobbing mine was originally owned by Cliffs which was planning to close it because of low prices.
Mineral Resources took over the iron ore mine in June 2018 and due to a five-year holiday clause in its deal, it hasn’t had to pay royalties.
However with soaring iron ore prices, the company is now owed around $218 million.
Bill Johnston told 6PR’s Liam Bartlett the mine was not successful at the time it was bought.
“If we had not provided the incentive package the mine would have shut,” he said.
“We made an important decision that was in the interest of all West Australians.
“I tell you whose interest it was most, is the 1100 workers in Kalgoorlie and Esperance who kept their jobs who would have otherwise lost their job.”
He added that the state government would’ve been out of pocket if the mine wasn’t bought.
“We took control of the facility that had been paid for by Cliffs so that we could use it as common user infrastructure,” he said.
“Potentially hundreds of millions of dollars of rehabilitation costs that the government would have to pick up if we hadn’t got someone else to operate the mine.”
Click play to hear the full interview.
(Photo: Getty Images.)