Article by Josh Zimmerman courtesy of The West.
Iron ore’s incredible price run has tipped an additional $1.2 billion into WA Government coffers over the past three months, lifting total royalties to more than $11b and placing the State on track for a record-smashing $4.3b surplus.
The steel-making commodity ended 2020-21 averaging $US149.30 per tonne, more than double the long-run median of $US64. It was also $US15 higher than the $US134.30 pencilled into the Government’s pre-election financial projections statement in March.
At that point, WA was forecast to bank a $3.1b surplus — largely off the back of about $9.8b in iron ore royalties.
But amid continuing supply issues from Brazilian mines and demand driven by a massive Chinese government infrastructure program, iron ore has persistently been above $US160 since January — and has hovered around $US200 since May.
That has turbocharged the steel-making ingredient’s 2020-21 average price, pouring billions of additional dollars into Treasury along the way.
Iron ore is now set to contribute $11b in royalties to the budget bottom line.