MARKET TALK: Aussie Mining Tax Report A Big Industry Win -Analyst

1st Jul 2010 06:36

0535 GMT [Dow Jones] A reported deal between the mining industry and the Australian government on a revised mining tax looks to be a major win for the industry, Morgan Stanley analyst Craig Campbell says. The Age newspaper, without citing sources, says the government has agreed to increase the rate at which the tax kicks in to about 12%, to exclude nickel mining from the regime and to rework the treatment of depreciation of assets. Campbell says this last concession would be very significant, as it would allow miners with older assets that had been largely written down to claim deductions based on depreciation from the market value of their assets rather than the book value. This would benefit BHP Billiton (BHP.AU) and Rio Tinto (RIO.AU) for their decades-old iron ore operations as well as thermal coal producers like Xstrata (XTA.LN) and Centennial Coal (CEY.AU), who Campbell says would be big winners from such a change. Campbell says it still remains to be seen if the government has budged on the 40% rate of the tax and this remains key for base metals projects, which were at risk from the original proposal. ([email protected]) Contact us in Singapore. 65 64154 140; [email protected] (END) Dow Jones Newswires July 01, 2010 01:36 ET (05:36 GMT)