The state government has announced it will impose a five per cent royalty rate on uranium and magnetite iron ore, setting up another fight with Canberra.
The state government has announced it will impose a five per cent royalty rate on uranium and magnetite iron ore, setting up another fight with Canberra.
Mines Minister Norman Moore, who was speaking at a uranium conference in Fremantle today, said the royalties on magnetite would bring in about $60 million in 2011-12.
That is expected to grow to more than $160 million by 2014-15.
Mr Moore said the WA government would consider granting individual, affected companies a temporary exemption from the royalty to allow them time to adjust.
Despite lobbying by junior and mid-tier miners, magnetite iron ore was not exempt under the federal's government Minerals Resource Rent Tax (MMRT).
Although magnetite is deemed lower grade in its raw form, once processed it is highly sought after.
The magnetite industry is still in its infancy, with the Gindalbie Metal's Karara project in WA's mid-west slated to begin production in January next year with exports to follow in June.
The Australian Minerals and Exploration Council expressed disappointment about the new royalty regime.
"AMEC has been consulting with the government on various options for the future treatment of royalty rates as it relates in particular to the magnetite sector," AMEC chief executive Simon Bennison said.
"There is a desperate need to make sure infrastructure is in place as these projects come on stream."
"In spite of this announcement we propose to continue discussions with the government on the future application of royalties on this emerging industry with a view to assisting it come on stream in the most cost effective way as possible, whilst also optimising its long term sustainability."
Mr Moore said the new royalty rate on uranium would bring in about $10 million in 2013-14 and $28 million by 2014-15 into state coffers.
Although there are no uranium mines in operation in WA, there are four mines being planned with one of the leading projects, Toro Energy's proposed Wiluna mine, earmarked for 2013.
Toro Energy managing director Greg Hall said the WA government's plans for a royalty on uranium had been flagged with the sector via its key representative body, the Australian Uranium Association.
Mr Hall said the sector still needed time to assess what the proposal meant for it.
He said Toro's Wiluna uranium project was on track for commissioning in late 2013.
In May, WA government's decision to remove a royalty concession on iron ore fines, a crushed form of the mineral, angered the federal government who threatened to withhold infrastructure funding.