A national mining lobby group says the successful development of a new potash industry in WA is being put at risk by the State Government’s intransigent stance on royalties. It is the first time the Association of Mining and Exploration Companies has publicly weighed into the debate since the Government revealed in this month’s Budget that a 5 per cent royalty rate would apply to the fledgling sulphate of potash industry, sparking outrage from emerging players. AMEC chief executive Warren Pearce said the association’s members had done everything they could to demonstrate to the Government why the industry needed a fair royalty rate, but their efforts had essentially been rejected out of hand. The industry submitted a detailed consultant’s report to the Government in July last year which advocated for a royalty of 1.5 per cent, although the most players have indicated they could accept a rate of 2.5 per cent. The report came after several companies were given different advice from the WA Department of Mines on the likely royalty for potash between 2006 and 2018, which ranged from 73¢ a tonne (the same as for salt) up to 5 per cent. But WA Mines and Petroleum Minister Bill Johnston said the 5 per cent royalty, the same as that charged for all mineral concentrates, had always applied to potash, even though it has never been produced commercially in WA. He said the McGowan Government strongly supported WA’s emerging potash industry and had introduced a range of measures that would save the industry tens of millions of dollars. Mr Johnston pointed to a reduced tenement rental scheme introduced in 2018, a lower contribution to the Mining Rehabilitation Fund and a 50 per cent royalty rebate that applies until December 2024. He also noted the decades-long expected lifespans of potash projects and current prices that were $500 a tonne higher than in 2017. However Mr Pearce argued the government’s reduced tenement rental scheme was flawed because it required players to re-apply for their leases, which would also force them to renegotiate native title agreements, effectively putting them back two years. He also noted only one company, Kalium Lakes, would be able to access the 50 per cent royalty rebate scheme because the rest would not be in production before the offer closed at the end of 2024. “Rather than recognise their mistake and amend the scheme so it delivers the support intended to all the companies, the Government has simply refused,” Mr Pearce said. “We’re left in a position where a new emerging industry is not being offered any real support by government.” Mr Pearce said the government’s policy failures risked billions of dollars in new investment, hundreds of jobs, and millions in royalties back to the State. Despite surging potash prices in recent times because of sanctions against Belarus and Russia, which account for 40 per cent of the world’s supply, investor sentiment towards the nascent WA sector is weak after last year’s collapse of one of the industry’s leading players, Salt Lake Potash, and ongoing commissioning problems for another aspirant Kalium Lakes. The industry is also finding it increasingly difficult to access debt funding for their projects from financiers. WAFarmers has thrown its weight behind the young industry with president John Hassell arguing it would provide a valuable fertiliser for the domestic agricultural industry and emerging players needed a break.