PERTH (miningweekly.com) – ASX-listed Fortescue Metals on Tuesday reiterated its call on the Federal government to scrap the proposed super profits tax (SPT), saying that the tax would harm the mining industry.

“It harms the mining industry and especially Fortescue, and we are urging the government to drop this proposal and to open a new forum for dialogue with all industries to discuss tax reform,” Fortescue chairperson Herb Elliott said.

In an open letter to shareholders, Elliott also called on shareholders to raise their voices against the proposed SPT.

“Please tell them how flawed this tax is and how it will continue to harm the Australian economy. Demand that they remove this deeply troubling impost on Australia’s position as a globally respected destination for investment, and on Australia’s ability to create jobs, to keep its people employed, and its overall economic strength,” he added.

Elliott added that while Fortescue acknowledged that Australia needed a tax reform, the company was “bewildered” by the government’s inability to consult on this “poorly thought out” proposal.

“They introduced the tax with no consultation before they took it into their budget and no real consultation since.”

But he added that while Fortescue was pleased to be working with the Treasury consultation panel to consider and make an input into a new and fairer tax system, the consultative process did not allow for any negotiations or discussions on the key parameters of the government’s proposal.

Elliot added that the panel had its “hands tied” behind its back by the government, before consultation had started.

“Hence, previously healthy projects become unfinanceable. We now have a huge new tax on the mining industry that will ultimately decimate future investments in new projects and have a negative impact on the value of your investment in our company,” Elliott told shareholders.

The iron-ore miner has recently placed $15-billion worth of expansion projects in the Pilbara region on hold as a direct result of the SPT. Elliott said on Tuesday that the affected projects, the Solomon and Western Hub projects, were of “national significance” and if developed, would produce as much iron-ore as the equity owned in existing iron-ore projects in the Pilbara by Rio Tinto and BHP Billiton.

“To delay, or worse still, possibly cancel two of the world’s greatest undeveloped resource projects will impact the Australian economy for decades.”

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