(Adds dropped character to currency conversion in paragraph 2)
SYDNEY Oct 4 Mining giants Rio Tinto
and BHP Billiton on Tuesday rebuffed
proposals to replace one of the taxes they must pay on their
iron ore businesses in the state of Western Australia with
annual upfront payments.
Both companies mine most of their iron ore in the state,
which is forecast to post a A$3.9 billion ($3 billion) budget
deficit this year.
The steelmaking raw ingredient is Australia's biggest export
earner, although the industry has been hit hard as the economy
slows in top consumer China.
West Australian state Premier Colin Barnett said he had held
discussions with the two miners about scrapping a A$0.25 cents
per tonne levy in favour of yearly upfront payments of an
undisclosed sum, but would not act without their consent.
"We are looking at that 25 cent fee because it is an
anomaly," Barnett told reporters in Perth. The discussions
follow repeated calls by some politicians to lift the levy
twenty-fold to A$5 per tonne.
Such steps would not affect another 7.5 percent iron ore
revenue tax the companies must pay.
A Rio Tinto spokesman said the firm would not take up the
"Since 2006 the company has paid A$13 billion in royalties
to the Western Australia government," the spokesman said.
BHP would not accept the offer either, said a spokeswoman.
BHP last month said a proposed $5 per tonne tax on iron ore
could threaten future investment decisions in Western Australia,
where it expects to mine up to 275 million tonnes of iron ore
($1 = 1.3048 Australian dollars)
(Reporting by James Regan; Editing by Joseph Radford)