- Two-year extension for rebate program
Potential to promote further investment
1,500 workers employed directly in magnetite mining and processing operations
Western Australia's magnetite industry will receive a two-year extension of the State Government's royalty rebate program as part of the 2016-17 State Budget.
State Development Minister Bill Marmion said while the program was initially offered as an incentive to a fledgling mining sector, it was now being extended in light of difficult market conditions and the potential of the magnetite industry.
"Technical challenges and the sustained low iron ore price have placed WA's two producing projects under considerable pressure," Mr Marmion said.
"The State Government believes it is in the broader interests of WA that this relatively new industry, which directly employs up to 500 people in the Mid-West and 1,000 people in the Pilbara, continues to receive royalty relief."
Mines and Petroleum Minister Sean L'Estrange said there was much to gain from the development of WA's considerable magnetite resources.
"Magnetite has long-term potential to promote further investment across the State as a premium, value-added product that is preferred by many Chinese steel mills," Mr L'Estrange said.
The extension will be offered to the two mining operations that qualified under the original program which commenced on April 9, 2013 - the Karara and Sino Iron magnetite projects - after the previous rate relief closed on April 8, 2016.
"The extended program will offer similar royalty rebates of up to 50 per cent and is valued at $39.7 million over two years," Treasurer Mike Nahan said.
The Sino Iron project, located 100km south-west of Karratha, started production in December 2013
- The Karara project, located 200km east of Geraldton, started production in April 2013
- The extension of the royalty relief is valued at $17.3 million in 2016-17 and $22.4 million in 2017-18
- The State Government is also providing assistance to Karara via discounted charges at Geraldton Port, with an estimated value of $10.35 million over two years