Australia dilutes its mining tax

 
City A.M. Reporter
AUSTRALIA’S booming mining companies including BHP Billiton and Rio Tinto have won a major concession over a plan to tax their profits, potentially saving them hundreds of millions of dollars and helping cool industry opposition to the tax.

Australian treasurer Wayne Swan said yesterday the national government would repay current royalties that the miners pay to state governments, and refund any future royalty increases imposed by mining states.

The controversial 30 per cent tax on iron ore and coal mines with annual profits of $50m (£30.9m) or more is due to start in the middle of next year, and should raise $7.4bn in its first two years.

Smaller mining companies, however, led by Fortescue Metals Group, remain strongly opposed to the tax, and continued to criticise the deal with the global companies despite the latest compromise.

“It was a tax designed by BHP,” Fortescue’s billionaire chief Andrew Forrest said.

“Policy should be broad ranging, it should be fair and it should be based on the constitution of being equal among states and equal among companies. That hasn’t happened here. BHP has literally written a tax for everyone else to pay,” he said.