Govt lights fuse to investment
THE strong arm of the three big mining companies BHP, Rio Tinto and Xstrata has won the resource tax arm wrestle with the Australian Government, reigniting investments in Gladstone.
The renamed Minerals Resource Rent Tax (MRRT) will apply only to iron ore and coal in Australia, and will be capped at 30 per cent rather than the original 40 per cent proposed.
Other commodities will not be included, which reduces the number of affected companies from 2500 to around 320.
Mick Davis, Xstrata chief executive told The Observer yesterday that Xstrata would be reviewing the situation in regard to the potential recommencement of the Wondoan Coal Mine.
“Constructive engagement with the Australian Government in recent days has led to an acceptable outcome on taxation reform for the minerals sector,” Mr Davis aid.
“I look forward to the details on the implementation of the mineral resource rent tax being finalised as rapidly as possible to avoid any further uncertainty or delay.”
The MRRT excludes coal and iron ore operations with profits below $50 million and excludes altogether the metalliferous sector (copper, zinc, lead, nickel etc). These projects will remain within the existing State Royalties regime.
David Peever, managing director Rio Tinto Australia, said that yesterday's announcement by the Government was an important step towards satisfying these fundamental principles.
“We all want a minerals taxation system that grows the mining industry in Australia,” he said.