Profit tax affecting decisions: Barrick

The world's largest gold miner, Canada's Barrick Gold Corporation, says the Rudd
government's planned new mining tax is affecting its investment decisions in
Australia.
"I can't go into details, but it is impacting investment decisions we're making
right now," Sean Jermy, Barrick's senior manager of taxation for Western Australia,
told reporters after a Minerals Council of Australia function in Perth on Thursday.
"We're a big owner of mining real estate in this state.
"You can say without a shadow of a doubt, it will impact the value of existing
operations."
Barrick and joint venture partner Newmont Mining Corporation began in March
expanding Australia's largest open pit gold mine, the aptly-named Super Pit at
Kalgoorlie in WA.
When asked whether the resources super profits tax (RSPT), if adopted, would make
other nations more attractive to Barrick, Mr Jermy said: "It could do."
"Barrick does a lot of business in Africa and we have a mine in Papua New Guinea ...
where they tried to bring in something similar a couple of years ago and they
stepped back from it.
"History is littered with examples of where this hasn't worked.
"We hope common sense will prevail."
Barrack is not listed in Australia and has not previously gone on the record
regarding the RSPT, but Mr Jermy said Barrick shared the views of the Minerals
Council of Australia.
"It's really (about) the new investment, not wanting to compromise that," he said.
"Any new tax should not affect our international competitiveness (and) it should
differentiate between commodities.
"We don't understand why you offer something to the industry like a (40 per cent)
rebate (on losses) that's not asked for.
"We don't understand how that rebate would work and it is a key mechanism of this
tax design."
Mr Jermy said Barrick had made submissions to the RSPT consultation panel, but
didn't receive a response.
"You really can't call it negotiation or consultation," he said.
"A lot of it is going on behind closed doors.
"A true collaborative process is where you come to the table with a blank sheet of
paper.
"We've come so far down the path now, it is hard to see how that could happen.
"In my mind, you've got to start from scratch again. Non-mining people have said
that, which is pleasing."
KPMG partner Craig Yaxley told the function that miners would find it hard "if not
impossible" to secure debt funding under the RSPT.
It echoes recent comments by Fortescue Metals Group Ltd chief executive Andrew
Forrest as the reason the iron ore miner shelved two projects in WA.
Minerals Council of Australia chief executive Mitch Hook told the function it was
extraordinary how the mining sector had been denigrated by the pro-RSPT camp since
the tax was announced in early May.
"There has to be a settlement," Mr Hook said.
"I think we've done irreparable damage to Australia's sovereign risk."