Miners 'reassessing in light of new tax'

Mining companies have privately told the federal government they can afford to pay
higher taxes, Resources Minister Martin Ferguson says.
"A number of the companies concede privately that they do have a capacity to pay
higher tax, it was always going to be a debate about what was the higher tax rate,"
Mr Ferguson said in Melbourne on Thursday.
Since the government announced plans for a new 40 per cent tax on profits from
resources projects, many mining companies have condemned the proposed tax changes.
The tax has been linked to a sharp share market sell-off and claims Australia will
undermine its international competitiveness and drive investment offshore.
Mr Ferguson said that mining companies themselves may have added to the negative
sentiment by talking down their opportunities in Australia.
According to Treasury estimates the new resource super profits tax will generate $12
billion in its first two years of operation.
Mr Ferguson's comments come as mining and energy companies reassess their
investments to determine how the proposed new tax affects them.
"Any company worth its salt is going to revisit its investment decisions for the
purposes of seeing the potential impact of that tax on their overall investment
decision-making process," Mr Ferguson said.
He said companies were also comparing their modelling of the effect of the proposed
tax with government modelling of the same.
Mr Ferguson said resource companies were raising technical issues with the
government, which could affect how the proposed tax affected their operations.
"The definitions and the technical detail can have a huge impact on the eventual tax
outcome," Mr Ferguson said.
He said even with the new tax, the government expected long-term growth in
Australia's resources sector of about 6.6 per cent a year.
Australia's second largest miner Rio Tinto Ltd on Thursday was forced to reassure
investors it had not yet decided to shelve any projects in light of the new tax
proposal.
The Australian newspaper reported that Rio Tinto planned to put on hold $11 billion
that had been earmarked to expand its iron ore operations in Western Australia.