Miner blames new tax for move to Africa

An iron ore miner is blaming the federal government's new super profits tax for its
decision to cancel planned exploration projects in Australia and move to Africa.
The announcement comes as Treasurer Wayne Swan engages in a spat with Australia's
fifth richest man, Clive Palmer, over a plan to adopt a key recommendation of the
Henry tax review.
West Australian Premier Colin Barnett fears more mining companies will leave
Australia if the flagged tax on super profits in the resources sector is enacted.
Perth-based iron ore miner Cape Lambert on Tuesday announced it would cancel planned
exploration works in Western Australia.
"I've made the decision now: I'm ceasing all drilling work in Western Australia that
we were planning to do later this year in one of my mines up in the Pilbara," the
company's executive chairman Tony Sage told ABC Radio.
"What is the point if you're going to get slugged an extra tax?"
Mr Sage said the resources company would instead shift its investment dollars,
earmarked for Australia, to four projects in Africa.
The federal opposition's deputy leader Julie Bishop told Sky News that the Cape
Lambert decision would be the first of many such announcements to come.
Mining magnate Clive Palmer labelled Mr Swan a fool for wanting to levy a 40 per
cent tax on profits made from non-renewable resources from July 2012.
Mr Palmer said he would consider taking projects like coal developments offshore to
places like Indonesia where he would be taxed at only 20 per cent.
"When I was taxed at 30 per cent I might have done it in Queensland, but now I'm
going to be taxed at 70 per cent I'll go ahead and do it in Indonesia," he told
reporters on the Gold Coast.
"So, the treasurer is just a fool. That money he thinks he's getting, he's not going
to get more money - he's going to get less money."
Mr Swan hit back, questioning Mr Palmer's motives as he began talks with the mining
industry.
"Clive Palmer acts in the interests of his own fat pockets. He doesn't act in the
interest of the Australian people, and it's my job to act in the interests of the
Australian people and make sure they get a fair share," Mr Swan told reporters.
Mr Barnett called on the federal government to abandon its plan for the Resource
Super Profits Tax, telling parliament the 40 per cent levy was "too high".
Earlier, he said the tax plan, announced on Sunday, would jeopardise future projects
in Australia.
"I have been struck over the last 24 hours by the numbers of both larger and smaller
companies that are clearly reviewing investment decisions," he told ABC Radio.
Commonwealth Securities chief economist Craig James said uncertainty about whether
the Senate would pass the government's proposed tax had created uncertainty for
investors.
Prime Minister Kevin Rudd says he's open to negotiations with mining companies on
the details of his government's proposed new super tax on their profits.
But he told reporters in Perth that Australians wanted a fairer share of the massive
profits miners made from resources that were owned by Australians.
Mr Rudd slammed West Australian Premier Colin Barnett for trying to "walk both sides
of the street" in asking for more money for infrastructure while attacking the new
super profits tax that would raise the revenue to pay for more infrastructure in WA.
The prime minister flew to the WA capital on Tuesday for talks with mining company
officials on the new super profits tax.
He said the proposed 40 per cent tax on profits was "about right". But he declined
to say if the government might reduce it.



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