❓ A WA parliamentary question on notice addresses iron ore price forecasts and royalty calculations. The response clarifies the discrepancies between reported price increases and the basis for royalty estimates, attributing differences to currency exchange rates and differing data sources.
AnsweredQoN 6430Legislative Council
QuestionView source ↗
(2) What information is the Department relying upon for its forecast price falls for iron ore in 2010-11 and 2011-12?
(3) Why do the figures provided by the Minister show a price rise for iron ore of some 28.8 percent in 2008-09, when the Budget papers state that budget estimate’s for royalty are based on a 67 percent price increase in the forthcoming year?
(3) Why do the figures provided by the Minister show a price rise for iron ore of some 28.8 percent in 2008-09, when the Budget papers state that budget estimate’s for royalty are based on a 67 percent price increase in the forthcoming year?
AnswerView source ↗
Answered
25 June 2008
Responded by
Leader of the House representing the Minister for Resources
Response time
20 days
The Minister for Resources has been provided with the following response
(1) The production forecasts are provided by individual producers on a commercial in confidence basis and on the understanding that they will only be used by the Department to prepare royalty revenue forecasts.
(2) The iron ore price forecasts are provided to the Department by the Department of Treasury and Finance. The 2008-09 Budget Paper No. 3 states that the decline by 25% in the 2011-12 Japanese fiscal year is due to global supply increases. This decline impacts on royalty collections for the 2010-11 and 2011-12 financial years.
(3) The 28.8% increase has been calculated by dividing the Australian dollar value by the quantity and this approach provides the increase in the average iron ore sales price in Australian dollars. Because the 67% iron ore price increase is based on the contracted iron ore price in US dollars, it excludes the significant adverse impact of the assumed higher exchange rate for 2008-09.
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(1) The production forecasts are provided by individual producers on a commercial in confidence basis and on the understanding that they will only be used by the Department to prepare royalty revenue forecasts.
(2) The iron ore price forecasts are provided to the Department by the Department of Treasury and Finance. The 2008-09 Budget Paper No. 3 states that the decline by 25% in the 2011-12 Japanese fiscal year is due to global supply increases. This decline impacts on royalty collections for the 2010-11 and 2011-12 financial years.
(3) The 28.8% increase has been calculated by dividing the Australian dollar value by the quantity and this approach provides the increase in the average iron ore sales price in Australian dollars. Because the 67% iron ore price increase is based on the contracted iron ore price in US dollars, it excludes the significant adverse impact of the assumed higher exchange rate for 2008-09.
Notice: This document is created or edited using unregistered or evaluation copy of rtLib valid for testing or development purposes only. To use it for productive or any other purposes please register it. You may purchase the license on
http://www.rtlib.com
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