Australia Mine Tax Outcome Critical To Investor Confidence -Industry
October 01 2010 - 3:14AM
Dow Jones News
Global mining companies' confidence in Australia will depend on
the work of a government panel tasked with refining a controversial
mining tax plan, according to the country's peak mining lobby
Friday.
The government has a "small policy window" to prevent investor
views of the country's mining regime deteriorating, the Minerals
Council of Australia said in a submission to a policy group
overseeing the implementation of the tax.
"A lot of work needs to be done in a relatively short space of
time to turn around negative perceptions and to reinforce investor
confidence in Australia as a premier destination for minerals
production and investment."
The council warned that competition from Brazil, Canada, India,
Africa, Indonesia, Mongolia, Russia, Colombia, and South Africa
could threaten Australia's dominance of iron ore and coal, the two
commodities affected by the government's planned Minerals Resource
Rent Tax.
The government's Policy Transition Group, composed largely of
former and current mining and energy executives, is meeting over
the next two months to refine the final form of the tax.
The Minerals Council stridently opposed a previous version of
the tax, the Resource Super-Profits Tax. Prime Minister Julia
Gillard revised the tax as the MRRT within a week of arriving in
office in late June, after consultations with BHP Billiton Ltd.
(BHP), Rio Tinto PLC (RTP) and Xstrata PLC (XTA.LN), cutting the
tax rate to an effective 22.5% and removing it from all commodities
but coal and iron ore.
In its submission, the Minerals Council highlighted its support
for the current version of the tax, describing the change as "a
positive step and an opportunity to draw a line under the
uncertainty created by the RSPT."
"If the industry is to have confidence in the work of the Policy
Transition Group and in the future stability of Australia's
resource taxation regime, this commitment must be iron-clad," it
said.
-By David Fickling, Dow Jones Newswires; +61 2 8272 4689;
david.fickling@dowjones.com
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