PERTH (miningweekly.com) – The world’s biggest gold-miner Barrick Gold said on Thursday that Australia’s proposed tax on resources profits would impact on its investment decisions in that country.

Barrick senior manager of taxation Sean Jermy declined to go into any detail, but told Mining Weekly Online that the 40% tax on super profits would improve the attractiveness of other investment destinations outside Australia.

“We do business in a lot of jurisdictions, including Africa and Papua New Guinea (PGN). PGN tried to bring in something similar [to the SPT] a few years ago, it didn’t work, and they stepped back from it.

“History is littered with examples where this didn’t work, and we are hoping that common sense will prevail,” he said on the sidelines of a SPT debate in Perth.

Jermy quoted Western Australian Mines and Petroleum Minister Norman Moore, who has previously said that the state had around A$170-billion worth of resources investments pending, of which 25% could be lost owing to the SPT.

“They are talking about A$170-billion worth of investment, and you don’t want to compromise that. We certainly share the view with the Minerals Council of Australia (MCA) that this tax is flawed.”

The MCA on Thursday reiterated the need for an open dialogue around the proposed tax reform.

Commenting on the negotiations that the federal government initiated with the Australian resource sector around the super profits tax (SPT), MCA CEO Mitchell Hooke said: “We don’t want negotiations, we want dialogue. The consultation is not looking at the fundamental elements of the design."

The MCA also reiterated findings from a study by global accounting firm KPMG, which found that new mining projects in Australia would not be able to fill a void left by large project deferrals as a result of the controversial SPT.

The report also showed that nickel, copper and gold mines would be economically unviable if the new tax were introduced.

KPMG stated that the long-run macroeconomic modelling of the SPT assumed that any capital outflows from the Australian mining sector, as a result of the introduction of the tax, would be matched by new foreign or local capital inflows into the sector.

However, it stated that it was unlikely to happen in the short-to-medium term because mining companies that have brought forward investments in more financially attractive projects, outside Australia, would have met demand and smaller or new entrants were unlikely to be in a position to develop multibillion-dollar projects.

Hooke noted that although the government was aware of the KPMG report, it was being bandied as a report aimed at proving the miners’ point of view.

“In the public arena, our analysis is being kicked around, and in the private arena, it is being heard, but not listened to.”

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