The world’s biggest mining companies producing iron ore from Australia aren’t paying their fair share in taxes, according to a lawmaker who wants a 20-fold raise in a state levy that’s been unchanged since the 1960s and the era of imperial pounds, shillings and pence.
The proposal has “overwhelming” support and Rio Tinto Group and BHP Billiton Ltd.’s objections don’t stack up, according to Brendon Grylls, Western Australia’s Nationals party leader. Grylls, a farmer and one-time baker turned politician, is championing the drive to raise the lease rental payment, levied on ore from the two companies, to A$5 a metric ton ($3.68) from 25 Australian cents.
“It is quite clear to me that Western Australia is not receiving a fair recompense for making our iron ore available,” Grylls said in an interview from his office in West Perth on Tuesday. “It was 2 and 6 converted to 25 cents when decimalization came in.”
Western Australia is home to the world’s largest iron ore mining hub, with cargoes from the Pilbara feeding Asia’s mills. The plan by Grylls’s Nationals, a junior partner in the state’s ruling coalition, has met with opposition from Rio and BHP, who say it will cost jobs, jeopardize investment, and place them at a disadvantage to rivals.
The fate of the plan may be decided in March when elections are held, and Grylls is betting his partners, the larger Liberal party, will need his support to form a government and he can push the rise through. The proposal was supported by 45 percent of voters, The West Australian reported in September, based on a poll of 1,700 people.
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