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On Monday the state government said it had begun formal public consultation on royalty rates, with Premier and State Development Minister Colin Barnett and Mines and Petroleum Minister Bill Marmion releasing the terms of reference.
Industry representatives and other parties interested in having a say will have until October 31 2013 to consider the paper and make submissions.
Petroleum royalties will not be included in the review.
Barnett said the aim of the review was to ensure the state’s mineral royalties operated fairly and efficiently for the mining industry and Western Australians.
“Royalties are vital to the state’s ability to provide the services and infrastructure West Australians expect,” he said.
“It is important that royalty rates deliver a reasonable return to the community without discouraging production or acting as a disincentive to new investment.”
The mineral royalty rate analysis aims to identify anomalies in the current structure, examine the efficacy of existing policy and consider efficiency implications to any proposed changes in the royalty rates.
The review into royalty rates was first announced in May 2012 and comes almost three decades after the last public review into WA’s royalty system was undertaken.
The 1984-86 inquiry was dubbed the Bradley mineral revenues inquiry.
According to Marmion, royalty rates were designed to deliver a return to the state equivalent to about 10% of the mine-head value of resource.
“For most producers, mineral royalty rates operate on a three-tier system reflecting the degree of processing involved in production,” he said.
The current system also took into account historical considerations such as rates negotiated as part of major project agreements.
Following consideration of submissions, the State Development and Mines and Petroleum departments will prepare an issues paper and undertake detailed consultation.
In 2012, the state pocketed $5.1 billion in mineral and petroleum royalties.
While the Queensland government previously considered changes to mining royalties, New South Wales went a step further by announcing in its 2011-12 state budget that it would increase royalties applied to the extraction of coal.
