Archive for July 1, 2010

The Gillard government and Australia’s big three miners have made significant progress in talks about a resources tax compromise and are believed to have reached an agreement that would end one of the biggest government-private sector brawls in history.

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Breaking News for Mining Tax

Australia’s Gillard cuts deal with mining companies on taxes
Australia’s Prime Minister Julia Gillard announced Friday that Australia’s leading mining companies have agreed to pay a 30 percent tax on the profits from iron-ore and coal mining..

Mining shares weaken as threat of Australia’s supertax still looms
Markets become aware that change of Australian prime minister does not necessarily mean change in plans to tax miners’ profitsMining groups face a long period of uncertainty over the introduction of a controversial supertax in Australia following a change of leadership in the country, City analysts are warning.Welsh-born Julia Gillard became Australian prime minister on Wednesday after Kevin Rudd stood down before a leadership ballot had been held. Rudd had backed a plan to slap a 40% tax on mining groups’ profits, but large companies such as BHP Billiton and Rio Tinto said such a move had threatened $20bn worth of investment in the country. The tax would be imposed in addition to corporation tax and other royalty rates, and the miners claimed it would see their total tax rate rise from 40%-50% to 50%-57%.Initially, mining shares rose on hopes the tax might be withdrawn by the new regime, but such a climbdown would cause financial problems for the government, which is trying to move its budget back into surplus by 2013. Indeed, Gillard said she agreed with the idea that mining companies should pay more tax, although she promised to review the situation and conduct negotiations. BHP welcomed the prospect of talks but Rio maintained any new tax should not apply to existing projects and should be set at an internationally competitive rate.Analysts at UBS said they still believed the supertax would be introduced by the ruling Labor party, although it was likely to be watered down. But analyst Olivia Ker added: “Given the proposed new negotiation, the resolution of details may now be further in the future, opening up a longer period of uncertainty for the miners.

Mining shares jump as Australia gets new PM
Political revolt down under gave a boost to mining stocks ” and the FTSE 100 ” this morning.New Australian prime minister Julia Gillard, who replaced Kevin Rudd, is seen as more willing to negotiate with mining companies over the controversial tax on so-called “super profits” made by the resources companies.One of Gillard’s first actions on taking power has been to halt the government’s advertising campaign promoting the tax, prompting BHP Billiton to suspend its counter ad campaign, which had highlighted the impact on jobs and investment in the industry.”I have said to the mining companies of this nation publicly that the government is opening its door and we are asking them to open their minds,” Gillard told the Australian parliament.That was enough to send shares in BHP Billiton, the world’s largest mining group, up 1.5% to £19.75 in early London trading, and there were gains for Rio Tinto, up just over 1% to £34.34; Vedanta, 1.4% ahead at £24.27, and Xstrata, 1.3% higher at £10.31.The FTSE 100 index was up 25 points at 5202.44.MiningAustraliaBHP BillitonRio TintoVedanta ResourcesXstrataFiona Walshguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds.

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• RT @cnni: Australia PM cuts mining tax deal http://bit.ly/aFZ2RR
• Australian Election Looms, Foreign Investors Reassured|The revised mining tax unveiled by Australia is a big win .. http://oohja.com/xgXxa
• New mining tax ’step in right direction’ http://bit.ly/dtxyDj
• Australia PM cuts mining tax deal: Australia’s Prime Minister Julia Gillard announced Friday that Australia’s lead… http://bit.ly/9yOG6k
• ::followergold:: Australia PM cuts mining tax deal: Australia’s Prime Minister Julia Gillard announced Friday that… http://bit.ly/9yOG6k
• Australia PM cuts mining tax deal: Australia’s Prime Minister Julia Gillard announced Friday that Australia’… http://tinyurl.com/38bqrej

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