#Official Mining Thread

[Wayno]

I think royalties should be at _least_ 10%. Why we have such an absurdly low rate, is beyond me. Lifting these royalties would enable us to gather a much more significant stream of income, and be able to reduce things like Payroll Tax, and whatnot.

lift royalties now and the mining companies will scatter quicker than a politician at question time...

Give it 5years and you'll see the percentage increase.

[Wayno]

More discussion about Royalties...

http://www.abc.net.au/news/stories/2009 ... 656029.htm

Paul Holloway promises royalties review for Roxby mining

The South Australian Government says royalties for mining at the Olympic Dam operation at Roxby Downs will be reviewed when the Indenture Act is re-negotiated ahead of a planned mining expansion.

The Conservation Council and the Greens are arguing that mining royalties of 3.5 per cent are too low to counter the cost of pollution the mine causes.

SA Mining Minister Paul Holloway says the BHP Billiton mine's contribution to the world's nuclear power industry will cut more carbon dioxide than Australia as a whole generates.

"The Greens and others who've always been opposed to this mine, I mean their position really is that they want no royalties nor jobs either because they want to close the mine," he said.

"I think they just sort of use these arguments all the time because they're opposed to the mining generally."

Greens MP Mark Parnell denies ever having called for the Olympic Dam mine to be closed.

He says the Greens' submission to the mine's environmental impact statement does not say there is no future for mining or that the expansion should not go ahead.

"What I've done is pointed to various aspects of this proposal and gone through the science, we've gone through the economics and we've looked at the social impacts and we've made comments and suggestions about how things need to be done," he said.

"Now if that translates to 'We want to close it down' well I just don't understand how the Minister can come to that conclusion."

SA Unions and the state National Party have also been arguing the royalties case, with a push for more mining royalties to benefit regional communities.

[fabricator]

I think royalties should be at _least_ 10%. Why we have such an absurdly low rate, is beyond me. Lifting these royalties would enable us to gather a much more significant stream of income, and be able to reduce things like Payroll Tax, and whatnot.

I agree, 3.5% is a joke really, this explains why with such big mines in SA, there is so little government money to spend on infrastructure. No wonder WA could spend so much money on trains and freeways when they were the same size as Adelaide at one point not so long ago.

[Shuz]

And, personally, I don't see it as a deterrent in paying more royalties. These mining companies would stand to benefit from much better infrastructure as a result. For example, better airport facilities at Roxby Downs for its fly-in fly-out workers, or, duplicating Highway One all the way to Port Augusta, which will help freight movements.

[Strangled Cat]

I think royalties should be at _least_ 10%. Why we have such an absurdly low rate, is beyond me. Lifting these royalties would enable us to gather a much more significant stream of income, and be able to reduce things like Payroll Tax, and whatnot.

I agree, 3.5% is a joke really, this explains why with such big mines in SA, there is so little government money to spend on infrastructure. No wonder WA could spend so much money on trains and freeways when they were the same size as Adelaide at one point not so long ago.

Who knows what the percentage of royalties was for WA? The fact that they have a shit load more mines than we do in SA would account for all their extra money, not because they get a larger percentage.

[frank1]

WA also gets a higher price for there iron ore, mineral sands etc than SA due to the grade or 'quality' of the ore.

[Wayno]

WA also gets a higher price for there iron ore, mineral sands etc than SA due to the grade or 'quality' of the ore.

yes - very true Frank1, and a great point!

Maybe our royalty scheme should be tiered based on mineral grade/quality? That would create a level playing field and encourage mining of lower grade deposits. Interesting thought.

[Wayno]

You've probably seen the news about the $5b Gorgon LNG project in WA. Well i'm watching it from an environmental impact perspective. How the fed govt treats "profit vs environment" for this WA project will provide insight to the prospects of the BHP ODX open cut mine project.

There's two main environmental issues with the Gorgon LNG "Barrow Island" project:
1) there's endangered turtles, wallabies, and other special fauna/flora on the island. They are truly at risk from this project
2) The LNG extraction process risks unleashing massive volumes of CO2 into the atmosphere (resequestration?) as a side-effect of pumping gas to the surface. Remember, CO2 is the stuff the fed govt wants to store underground (sequestrate) to support our dirty coal industry.

If the above risks are deemed acceptable then we can be more assured that BHP ODX will most likely be approved too (even though environmental concerns differ in many ways).

[skyliner]

Sorry for late post - from AFR 19/8/09 - speaking about rapidly increased demand (and prices for) for uranium and pushing for establishment of reactors in Aust. It seems 476 new generation reactors are planned or under construction around the world. Gives ODX a much bigger early likelihood - says around 2010 to start in the article. Again, apologies for not posting in entirety - paper is gone - this done from memory.

As mentioned by many before we need better royalty levels - I suspect the lower levels were tohelp entice development in the first place. We are still placed in a more attractive position to get mining developer's interest (but we don't get the inflow into gov't coffers that QLD and WA get). Bit of a balance here. As Wayno said, we don't want them running away. A gradual change necessary.

BTW welcome back to your thread Wayno.

SA - STATE IN THE MOVE

[skyliner]

You've probably seen the news about the $5b Gorgon LNG project in WA. Well i'm watching it from an environmental impact perspective. How the fed govt treats "profit vs environment" for this WA project will provide insight to the prospects of the BHP ODX open cut mine project.

There's two main environmental issues with the Gorgon LNG "Barrow Island" project:
1) there's endangered turtles, wallabies, and other special fauna/flora on the island. They are truly at risk from this project
2) The LNG extraction process risks unleashing massive volumes of CO2 into the atmosphere (resequestration?) as a side-effect of pumping gas to the surface. Remember, CO2 is the stuff the fed govt wants to store underground (sequestrate) to support our dirty coal industry.

If the above risks are deemed acceptable then we can be more assured that BHP ODX will most likely be approved too (even though environmental concerns differ in many ways).

$50bn mate, not $5bn - massive - WA beside itself with glee.

SA - STATE ON THE MOVE

[frank1]

You've probably seen the news about the $5b Gorgon LNG project in WA. Well i'm watching it from an environmental impact perspective. How the fed govt treats "profit vs environment" for this WA project will provide insight to the prospects of the BHP ODX open cut mine project.

There's two main environmental issues with the Gorgon LNG "Barrow Island" project:
1) there's endangered turtles, wallabies, and other special fauna/flora on the island. They are truly at risk from this project
2) The LNG extraction process risks unleashing massive volumes of CO2 into the atmosphere (resequestration?) as a side-effect of pumping gas to the surface. Remember, CO2 is the stuff the fed govt wants to store underground (sequestrate) to support our dirty coal industry.

If the above risks are deemed acceptable then we can be more assured that BHP ODX will most likely be approved too (even though environmental concerns differ in many ways).

$50bn mate, not $5bn - massive - WA beside itself with glee.

SA - STATE ON THE MOVE

From what i have been reading, the 50b project is commonwealth (federal gov.) owned and WA gets minimal royalties from this project.

[rhino]

From what i have been reading, the 50b project is commonwealth (federal gov.) owned and WA gets minimal royalties from this project.

How can that be? Is it because it's offshore? I would have thought the resource still belongs to WA?

[Wayno]

From what i have been reading, the 50b project is commonwealth (federal gov.) owned and WA gets minimal royalties from this project.

How can that be? Is it because it's offshore? I would have thought the resource still belongs to WA?

I think it's a matter of posturing. The Feds say they made the deal happen (the agreement with China), while the WA govt is claiming they contributed more to organising the deal than the feds are granting.

WA still gets the royalties as returned GST to the state (actually they get about 70%, with the remaining 30% being shared across other states, SA included - so we should get $2-3b per annum thank you very much).

[Howie]

Just wondering Wayno.. what's your take on this?

Santos export deal 'is biggest'
Article from: The Advertiser

CAMERON ENGLAND

August 21, 2009 12:01am

SANTOS says its 20-year deal to supply liquefied natural gas to Malaysian company Petronas is Australia's biggest export trade deal which surpasses a $50 billion Gorgon deal announced earlier this week.

The traditionally conservative Adelaide company's chief executive David Knox yesterday let slip in a conference call that he believed the Petronas deal, signed in June, was the biggest.

"We haven't given a figure," Mr Knox said.

"It's for three million tonnes and it's for 20 years and it's at very strong prices.

"So if people have got more than three million tonnes for 20 years at very strong prices then they've done a bigger deal, but I don't think anybody has.

"I think they're all smaller, and I'm not sure they've done it. It's not a massive competition here, clearly all of these are big deals, so we haven't made a big thing about it, but clearly we've signed one of the largest deals ever."

It was announced on Tuesday night that Gorgon partner ExxonMobil and Chinese energy company PetroChina had inked a deal to supply 2.5 million tonnes of liquefied natural gas a year to PetroChina, for 20 years. T

he deal – to supply gas from the massive Greater Gorgon gas fields off the West Australian coast – was announced by Federal Resources Minister Martin Ferguson in China as Australia's biggest export contract.

Santos expects to start shipping LNG from its multibillion-dollar project, at Gladstone on the Queensland coast, in 2014, if it makes a decision early next year to go ahead with the development.

Santos announced a plan earlier this week to sell 60 per cent of some of its Bonaparte Basin gas fields, off the far-northern WA coast, to French company GDF Suez. These would supply a floating LNG plant, bringing the number of Santos LNG projects to four.

The other three are the Bayu-Undan LNG plant at Darwin, the Santos/Petronas project and the ExxonMobil-led Papua New Guinea LNG project.

[Brando]

Thanks for asking Howie, i was questioning the same thing...Surely it has to be a good thing for SA considering Santos HQ(head office) are still located here in Adelaide. Although no direct employment, you would imagine HQ office/jobs growth with this significant production.