Qld pursues BHP for $288M in royalties, interest

THE Queensland government will be taking on BHP Billiton in the Supreme Court over $186 million in coal royalties and $102 million in interest that it claims the mining giant owes the state after using its Singapore office to dodge the payments.
Qld pursues BHP for $288M in royalties, interest Qld pursues BHP for $288M in royalties, interest Qld pursues BHP for $288M in royalties, interest Qld pursues BHP for $288M in royalties, interest Qld pursues BHP for $288M in royalties, interest

Port of Hay Point, Queensland.

Lou Caruana

BHP Billiton confirmed the dispute primarily relates to the proper basis for calculating the value of coal for royalty purposes under Queensland law.

BHP Billiton calculates its royalties based on the product’s first sale, which is to BHP Billiton Marketing AG (BMAG) based in Singapore, the company’s principal marketing entity; while the Queensland Office of State Revenue (OSR) contends that royalties should be calculated by reference to the price at which BMAG sells to its customers.

BHP Billiton has lodged an application with the Court over the disputed royalty reassessments issued by the OSR for the period from 1 July 2005 through 31 December 2012.

BHP Billiton paid approximately $A2.4 billion in royalties to the Queensland government for its share in the BHP Billiton Mitsubishi Alliance joint venture during this period, the company said.

BHP Billiton head of group tax Jane Michie said the company believes that the value of all BHP Billiton’s coal exports from Queensland has been properly calculated.

“This dispute relates to the application of Queensland royalty laws to our value chain. BHP Billiton has initiated Court proceedings to appeal the reassessments,” Michie said.

“We believe the OSR is seeking to reassess royalty amounts based on retrospective laws as well as levy interest in excess of market rates on the disputed amounts.

“BHP Billiton is committed to its marketing model. BMAG plays an important role in our value chain from exploration to end customer. This includes developing the company-wide view of markets, guiding potential future growth products, developing strong integrated relationships with our customers and ultimately selling our products for the best price.

“BHP Billiton’s domestic production entities obtain significant benefits from BMAG’s value adding role.”

Most read Archive

topics

loader

Most read Archive