Rio Tinto's Hamersley iron ore mine in Western Australia
NEW YORK (
TheStreet) -- Mining giants have stepped up their battle with the Australian government, which signaled Wednesday that it may revise its contentious plan to tax the so-called "super profits" of resource extractors Down Under.
Aussie Prime Minister Kevin Rudd and his key aides met Wednesday with several top managers from multinational
mining companies with major assets in the country, including
Xstrata. The upshot of those talks: nothing, not yet at least.
During the meeting, miners tried once again to pound home their
chief criticisms of the Resource Super Profits Tax
, which Rudd announced on May 2 to such an uproar that, some observers say, it has endangered his government this election year.
First, miners don't want the levy to apply to mines in operation before the tax goes into effect (slated for 2012, though it still needs to pass through parliament); they want a grandfather clause, in other words.
Miners also want the government to reduce the headline tax rate of 40% on a 6% rate of return. In comments to the press, Australian ministers stood fast on this point, at least for the time being, saying they would be making no such compromise.
The companies also continued to argue that different tax rates and regimes ought to apply to different metals or resources, since important distinctions between them would render a one-size-fits-all plan incoherent, miners say.
In a letter to Australian shareholders Wednesday, Rio Tinto's chairman, Jan du Plessis, played a political card, as the industry has been doing since the tax was announced, saying that nothing less than the future of the nation was at risk.