By Rhiannon Hoyle
SYDNEY--Iluka Resources Ltd. (ILU.AU) said it has agreed with
BHP Billiton Ltd. (BHP.AU) and its joint-venture partners to reduce
the royalties it earns from iron ore BHP digs up at one of its
operations in Western Australia.
Perth-based Iluka receives the iron-ore royalty stream from
BHP's so-called Mining Area C operations in the iron-rich Pilbara
region, secured as part of the sale of a joint venture interest in
the early 1990s.
On Tuesday, Iluka said the royalty agreement had been amended to
increase the revenue base on which it is payable, and lower the
royalty rate to 1.232% from 1.25%.
"Since the royalty agreement was entered into in 1994 the basis
upon which iron ore is marketed and sold has changed significantly,
for example with volume sold primarily on a blended basis and
incorporating appropriate freight and insurance adjustments," the
miner said in a regulatory filing. "To reflect this change, an
agreement has been reached for a revised basis for the
determination of the royalty."
Iluka would receive an immediate one-off payment of US$8
million, it said.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
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