It has been revealed that corporate mining giant BHP used a simple accounting trick to avoid paying iron ore royalties to the Western Australian government for over a decade. Last year, BHP took in a profit of $9.5 billion in iron ore from WA.
BHP, the worldβs second biggest mining company, used a front company in Singapore in the avoidance scheme.Β Iron ore exported from WA was bought by BHPβs Singaporean office at a low price and on-sold to China at a huge mark-up.
WA Laborβs state treasurer Ben Wyatt told reporters on January 21 that the underpayments stretch back as far as 2004.Β He said the amount owing is between $200-$300 million.
However, Premier Mark McGowan has offered BHP a discount on the amount owing, saying his government is βnegotiating with BHP to resolve the matterβ.
The West Australian that McGowan had been keen to reach a settlement with BHP before the story broke.
βBHPβs rorting is a major embarrassment to the WA government,β Fremantle city councillor Sam Wainwright told ΒιΆΉΣ³» Weekly.Β βThe premier wanted to settle the matter quietly and that would have been a disaster for the state.β
βHow many more of these mining giants are getting away with rorting the system,β Wainwright asked?
βBHP knows exactly how to wring concessions out of Australian authorities,β Wainwright added.Β βJust last year, BHP settled a similar dispute with the Australian Taxation Office over its Singapore marketing front.Β They owed the Tax Office $1 billion, but managed to whittle that down by about half.β
βFor those not in the purple circle of corporate mates, there is the federal governmentβs robo-debt recovery unit and at the state level the constant cutting of services.Β No poor person gets the chance to negotiate a debt down by 50%,β Wainwright concluded.