MARKET TALK: Australian Mining Stocks Bounce On Tax Deal

2nd Jul 2010 02:11

0111 GMT [Dow Jones] Australian mining stocks getting a good boost from the announcement of changes to the government's planned mining tax, although how long this can be sustained in face of global headwinds remains to be seen. The government has made major concessions to the industry, cutting the headline rate, excluding base metals, raising the threshold at which the tax kicks in and offering generous transition arrangements on depreciation. Despite fears about Chinese demand and weaker commodity prices overnight, mining stocks move higher on the tax deal; BHP Billiton (BHP.AU) up 0.7%, Rio Tinto (RIO.AU) 1.3%, Alumina (AWC.AU) 1%, OZ Minerals 0.5%, Energy Resources (ERA.AU) 2.8%, Fortescue (FMG.AU) 2.8%, Centennial (CEY.AU) 2.1%. Not all miners moving higher, gold stocks could not overcome weaker prices with Newcrest (NCM.AU) tumbling 3.4% and Lihir (LGL.AU) off 3.2%. This begs the question of how long the rest of mining sector can sustain the glow against a backdrop of macro global demand concerns, with BHP and Rio both easing back from their early rallies. ([email protected]) Contact us in Singapore. 65 64154 140; [email protected] (END) Dow Jones Newswires July 01, 2010 21:11 ET (01:11 GMT)