Australia's mining industry is cautiously hopeful the replacement of Australian Prime Minister Kevin Rudd by his deputy Julia Gillard could be a circuit breaker in their stand off with the government on its planned mining tax.

But miners said that with Treasurer Wayne Swan, an architect and chief promoter of the tax, not only keeping his position but also being promoted to Deputy Prime Minister, there is no guarantee that Gillard's ascendancy will lead to significant changes.

Gillard may give some hint when she gives a press conference shortly, but initial indications are it is unlikely the Resource Super Profits Tax will be scrapped in its entirety, with a senior union official telling Dow Jones Newswires he has been advised the tax will remain, although in what form remains unclear.

"There will still be a super profit tax," the official said.

Members of the ruling centre left Labor party have taken the unprecedented step of deposing a first term prime minister in the wake of Rudd's sharp slide in the polls after a series of policy missteps.

A person close to one of Australia's biggest mining companies said Gillard has more room to back down on the tax or to announce a wide ranging review of it, but that there was no guarantee that she would do so, especially with Swan as her treasurer.

"The miners see it as potentially a circuit breaker but one that is not automatic, and they will be very wary," the person said.

He said until the miners saw that there had been a change in policy they were likely to press on with their wide ranging advertising campaign against the tax.

Tony Sage, executive chairman of Cape Lambert Resources Ltd. (CFE.AU), said he expected the new leadership team of Prime Minister Julia Gillard and Deputy Prime Minister Wayne Swan were wedded to the tax.

"Wayne Swan is the architect of this tax and he has been virulently opposed to any compromise, so it would be a big back-down for him personally. Gillard is from the left and was never a favorite of the mining industry," he said.

A mining analyst at an international bank in Sydney added that the tax was too important to the government's plans to close its budget deficit by 2012-2013 to be lightly sacrificed.

"You'd have to be extremely brave to assume it wouldn't continue in some form," he said, speaking anonymously because his views didn't represent those of the bank.

In its budget papers released last month, the government estimated it would raise A$3 billion from the tax in 2012-2013 and A$9 billion the following year.

Industry opposition to the tax, announced in May, has mounted over the past two months as Rudd's approval ratings have slipped.

Mining companies claim that the tax will cause foreign investment in new and existing projects to be choked off because of the expectation of lower returns.

Fortescue Metals Group Ltd. (FMG.AU), Xstrata PLC (XTA.LN) and Cape Lambert have all said they were putting projects on hold in light of the tax.

Rio Tinto Ltd. (RTP) has put all its Australian growth projects under review and BHP Billiton Ltd. (BHP) has cited the giant expansion of the Olympic Dam mine in South Australia as a prime example of a mine that could be affected.

-By Alex Wilson, Dow Jones Newswires: 613-9292-2094; alex.wilson@dowjones.com
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