❓ Opposition questions the Premier's decision to provide royalty relief and waive termination payments to Cliffs and Mineral Resources regarding the Koolyanobbing iron ore mine. The Premier defends the decision as a job-saving measure that ultimately benefits the state financially.
AnsweredQoN 699Legislative Assembly
QuestionView source ↗
CLEVELAND–CLIFFS
AND MINERAL RESOURCES — KOOLYANOBBING
699. Mr W.R. MARMION to the Premier:
(1) Why did the
Premier give a $55 million golden handshake to American company Cliffs Asia
Pacific Iron Ore Holdings Pty Ltd in the form of $5 million in royalty relief
and allow it to avoid a $50 million termination payment for breaking its
contract?
(2) Will the
Premier outline to this house the basis of exempting Mineral Resources Ltd of
$120 million of royalties, regardless of the iron ore price and business
profit?
AND MINERAL RESOURCES — KOOLYANOBBING
699. Mr W.R. MARMION to the Premier:
(1) Why did the
Premier give a $55 million golden handshake to American company Cliffs Asia
Pacific Iron Ore Holdings Pty Ltd in the form of $5 million in royalty relief
and allow it to avoid a $50 million termination payment for breaking its
contract?
(2) Will the
Premier outline to this house the basis of exempting Mineral Resources Ltd of
$120 million of royalties, regardless of the iron ore price and business
profit?
AnswerView source ↗
(1)–(2) The member is asking whether we support Western Australian
jobs or not. It is interesting. It appears that the Liberal Party does not
support jobs in the south eastern part of Western Australia. I am interested in
the National Party's view.
Does it support what the government has done? Member for Rowe, do you support
it?
We have successfully negotiated an
outcome that ensures that that mining operation goes on for at least five or
six years and that 400 jobs, or thereabouts, are preserved, at the port, in the
mining operations and in the transport and rail operations surrounding that
particular operation. At the end of the day, it has cost the government less
than it would have cost had the operation closed. Therefore, all the advice
that I received—I queried this at length—was that it was a better
option for the state's finances to continue with the operation rather
than allow it to close.
Just so the member understands,
because I do not think he got it at the conclusion of his question: had the
operation closed, we would not be collecting any royalties. Just so he knows,
that iron ore would remain in the ground in perpetuity. We would never get
another royalty out of it had that operation closed. By keeping it open and
giving up the royalty, which we have, we continue to allow those jobs to occur,
and those jobs do continue. Under the worst case ''do nothing''
scenario, the Southern Ports Authority would have foregone revenue totalling
$117 million following Cliffs' closure, resulting in a $96.7 million
increase in net debt. At both levels—the port and in royalties—had
we allowed the operation to close, we would have been financially worse off
than by negotiating the outcome that we did. I must say that it took a lot of
effort. I would like to thank those public servants who negotiated with Mineral
Resources, Cliffs and the like to secure this outcome because it was not easy
to get to this point.
Basically, the upshot of it all is
that the taxpayers are financially better off and we keep around 400 jobs.
Members would have to be stupid not to support that option.
jobs or not. It is interesting. It appears that the Liberal Party does not
support jobs in the south eastern part of Western Australia. I am interested in
the National Party's view.
Does it support what the government has done? Member for Rowe, do you support
it?
We have successfully negotiated an
outcome that ensures that that mining operation goes on for at least five or
six years and that 400 jobs, or thereabouts, are preserved, at the port, in the
mining operations and in the transport and rail operations surrounding that
particular operation. At the end of the day, it has cost the government less
than it would have cost had the operation closed. Therefore, all the advice
that I received—I queried this at length—was that it was a better
option for the state's finances to continue with the operation rather
than allow it to close.
Just so the member understands,
because I do not think he got it at the conclusion of his question: had the
operation closed, we would not be collecting any royalties. Just so he knows,
that iron ore would remain in the ground in perpetuity. We would never get
another royalty out of it had that operation closed. By keeping it open and
giving up the royalty, which we have, we continue to allow those jobs to occur,
and those jobs do continue. Under the worst case ''do nothing''
scenario, the Southern Ports Authority would have foregone revenue totalling
$117 million following Cliffs' closure, resulting in a $96.7 million
increase in net debt. At both levels—the port and in royalties—had
we allowed the operation to close, we would have been financially worse off
than by negotiating the outcome that we did. I must say that it took a lot of
effort. I would like to thank those public servants who negotiated with Mineral
Resources, Cliffs and the like to secure this outcome because it was not easy
to get to this point.
Basically, the upshot of it all is
that the taxpayers are financially better off and we keep around 400 jobs.
Members would have to be stupid not to support that option.
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