BHP, an Anglo-Australian multinational mining company headquartered in Melbourne, has been reportedly accused of underpaying up to $300m in iron ore royalties to the West Australian government.
Apparently, BHP used its Singapore marketing hub subsidiary to buy iron ore at a lower price – thereby paying mush lesser in royalties.
As per a report by The Australian Financial Review, Ben Wyatt, Treasurer, was reportedly quoted stating that underpayments were identified following a routine audit, and through the issue is not concentrated around the royalty rate, it is the amount that can be deducted and consequently paid in terms of the costs to those Singapore marketing hubs. He adds that, clearly, there is a difference of opinion about back pay of royalties & deductions made under the State agreement acts. The state has a firm view about the matter & will work that through with BHP, he affirms.
As per an official statement by BHP, the long-standing deduction has been audited & accepted by the Mines Department as part of BHP Western Australia iron ore royalty calculations. BHP adds that it is indeed a matter of concern that previously audited & accepted payments to the government are now being revisited.
Mia Davies, Leader, National Party of Australia, was quoted stating that the party had long been pushing for a review of state agreements made with mining firms. She adds that it is a matter of concerns that the Premier had been negotiating this in secret.
Seemingly, during the state election, the Nationals WA proposed a mining tax, and the then leader Brendon Grylls claimed that firms did not return their fair share to the state.
Earlier, in November, BHP had also settled a dispute with the Australian Taxation Office (ATO) over its Singapore marketing hub by paying $529 million & agreeing to change the ownership structure of the hub. Reportedly, the Tax Office had claimed that the firm owed $1 billion.