Premier Colin Barnett says no agreement has been reached with BHP Billiton chief executive Marius Kloppers on the issue of royalties post a proposed Pilbara iron ore merger with Rio Tinto following an hour-and-a-half long meeting today.
Mr Barnett told journalists Mr Kloppers had not made any concessions to demands by the government on full payment of stamp duty and royalties and amendments to the state Act.
The Premier looked set to place hurdles in the way of the proposal when it was announced earlier this month, saying the transaction had been structured to avoid paying $1 billion in stamp duty.
But he appeared to have warmed to the idea after an hour and a half of discussions with BHP Billiton chief executive Marius Kloppers in Perth on Wednesday.
"This is extraordinarily complicated," Mr Barnett said.
"However, I believe they will probably proceed and achieve this production joint venture.
"That will not come into place probably until the second quarter of next year."
Mr Barnett said he and Mr Kloppers had discussed stamp duty and the need to pay more royalties, but no agreement had been reached.
"From the state's point of view, we regard it as effectively change in ownership and in effect, would attract stamp duty.
"In the short term, I guess you could say there may be a windfall in stamp duty.
"Marius heard what I said (and) I think he understood it."
Mr Barnett said the state was set to receive "hundreds of millions of dollars" in stamp duty.
"I also made it clear that the time for royalty concessions on iron ore has passed and we would want to see full royalty rates apply on all iron ore production from this joint venture.
"That may be phased in over two or three years. That's yet to be discussed."
BHP Billiton and Rio Tinto have been operating under royalty concessions negotiated in the 1960s.
Mr Barnett said job losses were expected at the middle management level at the companies' Perth offices, but he had been told there would ultimately be more permanent workers in the Pilbara. Contractor numbers were likely to be reduced.
"I was assured the industry would continue to grow and overall, total jobs would increase in the iron ore industry."
He said 20 agreements with the state, passed through acts of parliament, could be replaced with "one or perhaps several" new state agreements.
"That is itself going to be a demanding, exhausting and complicated task."
