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Inquiry demanded into $300M BHP allegedly owes in taxes

An undated photo of BHP Billiton's Newman iron ore mine. (photo credit: BHP Billiton)

Pressure is mounting for a multinational mining company to face an inquiry into allegations it has not paid millions of dollars in royalties to the Western Australian Government.

The Nationals WA are demanding the McGowan Labor State Government to hold a parliamentary inquiry into legacy state agreements after reports emerged BHP Billiton could owe taxpayers between $200 million and $300m in unpaid royalties dating back to at least the year 2012.

Nationals WA leader and State Member for the Central Wheatbelt Mia Davies said her political party scrutinised BHP in 2017 for using a Singapore-based marketing hub called BHP Marketing AG, which is 100 per cent owned by BHP Billiton.

BHP has allegedly used the hubs since 2004 to artificially undervalue the price of iron ore sold to customers in Japan and China. The lower sale price means cheaper royalties, causing lost tax revenue to the government.

“The issue of mining companies using offshore marketing hubs is not new,” Davies said in a published statement.

If the demand is met, the WA Parliament’s Economics and Industry Standing Committee would be responsible for holding the inquiry.

WA Premier Mark McGowan confirmed the State Government realised there was a royalty shortfall after auditing BHP.

“The State Government identified an underpayment of royalties under various state agreements from BHP over a number of years,” the premier said in a statement to the media. “The State Government is negotiating with BHP to resolve the matter in the best interests of the state.”

However, McGowan is refusing to hold an inquiry.

“This Labor government has blocked the Nationals at every turn in our fight to ensure West Australians receive a fair share for our finite resources,” Davies said.

“The Premier is in secret negotiations with BHP over allegations they have short-changed the people of Western Australia,” she said.

McGowan strongly supports the major resource companies according to Davies.

“The premier’s comments last year that he would ‘not allow anything to get in the way’ of Woodside’s request for a 700-bed FIFO camp in Karratha is just one example,” she said. “The government has a role to maintain a healthy tension between supporting major projects and negotiating good and fair terms … that sometimes means driving a hard bargain.”

Davies rejected media reports suggesting the Nationals do not support the resources industry.

“Labor has chosen to paint the Nationals as anti-mining rather than making sure these agreements, signed more than 50 years ago, still represent a fair deal for the state,” she said.

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