Western Australia Premier Colin Barnett has come under criticism from the opposition for accepting the one off payment of $350 million from iron ore companies BHP Billiton and Rio Tinto. The state government had announced the deal with the companies earlier this week.
The joint venture of the companies planned in Pilbara was to go ahead as they would pay a lump sum to build a new children’s hospital in Perth. Opposition MP Mark McGowan mentioned that the agreement sends a bad message to the international business community.
According to Mark McGowan this sort of thing was to be expected from Venezuela or African dictatorships. This was not acceptable in Western Australia and the government also had to explain just how the three parties involved reached the figure of $350 million.
Under the agreement with the government, BHP and Rio's concessionary royalty rates were increased from 3.75 per cent to 5.6 per cent. This is in line with other mining companies.