Australia Relents on Super Tax; Miners Up
NEW YORK (TheStreet) -- The end to uncertainty over the Australian mining tax is sending shares of mining companies higher on Friday morning.
After a long and controversial battle over taxes to be levied on mining company profits, the Australian government relented from its harshest position.
Miners will pay more tax, but it won't be in the form of the "super profits" tax that the mining industry railed against. In the mining tax package announced Friday morning, the government is expected to receive an estimated $1.5 billion in extra annual revenue from a resources rent tax on miners.
There was also speculation from mining sector bankers that the favorable turn of events related to the Australian tax plan would open up a stalled pipeline of M&A in the mining sector.Shares of Rio Tinto (RTP) and BHP Billiton (BBL) were both up more than 2.5% at the open on Friday. Xstrata (XTA) traded in London were up more than 4% on Friday. Anglo American (AAL) shares were up 2% on Friday morning in early trading. The big miners had fought the super profits tax with hammering rhetoric, and there were recent indications that political events had turned in their favor.
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