Australian PM stands firm on mining tax

Marion Dakers
MINING giants Rio Tinto, Xstrata and BHP Billiton met with the Australian government yesterday to discuss a proposed mining super-tax, but complained that their concerns “had not been addressed”.

The battle over the 40 per cent “resource super profits tax” showed little sign of resolution following the meeting, as the government held firm on introducing the levy by 2012.

Prime Minister Kevin Rudd said the government is willing to compromise with miners, and is “serious about generous transition arrangements”.

However, the government has not ruled out a retrospective tax, which Rio Tinto described as “destabilising” in a letter to shareholders yesterday.

The letter was signed by chairman Jan du Plessis and urged shareholders to join the Keep Mining Strong campaign against the measures.

Another sticking point for miners is the lucrative coal seam gas industry. Companies operating in this fledgling hybrid sector have argued for an exemption to any mining tax.

Prime Minister Kevin Rudd said some sectors may yet be granted loopholes. “We’re not talking about different tax rates,” he told ABC Radio after the meeting.”

He added: “I am conscious that in transitional arrangements there are different arguments in petroleum as against, for example, minerals products.”

Many mining firms have campaigned vigorously since the tax was announced on 2 May, splashing out on a multi-million dollar advertising campaign to oppose the move.

Xstrata has suspended operations in the country as details of the tax are negotiated. The government is meeting with other mining firms over the coming weeks to thrash out a deal.