The buyout offer applies to 439 dust-choked residential dwellings but not to commercial properties in the West End.
It is much less than some home owners had hoped. They had campaigned for the buyout to be based on mining boom prices, which peaked in Port Hedland in about 2012.
The market has plunged since then and iron ore exports have jumped, adding to the dust problems.
It is understood the WA government has decided the funding split but opted not to reveal the details on Friday.
As by far the biggest exporter, BHP is expected to fund the lion’s share of the buyback, which mirrors a similar scheme in WA in which Alcoa paid for the buyback of homes near its Wagerup alumina refinery from 2013.
BHP’s acting boss for WA iron ore, Tim Day, said the company supported the buyback scheme and its “shared responsibility”.
“We recognise our shared responsibility to continue to have positive and progressive discussions on an appropriate funding model for this scheme to ensure it meets the expectations of the community,” he said.
There is already tension between BHP and Fortescue over export capacity at Port Hedland. BHP is targeting a 14 per cent increase in its exports from 290 million tonnes a year to 330 million tonnes and Fortescue has sought permission to expand its capacity by 20 per cent to 210 million tonnes a year.
The buyback scheme will be administered by the government-controlled Pilbara Ports Authority and governed by a board of directors from various government authorities.
The buyback announcement clears one potential hurdle to a big increase in ore exports from Port Hedland over the next decade.
A report backed by BHP, Fortescue, Roy Hill and PAA released on Tuesday forecast the expansion would add $21 billion in royalties and taxes to government coffers over the next decade.
The report, released by the Port Hedland Industries Council whose members are the miners and the PPA, underlined the economic and strategic importance of the town as Australia’s iron ore export hub.
The PHIC welcomed the buyback announcement and said its members had long acknowledged that the West End was developed before modern planning principles.
PHIC chief executive Kirsty Danby said the members would work with all stakeholders to understand the details of the voluntary buyback.
“Industry will continue to consult with the state government to determine a suitable funding arrangement,” she said.
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