Mining giant BHP has been accused of underpaying as much as $300 million in iron ore royalties to the West Australian government dating back to 2004.
Underpayments were identified following a “routine” audit and related to BHP’s Singapore marketing hub subsidiary, Treasurer Ben Wyatt said.
“It’s not so much the royalty rate, it’s what can be deducted and therefore paid in terms of the costs to those Singapore marketing hubs,” Mr Wyatt told reporters on Monday.
“(There is) clearly a difference of opinion about back pay, effectively, of royalties or deductions made under the state agreement acts.
“The state has a fairly firm view and we’ll work that through with BHP.”
BHP said the government was questioning a “long-standing and historically accepted deduction of costs” related to iron ore sales.
“The long-standing deduction has been consistently audited and accepted by the Mines Department as part of BHP WA iron ore royalty calculations,” the company said in a statement.
“It is concerning that previously audited and accepted payments to the government are now being revisited.”
WA Nationals leader Mia Davies said the party had long been pushing for a parliamentary inquiry into legacy state agreements made with mining companies.
“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.
“Now we learn the premier is in secret negotiations with BHP.”
Premier Mark McGowan is currently on a work trip in Asia and has not been available to answer questions about the dispute.
Ms Davies said her party raised concerns about offshore marketing hubs during the 2017 state election campaign.
The party also proposed a mining tax, with then-leader Brendon Grylls claiming companies did not return their fair share to the state.
In November, BHP settled a dispute with the Australian Taxation Office over its Singapore marketing hub, paying $529 million and agreeing to change the hub’s ownership structure.
The ATO had initially claimed the company owed $1 billion.