BHP’s $34bn mid-pandemic economic contribution
Mining giant BHP has revealed how much more it paid in local government royalties and taxes, delivering a mid-pandemic economic boost.
BHP contributed an extra billion dollars in local government taxes, royalties and other payments in the past financial year as the mining giant rode the global surge in iron ore prices.
Total Australian economic contributions totalled $34.1bn for the 12 months to June 30, up 3 per cent from $33.1bn last year.
The mid-pandemic contribution was boosted by a $1.3bn increase in taxes, royalties and other direct payments to governments of $12.4bn. It also included $11.1bn of spending with suppliers, $6bn in dividends and interest, $4.5bn in employee wages and $100m in community investment projects, according to BHP.
Over the past decade, BHP has paid $80.3bn in taxes, royalties and other payments to Australian governments. Royalties are paid for the right to extract resources which are owned by the state.
BHP last year settled a long-running dispute with the Australian Tax Office on profits made by its Singapore marketing hub. In recent years it has paid $250m to the Western Australian government following a dispute over iron ore royalties.
BHP Minerals Australia president Edgar Basto said the past 18 months had thrown “unprecedented challenges” at all Australians.
“We know many in the community are doing it tough,” Mr Basto said. “It is through the commitment of our people, and the support of governments, communities, suppliers and traditional owners, that we have been able to keep operating safely through the pandemic.
“We are grateful for their support and the contribution that our continued operation has been able to make to the broader Australian economy during this time.”
Mr Basto said BHP would “keep playing our part” in supporting regional communities and the national economy through jobs, skills, supplier opportunities and social investments.
More details of the contribution will be released in a report in mid-September alongside the company’s annual and sustainability reports. More broadly, BHP paid $3.2bn in taxes and royalties to the West Australian government following a surge in the iron ore price over the past year.
This was up sharply from the Australian dollar equivalent of $2.39bn a year ago.
Elsewhere BHP paid Queensland $514m and NSW about $104m. Other payments to the federal and other state governments came in at $444m.
The operator of South Australia’s largest mining operation, BHP paid $136m to the South Australian government in the 2021 financial year, up from $110m in the previous year.
It included about $102m in royalties, an increase from the $77m paid last year, from the Olympic Dam mine in the state’s far north.
The gain in royalties was expected after the copper, gold and uranium mine increased annual copper production by 20 per cent to 205,000 ounces and gold output to a record 146,000 ounces – the best production results since BHP bought the asset in 2005.
The results were attributed to a $130m smelter upgrade over five years.
Employing about 7,788 staff and contractors in SA, BHP said it also engaged with 265 direct suppliers during the period with total spend of $1bn.
BHP Olympic Dam Asset President Jennifer Purdie, who was appointed to the role in February said the government payments helped fund hospitals, schools and other services for the community.
“The Upper Spencer Gulf and Roxby Downs are so important to us with so many of our people and suppliers living in these communities,” she said.
“It is through the commitment of our people and the South Australian community that we have been able to keep operating safely through the pandemic.
“We will keep working hard to create opportunities for local suppliers and Indigenous businesses and deliver for the South Australian economy.”
A new $500m smelter maintenance campaign due to start by December will see copper production levels fall to 140,000-170,000 tonnes during the current financial year.
The project aims to improve the integrity of critical plant and infrastructure to deliver safe and reliable production performance and productivity improvements.
A $1.8m services contract has been awarded to Zancott Knight, who will conduct site refuelling services.
The owners of Zancott Knight and subcontractor WB Enterprises have connections to the Arabana and Kokatha peoples, the two traditional owner groups Olympic Dam partners with in the region.
Zancott Knight managing director Cameron Buzzacott said it was a “foot in the door” for something he had wanted for a long time.
“It’s great to be working back on country, creating employment opportunities, and working in collaboration with our neighbouring traditional owners,” Mr Buzzacott said.
“I know how important it is to create employment opportunities for our people on country.
“Due to this partnership with BHP we have been able to increase our workforce by adding 10-12 additional positions.”