The West Australian government will soon introduce a magnetite royalty rebate in an attempt to boost the state’s developing iron ore industry sector.
Speaking on Tuesday at the opening of Karara Iron Ore Project, WA’s first producing magnetite iron ore mine, WA Premier Colin Barnett announced the rebate, saying it would be implemented on a project-by-project basis.
“This industry has the potential to stimulate new investment and construction activity throughout the State,” the Premier said.
“However, bringing magnetite ore to grades suitable for export is capital and energy intensive, so this royalty rebate will assist in recovering the massive investment required to achieve production.
“This means a rebate of up to 50 per cent of royalties paid will apply for the first 12 months of magnetite production, before returning to the full royalty rate of 5 per cent.”
The Premier also said that Western Australia has significant magnetite resources; an iron ore that is preferred by many Chinese steel mills.
Mr Barnett said the Karara project was a major step forward for the State and for the Mid-West region.
He congratulated Karara Mining Limited partners, Gindalbie Metals and the Anshan Iron and Steel Group Corporation (AnSteel), on their success.
“The State Government has worked closely with the proponents to get this project up and running and I congratulate them on getting to the production stage,” the Premier said.
“Karara is an outstanding example of the positive impact Chinese investment is having in WA.
“It is a significant achievement in terms of Chinese investment and a major example of Chinese confidence in Western Australia.”
Mines and Petroleum Minister Bill Marmion said the $2.57billion Karara project would produce many benefits for local communities, the region and the State over its expected 35-year life.
“In addition to creating important new employment and business opportunities, Karara has made a significant investment in community projects, in Morawa and the Mid-West,” Mr Marmion said.
The Minister said the project employed more than 2,400 people at peak construction and had generated 500 direct permanent jobs.
He said the mine would initially produce eight million tonnes per annum (mtpa) of magnetite, with the potential to expand to 16mtpa or more.
AnSteel’s integrated steelworks at Bayuquan, China will take all the project’s iron products.
Mr Barnett said the Western Australian Government had worked closely with the Karara partners to secure the project, including upgrading the Pinjar to Eneabba electricity transmission line from 132kV to 330kV, and facilitating regulatory approvals.
The Premier said as the Mid-West’s largest iron ore exporter, Karara would also have a role in securing a deep water port for the region at Oakajee.
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