BHP and Rio in royalties hit

RIO Tinto and BHP Billiton, the world’s No.2 and 3 iron ore miners, sealed an agreement to pay Western Australia state a higher royalty on iron ore fines to match the royalty on lump ore, as agreed in May.

In return, the state has agreed to treat the two global miners’ iron ore expansion plans as special projects, which simplifies the approval process.

The state is raising the royalty on iron ore fines from 5.625 per cent to 6.5 per cent from July 2012 and to 7.5 per cent from July 2013, to match the royalty the companies already pay on lump ore.