"Your board has serious concerns about the impact of this proposed new tax," du Plessis wrote, "not only for Rio Tinto and the mining industry, but indeed for the whole of Australia's future economic prosperity." The tax, du Plessis went on, "has been developed in a vacuum and is divorced from the day-to-day realities of business." Meanwhile, BHP Billiton's equity received a downgrade Wednesday from JPMorgan ( JPM) mining analysts in London, who cited valuation relative to peers and sheer diversity -- BHP's sprawling operations mean that it mines just about every kind of metal and mineral that it's possible to mine -- as the chief reasons for the cut. At the moment, the analysts said they believe that a rally will continue in "higher beta stocks" -- that is, mining companies with leverage to one kind of metal, copper especially. BHP's New York-listed American depositary receipts were trading Wednesday morning at $66.81, down 1.5%. Rio Tinto shares were losing 0.8% to $49.55. The JPMorgan analysts, who cut their rating on BHP to underweight, struck a cautious, almost fearful note in their 59-page report Wednesday, which tackled the whole of the metals space. It's a sentiment that seems to have become increasingly common among commodities players. Though the firm remains bullish, the analysts wrote, "The the risk to this call is the very real and present danger that Q3 this year could see a hard landing in China aligned with peak softness in Western markets." Translated, China's recent moves to end rampant speculation in its real estate markets and stave off the creation of a dangerous asset bubble will lead to a slower-growing economy in the People's Republic. Because Chinese industry has come to dominate global trade in raw materials, any softening there will without question hurt metals prices.
Combined with the Aussie tax and the European debt crisis, fears of a slower China have contributed to a volatile few weeks in commodities and commodities-linked stocks. Meanwhile, the ramifications of a piece of domestic policy from a nation on the other side of the planet continued to make global waves. Caterpillar ( CAT), for instance, has said that the Aussie mining tax could hurt sales of its giant mining trucks, Reuters reported Tuesday, while the mining-equipment specialist manufacturers, Joy Global ( JOYG) and Bucyrus ( BUCY), both based in Milwaukee, have said the same. -- Written by Scott Eden in New York