“State Agreements have underpinned the resources base of the State’s economy and are widely recognised as the basis of the State’s success in attracting the majority of the nation’s inward investment in resources development,” said Shanahan.

“CME was pleased that the Auditor General recognised that the vast majority of State Agreements have delivered ongoing projects. These projects contribute around $1 billion to the State’s annual royalties take,” he said.

“In terms of Local Content, the Western Australian resources sector has been widely recognised for its commitment and performance in exceeding Local Content targets with some resources projects achieving Local Content of over 80%.”

The examination by the Auditor General reviewed the extent to which Agreements have achieved their main objectives and the effectiveness of their administration. In its report the Auditor General said that nearly 90% of current Agreements have delivered projects.

However, while the State has had some success in using Agreements to develop further processing industries benefits such as steel mills, pulp mills, aluminium smelters and petrochemical industries, have not yet been realised.

Recommendations made include the development of a strategy, in consultation with industry, to implement the policy to phase out royalty concessions; develop the reporting of Agreement status and performance to Parliament and developing criteria to better guide the use of Agreements in a mature natural resource economy.

CME studies indicate that State Agreement Act companies account for over $4 billion per annum in processed minerals production demonstrating the success of State Agreements in developing further downstream processing.

Shanahan said that CME would closely examine the Auditor General’s findings and emphasise to Government the critical role of State Agreement Acts to the continued economic success of the State.