Lynas Rare Earths water deal sees City of Kalgoorlie-Boulder pocket “as much as” $5m a year, minister says

The City of Kalgoorlie-Boulder is pocketing up to $5 million a year in its 30-year water deal with Lynas Rare Earths, Water Minister Simone McGurk has revealed. While she confirmed the exact figure was commercial-in-confidence, Ms McGurk revealed the estimated figure during a trip to the city on Wednesday where she announced a $5m election promise to support stage one of the city’s Water Bank Project. She said the estimations were it “could be as much as $5m a year” the city is pocketing from its contract to supply 1.7 gigalitres a year of recycled water to Lynas’ $800m processing facility. “The advice that we’re getting is that they perhaps have secured around $5m a year from their agreement with Lynas,” she said. “We’re not exactly sure of those figures, that’s commercial-in-confidence, but it’s a 30-year deal. “The city . . . has the money now to start to give back to the community and make sure they can meet their obligations.” Ms McGurk said she had called on the city to use some of those proceeds for its $90m Water Bank Project. In a sit-down meeting with local media last month, city chief executive Andrew Brien confirmed the money from the Lynas deal was allocated for infrastructure spending such as the Water Bank Project. During that same meeting Kalgoorlie-Boulder mayor Glenn Wilson revealed for the first time the Lynas contract was for a period of 30 years. The City of Kalgoorlie-Boulder on Wednesday said in regards to commercial agreements, it must comply with confidentiality clauses and could not comment on specific contract details. However, it confirmed the fees charged under such agreements were structured to reflect the cost of supplying recycled water. The city said in the case of the agreement with Lynas, the contractual terms ensured fees were payable regardless of usage. It said since the agreement was signed in 2021, Lynas had continued to meet its financial obligations under the contract, despite not yet accessing its allocated recycled water. “Once the probity review has been completed a report will be provided to council,” the city said. “At that time, council will be in a position to provide an update to the community.” On Wednesday, Ms McGurk also responded to questions from the Kalgoorlie Miner about whether she agreed the community deserved “transparency and answers” regarding the city’s contract with Lynas, as suggested the week prior by the Nationals WA. Kalgoorlie candidate Tony Herron called for the State to launch a “full inquiry” into the city’s decision to enter into the contract after the State announced it would provide $261,000 to save the Kalgoorlie-Boulder Racing Club season while negotiations over water contracts continued with the city. Ms McGurk said the Nationals had not put the request for an inquiry to her directly. “The Economic Regulation Authority does have oversight over the city’s licensing and legal obligations in regard to that agreement,” she said. “I understand that there’s an inquiry that’s taken place internally within the City about . . . how that decision was underpinned, and what the implications of that decision are. “We’re being cautious from a State Government point of view, because it’s reasonable that State taxpayers don’t necessarily step in when local government have made poor decisions.” A report from the city’s probity report looking at how it was positioned to enter into the Lynas contract is expected this month. The city in December revealed it had to amend the budget for the report from $35,000 to $78,000, with Mr Brien stating it was “a lot bigger” than initially expected, with almost twice as many documents to go through. Mayor Glenn Wilson said the City must comply with confidentiality clauses and could not comment on specific contract details. However, he confirmed the fees charged under such agreements were structured to reflect the cost of supplying recycled water. “In the case of the agreement with Lynas, the contractual terms ensure that fees are payable regardless of usage,” he said. “Since the agreement was signed in 2021, Lynas has continued to meet its financial obligations under the contract, despite not yet accessing its allocated recycled water. “Once the Probity Review has been completed a report will be provided to Council. At that time, Council will be in a position to provide an update to the community. “The City’s focus remains on securing long-term, sustainable water solutions for Kalgoorlie-Boulder, and we’ll keep working with all levels of government and stakeholders to make that happen.”