- Geraldton Port's remaining PEP debt will be repaid by the State Government
Port users absolved of $2.56/tonne PEP charge from July 1, 2016
Magnetite producer Karara Mining Ltd to be granted port charge relief
Transport Minister Dean Nalder today announced that as part of the 2016-17 State Budget, Geraldton Port's remaining $67 million Port Enhancement Project (PEP) debt will be repaid in full by the State Government with the $2.56/tonne PEP charge to be removed from July 1, 2016.
Mr Nalder said the PEP had been a great success and iron ore projects supported by Geraldton Port had created jobs and provided support for regional businesses.
"Since the PEP began in 2002-03, more than 80 million tonnes of iron ore has been shipped through Geraldton Port. The economic activity these mining developments have generated has repaid many times over the cost of the Government's investment in the project," he said.
The Government's decision to repay the debt and remove the charge reflects the direct and indirect financial benefits to Government and the economy from the trade facilitation success of this project.
The changes will also include a restructure of Mid West Ports Authority's (MWPA) existing standard port charges to ensure the port adequately recovers its costs and provides a reasonable return on its assets.
"In restructuring the standard port charges, we have ensured all port customers will be paying lower rates in the 2016-17 financial year than they would have if the PEP charge continued," Treasurer Mike Nahan said.
"The decision delivers benefits to port users and supplements the ongoing economic gains that the Mid-West region will continue to enjoy for many years to come."
State Development Minister Bill Marmion said the Government would also support the State's fledgling magnetite industry by discounting the port charges payable by producer Karara Mining Ltd for the next two years.
"The magnetite industry has been under considerable pressure due to the sustained low iron ore price, and so the Government is providing short-term help to the Karara project which employs 450 people," Mr Marmion said.
The value of this discount is $0.72/tonne in 2016-17 and $0.66/tonne in 2017-18, with a total estimated value of $10.35 million. The Government will pay a rebate to MWPA in order to fund the discount.
- The Geraldton PEP was delivered during 2002-03 at a total cost of $106 million. The project resulted in a more efficient port and helped open the Mid-West iron ore province and create a flexible, more efficient grain sector
- From July 1, 2016 to June 30, 2019, it is forecast that Geraldton Port charges will generate $62 million less from port users than previously budgeted as a result of removing the PEP charge and the restructuring of remaining standard port charges
- The State Government has also extended its royalty relief program for magnetite producers, at a cost of $39.7 million over the next two years