Western Australian Premier, Colin Barnett, has threatened BHP Billiton Limited (ASX:BHP) will not be able to expand its iron ore operations unless the global miner agrees with the state government’s royalties proposal.
Mr Barnett has told The Australian Financial Review that the state owns the iron ore and that BHP’s chief Marius Kloppers has no choice but to accept the plan to raise mining royalties.
Western Australia’s state budget, announced in May, proposes to increase the royalty on iron ore from $10 to $13 per tonne.
The AFR says that BHP has declined to comment on the ultimatum other than to say it is in discussions with the state government on the proposed royalty increase.
In the 2011 financial year BHP Billiton reported a net profit of $22.3 billion.
