NEW YORK (TheStreet ) -- Australia's proposed mining tax remains in a state of high flux, the object of intense negotiation between industry chieftains, lobbyists, government ministers and parliamentarians in the Down Under capital of Canberra.
Lawmakers, of course, have yet to approve the levy (officially known as the Resources Super Profits Tax). And it's now understood that a final law probably won't be hammered out for months -- maybe not even by the end of the year.
Needless to say, the tax has raised the hackles of mining executives like nothing, perhaps, since the machinations of David Brower (the late and contentious former head of the Sierra Club). But the resources toll has created about as much confusion as it has controversy. The moving parts are many and intricate. And because the plan remains subject to negotiation, much of what has been publicized will likely change.Case in point: Just today, word out of Australia is that Kevin Rudd, the progressive prime minister who set tax reform in motion and is the mining levy's champion, might have already buckled under the industry's pressure. Rudd is apparently ready to extend "an olive branch" to miners, in the words of the Sydney Morning Herald. "The changes will go some way to meeting the general objections of the mining industry," the newspaper said, citing no sources. Complicating matters further is the fact that, odds are, Australia's biacameral government will probably face elections sometime later this year. Whatever the case, mining companies are hunkering down, bringing in the lobbyists and media propagandists, and preparing for a long battle ahead. At any rate, some clarification and correction is therefore in order: For starters, the current proposal -- which would have the tax take effect on July 1, 2012 -- suggests a 40% levy on the "super profits" of specific mines, and not on the mining corporation itself. That headline 40% rate is perhaps the one figure in the proposal that's the most subject to change. It served, essentially, as a starting point for the government to begin talks with its mineral-extractor constituents, analysts say. Some believe that, when it's all said and done, 30% is the more likely rate.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV