PERTH (miningweekly.com) – The Western Australian Chamber of Minerals and Energy (CME) has launched a campaign to stop the Western Australian Nationals from implementing a new tax.

Western Australian Nationals leader Brendon Grylls has proposed imposing a A$5/t iron-ore production levy on BHP Billiton and Rio Tinto, to replace the current 25c/t payment.

Both iron-ore majors have rejected the A$7.2-billion levy increase, warning that it would place jobs and competitiveness at risk.

The CME said on Wednesday that a campaign against the proposed tax was necessary, as the risk posed to the iron-ore sector was too significant to ignore.

CME CEO Reg Howard-Smith said the fact-based campaign would counter mistruths put by the Western Australian Nationals in an attempt to justify their job-destroying tax.

“The Western Australian Nationals’ new mining tax will make Western Australia uncompetitive and severely damage Western Australia’s international reputation as a place to do business. The new tax will destroy local jobs and make Australia the world’s highest taxing iron-ore jurisdiction,” Howard-Smith said.

“We are aiming to help Western Australians understand that the new mining tax will cost regional jobs, hamper investment and damage the state’s competitiveness on an international scale.”

He pointed out that the state’s iron-ore royalties were already four times greater than Brazil, which was the state’s main competitor.

“The new tax would make our royalty rate seven times higher than Brazil’s which would be a crippling disadvantage. We would be uncompetitive. Brazil is already increasing its global market share at Western Australia’s expense and the proposed mining tax risks making this worse. There is no doubt this disadvantage would cost Western Australian investment and thousands of direct and indirect jobs.”

Howard-Smith pointed out that between 2004/5 and 2014/15, the state’s iron-ore miners contributed more than A$27-billion in royalties to the Western Australian Budget. This is the same amount spent on Western Australian police over the same period and more than double the amount spent by the state on roads over that time.

He added that the state’s largest two miners pay an average of A$19/t in taxes and royalties, not 25c/t as claimed by the Nationals.

“All Western Australians, directly or indirectly, rely on a healthy resources sector to provide jobs and income to the state. Some companies are planning to be mining iron-ore in the Pilbara for the next 100 years. Their commitment is for the long term, not an election cycle. It is in their interests to invest in the local communities and do the right thing by local families and businesses,” Howard-Smith said.

“It is important for Western Australia that this short-sighted tax does not go ahead as the negative impacts far outweigh any short-term positives that the Nationals might believe exist.”