MRRT flares AUS miner anguish

IRJ – November 3 – The Mineral Resource Rent Tax (MRRT) may have finally shuttered its way into parliamentary introduction to Australia’s Federal cabinet, but the fight is not over for a group of small and mid-sized iron ore and coal resource houses who called on Prime Minister Julia Gillard to have done with the proposed tax, claiming that it will safeguard the real ‘super profits’ of mining majors and result in devastating circumstances for the lower market cap echelons of the industry.

This charge, predominantly led by Fortescue Metals Group chairman and mining mouthpiece Andrew ‘Twiggy’ Forrest, was immediately shut down by Treasurer Wayne Swan—the decision-maker responsible for presenting the MRRT to the house—and to date it appears that plans to impose a 30 per cent ‘super profit’ charge on iron ore and coal miners will sustain.

Forrest also warned the powers-that-be that any such tax brought in will not be in the best interests of Australia’s economy, telling reporters that “the government hasn't thought this through.

"It will instead crush the developing sector," he said.

He is joined by BC Iron managing director, Mike Young, and Atlas Iron chief, Dave Flanagan, who also lobbied against the tax plans.

Swan, who called Forrest’s comments, “complete rubbish” said: “This tax does not discriminate against small miners. It will be paid predominantly by large miners.”

The MRRT, slated to come into effect as of July 2012, will reportedly apply to miners making upwards of A$50 million in annual profits. Young spoke out about the problems associated with this benchmark, stating that companies with an output of around 800,000 tonnes per annum—relatively low in iron ore terms—will teeter over the line and suffer as a result. Adversely, giant miners such as Rio Tinto (200 million tonnes) and BHP Billiton (15 million tonnes) will be capable of handling the charge far more comfortably.

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