Tough luck: Western Australian government to miners
Poor market conditions won't soften the hearts of Australia's elected officials: West Australian Premier Colin Barnett told the Financial Review that the state will not adjust mining royalties to alleviate price-related suffering.
Mining is a “cyclical industry,” Barnett told the Financial Review and companies shouldn't expect relief.
“I know this is a tough time and some of the high-cost producers struggle,” he said. “At the end of the day the state government owns the minerals and companies pay the equivalent of 10 per cent of the value of the mineral. I think that’s a pretty good price.”
The country’s metal miners have been plagued with weak global pricing and rising production costs but royalty payments will not change; relief may have to come from a weak Australian dollar which approached a three-year low on Friday.
The past few months have been tough for Aussie firms and their employees.
Some of the state’s biggest producers announced big write-downs recently, including up to $5 billion from Newcrest Mining (TSX:NM).
Job losses have also been extreme, with cuts in the coal sector reaching 11,000 recently.
Australian miners may also have a lot to gain or lose in the upcoming elections which will be held on September 7, Prime Minister Kevin Rudd announced on Monday.