Many more mutterings are being heard in the
west about the cosy relationship Rio Tinto enjoys with the state government in
general and Premier Alan Carpenter in particular. Tossing Cazaly Resources off
the Shovelanna iron ore deposit – and delaying a mine there for decades more –
is just the latest in a string of favourable decisions going Rio’s way.

While Minister-in-Hiding Bowler is taking
all the flak for the Cazaly deal, it’s been suggested to me that it’s really
Carpenter who’s wielding the hammer on Rio’s behalf and Bowler has just been
following orders. Maybe Bowler’s refusal to even try to justify the Shovelanna
deal is because he can’t imagine how to either.

For Rio, it’s three strikes in a row with WA Inc – and that’s “strikes” as
in prospecting, not as in baseball.

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Last July,
it was the then State Development Minister Carpenter explaining how it was
really a good deal for WA that Rio was keeping a 3.75 per cent concessional
royalty rate for its existing iron ore mines and three proposed developments,
after which it would start paying the usual 5.65 per cent.

reported: “(Rio iron ore chief) Mr Walsh said that in agreeing to a compromise in which the lower royalty
rates were phased out rather than scrapped, Mr Carpenter had acknowledged Rio’s
huge investment made in the Pilbara and its support of local communities.”

Five months later, Rio nailed a royalties reduction with Carpenter on Argyle diamonds and the
scrapping of requirements that the company process diamonds in WA. The reduced
royalties – down from 7.5 per cent to 5 per cent – and dropping the value-add
bit came from Rio umming and ahhing over whether it would take Argyle
underground as the open pit phase comes to an end.

“The miner says state government
concessions on royalties were pivotal in convincing it to go ahead with the
development of an underground mine at Argyle,” reported AAP.

And four months after that deal, Rio now has Shovelanna back under its control, lying idle. And it was Premier
Carpenter who first signalled it could happen. This time it’s just “in the public interest”.

Building close relationships with local
government leaders can indeed be a rewarding thing.

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Peter Fray
Peter Fray
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