"The companies agree that the proposal presented by the government represents very significant progress toward a minerals taxation regime that satisfies the industry's core principles," BHP, Rio and Xstrata said in a joint statement on Friday.
Nonetheless, the big caveat to the latest chapter in the Australian mining-tax saga is that a final vote still rests on upcoming Australian parliamentary elections. The opposition party has vowed to oppose any tax if it wins control of the government, while Australian political mavens were speculating on Friday that the concessions made on the mining tax had saved the Australian Prime Minister Julia Gillard from defeat in the upcoming election.
The new Minerals Resource Rent Tax will apply only to iron ore and coal projects, which represent as much as 25% of Australian exports. The resource rent tax will be at a rate of 30%, down from the super-profits tax rate of 40%. The rate at which the tax kicks in was made more palatable too, at the 10-year bond rate plus 7% percent -- currently at around 12% -- versus the original plan which called for the super profits tax to be triggered at 6% return on capital.
U.S. miner Peabody Energy (BTU) had previously been making a play for Australian miner Macarthur Coal, and investments bankers told Reuters on Friday that the end to the super tax proposal might lead to a renewed effort from Peabody.-- Written by Eric Rosenbaum from New York.
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