Resource Tax May Shift Mining Overseas
Source: UPI (8/5/10)
"Diggers & Dealers chair calls proposed mining tax 'economic terrorism.'"
In opening the typically apolitical "Diggers & Dealers" annual forum in the Outback region this week, the gathering's chairman called the government's proposed mining tax "economic terrorism," China's Xinhua News reported.
Fortescue Metals Group CEO Andrew Forrest told the group of about 2,000 that Canada, New Zealand and Uzbekistan are becoming more appealing to mining companies. And in his speech to the mining forum, Ivanhoe Chairman Robert Friedland warned that Mongolia, with its lower-tax regime compared to Australia's looming resources tax, is an attractive destination for mining investment.
Noting that its gross domestic product is expected to grow 110% over the next four years, "Mongolia could kill Australian coal," Friedland said.
The Gillard administration struck a deal with mining giants Rio Tinto, BHP and Xstrata, cutting the proposed 40% "super profits" tax to a 30% levy on iron ore and coal mine profits.
The Association of Mining and Exploration Companies, representing small- and medium-sized miners, says it was excluded from the talks and has re-launched an advertising campaign against the tax.
Diggers & Dealers Chairman Barry Eldridge rejected the government's claims that a resource rent tax would better spread the benefits of the mining boom, noting that mining companies spend much on asset development and exploration.