Mining giant Mineral Resources to receive $158,000 refund from East Pilbara Shire, impacting remote communities

A multi-billion-dollar mining company is set to collect a $158,000 refund from a remote West Australian council, with residents of the region's isolated communities caught in the middle.

The Shire of East Pilbara is set to refund the money to Chris Ellison's Mineral Resources (MinRes), after the state government overturned a controversial Supreme Court case.

In July last year, the court ruled local councils could claim rates from resources companies mining occupied Crown land.

It prompted outcry from the mining industry, which successfully appealed to the WA state government to overturn the changes.

Local governments that did impose fees on miners were ordered to refund them, backdated to the 2017-18 financial year.

East Pilbara Shire president Anthony Middleton said the outstanding cash would be sourced from the council's road maintenance funds.

"The $158,000 has to come from somewhere, and that's the budget that will come from," he said.

"It will be a reduction in service provision … we have got over 3,000 kilometres of dirt road.

"Where that actually pinpoints to? Not too sure, but no doubt there will be a few unhappy residents and ratepayers out there."

The shire asked MinRes to consider withdrawing its application for the refund, but said the miner declined.

Last week, the company posted a record net profit of $1.2 billion, its strongest financial result in 20 years.

"This repayment is a result of the state government's amendments to the Local Government Act," a MinRes spokesperson said.

Fears of isolation for remote community

Among the unhappy residents are those in the Western Desert community of Kunawarritji, 2,000 kilometres north-east of Perth and home to about 70 people.

Kunawarritji Aboriginal Corporation chief executive Chris Flood said the road in and out of the community had severely deteriorated, hampering the arrival of critical supplies.

The community has been waiting on fuel deliveries for weeks, Mr Flood said, with one company threatening to cancel future deliveries if the road conditions worsen.

He said he was shocked by the shire's decision.

"It's a bit disgusting that the shire has gone that way," Mr Flood said.

Shire says 'punitive' changes to blame

Shire officials described the retrospective nature of the refundable rates as "punitive" in reports filed ahead of its next council meeting.

Mr Middleton said the shire had "no discretion" about refunding MinRes and that most of the money had been put towards road maintenance and grading.

"That's why we claimed for it, because of the mining impact on our roads … that's what it was spent on," he said.

In the council agenda, it was noted that MinRes's legal representatives had taken an "aggressive approach" in pursuing refunds from local councils.

In a separate case, the miner has taken the Shire of Ashburton, another Pilbara council, to the State Administrative Tribunal, challenging four rates rises.

MinRes did not comment on that dispute.

Essential services suffer

Mr Flood said the four Martu communities that dot the East Pilbara were reliant on road transport for essential services like medical care.

"I know we have wet seasons, I know we have issues, but this is just an ongoing problem that hasn't been fixed for some years," he said.

"You have to drive about 10 kilometres an hour, 20 kilometres an hour to go down this road and you get to Punmu and then you're shaking because it's so bad."

The East Pilbara shire said the reallocated funds would not affect $5.6 million awarded in January for cyclone recovery repairs to several priority roads.

Local Government Minister Hannah Beazley has been contacted for comment.