Rio Tinto has announced the 50th anniversary of its first contracted iron ore shipment from the Pilbara, as debate continues around the adequacy of its royalty payments and the legacy for indigenous people in the region.
Rio Tinto has announced the 50th anniversary of its first contracted iron ore shipment from the Pilbara, as debate continues around the adequacy of its royalty payments and the legacy for indigenous people in the region.
The company’s first shipment left the port of Dampier 50 years ago today on the MV Houn Maru, for the Yawata Iron and Steel Company in Japan.
The shipment came after Rio had built the towns of Dampier and Tom Price, along with 300 kilometres of railway plus mine and port infrastructure.
Rio Tinto Iron Ore chief executive Chris Salisbury said the company had invested more than $37 billion growing its Pilbara operations over the past 50 years.
“We now employ 12,000 people who operate our network of mines, rail and ports, and sell our iron ore to customers all around the world,” he said.
However, the company’s contribution has not been enough to satisfy critics like Nationals WA leader Brendon Grylls and some Pilbara indigenous groups.
Mr Grylls’ push for Rio and fellow iron ore miner BHP Billiton to pay an extra $5 per tonne in royalties has come under renewed attack from Chamber of Minerals and Energy of Western Australia chief executive Reg Howard-Smith.
Mr Howard-Smith said Mr Grylls had been misleading the public by failing to explain all the taxes and charges paid by the companies to local, state, and federal governments.
“Mr Grylls’ rhetoric implies BHP Billiton and Rio Tinto only pay a production rental of 25 cents per tonne,” he said.
“The true position is in addition to the usual taxes, charges and levies paid by every business, mining companies pay royalties to the state government, which differ depending on the commodity.
“In the case of iron ore, the royalty paid to the state is 7.5 per cent of the value of each tonne of iron ore.”
As Business News reported last week, the proposed $5 per tonne levy would lift the royalty rate paid by the big two miners to an effective 14.3 per cent.
Mr Howard-Smith said the big miners also spent a substantial amount on exploration and capital to sustain and grow their operations.
He added that, in 2014-15, 90 per cent of the $1.1 billion budgeted for the Royalties for Regions program came from the iron ore sector.
“If Mr Grylls thinks his tax will not affect these two companies’ ability to continue to deliver benefits to all West Australians, then he is kidding himself,” Mr Howard-Smith said.
Meanwhile, the Eastern Guruma people, who hold native title over parts of the Pilbara where Rio operates, have criticised the company’s support for their community.
Three Eastern Guruma elders, speaking as members of Wintawari Guruma Aboriginal Corporation, made a critical statement last month at a function in Tom Price held as part of Rio’s 50-year celebrations.
They explained that Rio has 16 iron ore mines in the Pilbara but does not pay royalties on six of these because they were established before the Commonwealth Native Title Act came into being in 1994.
This includes three mines – Tom Price, Marandoo and Brockman 2 – on Eastern Guruma land.
“Unfortunately, we cannot stand here today and welcome you to country when our people are worse off than when no mining existed,” the elders said in a statement.
“We are not being paid compensation for three Rio Tinto mines operating on our country.
“We are not being employed.
“We are not getting the contracts and business opportunities that the mining industry prides itself on.
“Outcomes for the Eastern Guruma people have been poor.
“As traditional owners, we want to challenge Rio to do the right thing, to adopt a real social licence.”
A Rio spokesperson said the Eastern Guruma people entered into an Indigenous Land Use Agreement with the company in 2002.
"As part of the agreement, the Eastern Guruma people agreed to make no claims for compensation in relation to existing mines at Tom Price, Marandoo and Brockman 2," the spokesperson said.
"In line with our agreement, mining benefit payments have been made for all new mining areas on Eastern Guruma country, including Western Turner Syncline, Nammuldi and Brockman 4.
"This will continue for the life of these operations."
A Wintawari Guruma spokesman told Business News that Rio hosted a community meeting with Eastern Guruma people in Karratha this month, which was encouraging.
He called for a shift in Rio’s approach to indigenous employment and contracting.
“They should give more preference to the native title holders, because that is the community directly affected,” the spokesman said.
He said it was particularly difficult for Eastern Guruma people to obtain work on their country because most had been forced to move to Karratha or Roebourne in the 1960s and 1970s.
The spokesman said there was no fly-in, fly-out from Karratha to the Pilbara mines and Rio generally did not allow workers to drive-in, drive-out from the coast because of OHS concerns.
Ironically, one of the most successful indigenous contractors in the Pilbara over the past decade has been private company Eastern Guruma, which is ranked at number two on the listing of WA indigenous contractors on the the BNiQ search engine.
It is owned by members of the Eastern Guruma native title group, but not the prescribed native title holder.
Wintawari Guruma set up its own contracting arm in 2014 to try and secure a greater share of the commercial opportunities in the Pilbara.
Most of the contracts it has won have been with neighbouring miner Fortescue Metals Group.
The comments from Wintawari Guruma come after Rio hailed the success of its regional Fifo program, which involves more than 1,000 employees flying from communities like Geraldton, Albany and Busselton, to the Pilbara.
Mr Salisbury said one of the highlights of the Geraldton Fifo program was the strong level of Aboriginal employment.
“Aboriginal employees represent 30 per cent of our total Geraldton workforce, which is great for the community and our business,” he said.
