Miners tentatively welcome MRRT report

Miners have tentatively welcomed the recommendations of the federal government's
policy transition group (PTG) on the planned new mining tax.
The Minerals Council of Australia (MCA) said the group's report, which contained 94
recommendations and was handed to Treasurer Wayne Swan on Tuesday, was a significant
milestone.
However, it did not address all of the sector's uncertainties about the reforms.
One of the recommendations was a full credit to coal and iron ore miners for all
current and future state and territory royalties.
This contradicts the government's stance to limit credits to royalties existing at
May 2 this year.
"It is now crystal clear that all current and future royalties must be credited
against MRRT (minerals resource rent tax) liabilities, as the industry has
maintained throughout the debate," the MCA said.
It said the report vindicated the industry's call for detailed consultation on the
new tax.
The MCA said there were some technical areas where the miners considered that the
PTG report departed from industry expectations and normal tax practice.
These included limiting transferability of losses between coal and iron ore projects
"even though the MRRT ... should provide for grouping of losses".
Further clarification and consultation would be needed on this and other issues, the
MCA said in a statement.
Rio Tinto said it would take time to fully consider the 94 recommendations, but it
was encouraged to see that many of the key issues raised through the consultation
process appeared to have been appropriately recognised by the PTG.
It also welcomed the royalty creditability recommendation.
Rio Tinto managing director Australia David Peever said the report was an important
step towards ensuring that the key principles and design elements of an agreement
with the federal government, entered into in July, were carried through into the tax
legislation.
Rio Tinto, together with BHP Billiton Ltd and Xstrata, reached a compromise deal
with the Labor government to reduce the rate and scope of the unpopular resources
super profits tax via the less onerous mineral resources rent tax.
Xstrata Coal said the report "appears to reflect the spirit of the heads of agreement".
It too will consider each recommendation in detail.
"We have been pleased with the consultative nature of the PTG process to date and
support the recommendation for an implementation working group that includes
taxation exports and representatives from industry and government, to ensure the
current progress is not lost," Xstrata said.
Resource Minister Martin Ferguson jointly chaired the PTG with former BHP Billiton
chairman Don Argus.