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.

Image from WA Mining, YouTube