Jac Nasser, chairman of the Anglo-Australian miner told shareholders in a letter yesterday that the levy should only apply to new projects, not existing investments. The government also signaled it might be open to compromise.
Nasser said: “We have no issue with a review and reform of the tax system, but it must be conducted around sound principles. Any reform proposal must only apply to new investments: not to existing investments.”
Miners had previously appeared to present blanket opposition to the new 40 per cent tax on super profits, warning it would damage Australia’s resource sector, which is credited with saving the country from recession during the global downturn, thanks to China’s hunger for industrial raw materials.
Resources minister Martin Ferguson said the government recognised the new tax could hurt investment and aimed to wrap up tax negotiations quickly.
The government was committed to finding a “middle ground” on the tax, he said, adding that miners and the government had reached agreement on previous controversial resource taxes.
“This is important because it demonstrates that, inevitably, governments and industry find a middle ground with these reforms that accommodates both the best interests of shareholders and the national interest,” said Ferguson.
One area of possible compromise is the level where the new tax kicks in. The Treasury’s head mining tax negotiator will meet miners on 10 June to talk on possibly moving the approximately six per cent tax trigger, based on long-term sovereign bond rates.
Ferguson warned the tax could put on ice the final investment decisions of three major coal-seam gas export projects, owned by energy firms Britain’s BG Group and Australia’s Santos and Origin Energy, he said.
However Chinese steel makers Sinosteel and Anshan Iron and Steel will go ahead with planned Australian investments despite the tax, they said last week.