Miners welcome revised Aussie resource tax

2nd Jul 2010 07:03

London-listed mining heavyweights BHP Billiton, Rio Tinto and Xstrata are “encouraged” by the Australian government’s decision to replace the controversial Resources ‘Super Tax’ with a more moderate alternative.In a joint statement, the trio welcomed a new Mineral Resource Rent Tax (MRRT) that would only apply to iron ore and coal resources from 1 July 2012. They had been up in arms about former Prime Minister Kevin Rudd’s idea of a new 40% tax on profits, which they said would make Australia uncompetitive and cost jobs.A more acceptable deal seemed more likely when Julia Gillard ousted the increasingly unpopular Rudd in a Labour Party coup last week.The new rate of tax will be 30% applied to the taxable profit at the resource, and all post 1 July 2012 expenditure is to be immediately deductible for MRRT. The tax will be calculated on an individual taxpayer's direct ownership interest in the project.“The companies agree that the proposal presented by the Government represents very significant progress towards a minerals taxation regime that satisfies the industry's core principles,” read a statement from the miners Friday.“The companies will continue to work constructively with Government to ensure that the detailed design of minerals taxation maintains the international competitiveness of the Australian resources industry into the future.”Separately, BHP boss Marius Kloppers said he was “encouraged” by the MRRT design, which is closer to the company’s principles of sound tax reform.But all three acknowledge that there’s still a lot of work to be done.