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Wednesday, May 5, 2010.

From Creamer Media in Johannesburg, I'm Loni Prinsloo.

Making headlines this week:

Australian Prime Minister Kevin Rudd on Wednesday met with Perth-based miners to discuss the implications of the proposed super profit tax on mining companies.

The Rudd government over the weekend introduced a resources tax of 40%, applicable from July 1, 2012.

The 40% tax on profits from resources projects will apply after allowing for extraction costs and recouping capital investment. Treasurer Wayne Swan noted that companies wouldn't pay the tax until after they provided shareholders with a normal return on capital investments, and then only on any additional profit. Rudd said that the tax would only target ‘super profits'.

Not surprisingly, industry reaction to the new tax has been less then positive. Diversified miner BHP Billiton CEO Marius Kloppers said that the proposal jeopardised the future of investments in the country.

South African iron-ore miner Kumba Iron Ore, or KIO, has effectively moved its ongoing dispute with ArcelorMittal South Africa, or AMSA, from the realm of a pure dispute over pricing, into one that could now also affect supply. The company has indicated to Engineering News Online that it could, as a last resort, terminate supply to Africa's largest steel producer.

The JSE-listed miner said that, unless there was urgent resolution on an interim pricing and payment mechanism, the basis upon which it would continue to supply iron-ore to the steel producer could be affected.

KIO didn't immediately indicate a timeframe for reaching such an agreement. However, a spokesperson said that the time period shouldn't exceed eight weeks.

The two companies have been in dispute over the future pricing of iron-ore flowing from the Sishen mine since February 5, when Sishen Iron Ore Company notified AMSA that it was cancelling a favourable supply deal, struck in 2001, on the basis that AMSA had failed to convert its 21,4% undivided share of the Northern Cape mine in line with the demands of the Mineral and Petroleum Resources Development Act.

Diversified miner BHP Billiton will repair the remaining damage to the Hay Point terminal during a planned shutdown later this year. The damage was caused by cyclone Ului in March.

Spokesperson Fiona Martin was unwilling to comment on when the planned shutdown would take place, or to the extent of the damage. However, she said that both berths at the Hay Point coal terminal, in Western Australia, were performing well after returning to operation in early April.

The terminal was closed on March 11. It handles coal from various mines managed by the BHP Billiton Mitsubishi Alliance in the Bowen basin. The miner later declared a force majeure, following damages caused by the cyclone.

Also making headlines:

Canadian Finance Minister Jim Flaherty says Australia's proposed new mining tax could prove advantageous for Canada by attracting investors seeking lower tax jurisdictions.
India's largest iron ore miner, NMDC, is in talks to form a coal mining joint venture with state-owned Coal India.
Gold miner Simmer & Jack Mines' reports a fatal accident at its Buffelsfontein mine, in the North West Province of South Africa.
And, Canadian uranium producer Cameco says that Chinese buyers will likely start entering into long-term supply contracts for uranium in the near term.

That's a round up of news making headlines this week.