 PERTH (miningweekly.com) – Iron-ore-miners Fortescue Metals and Atlas Iron on Wednesday added their voices to the growing number of companies urging voters to consider the economic implications of the proposed mining tax when voting on Saturday.
Fortescue CEO Andrew Forrest, who is a vocal critic of the minerals resources rent tax (MRRT), said at a press conference in Perth that the MRRT had pushed the Australian mining industry into a similar situation as the global financial crisis, and threatened to diversify his investments away from local projects.
“The mining companies have seen the global financial crisis come and go, but it has started again for Australians. It started again on May 2, with the introduction of a totally ridiculous tax.”
The MRRT, which replaced the Kevin Rudd-inspired 40% super profits tax, will introduce a 30% tax on coal and iron-ore resource profits.
Forrest on Wednesday called the tax “economic vandalism”, adding that the “broken tax” was not only jeopardising the mining industry, but also tens of thousands of companies reliant on the industry.
“The [Julia] Gillard government cut secret deals with people in windowless rooms for political purposes. That is not economic management,” he added.
Speaking at the same briefing, Atlas Iron CEO David Flanagan told journalists that he would not vote for any government that would implement the MRRT. “I think that is irresponsible.”
“What this tax does, is it makes majors pay a lower rate of tax than the junior miners, effectively subsidising their businesses. They are diversified and multinational, while we are not. Where is the equity in that?” Flanagan added.
He noted that if the MRRT should be enacted into law, junior miners such as Atlas would grow slower and would employ less people.
“And, we will have a greater incentive to explore and invest overseas.”
Forrest also added that his company would look to diversify its investment away from Australian projects.
“We are working hard to look at diversification outside Australia, since we are being penalised for being an Australian company, employing Australian people, to develop Australian projects.
“So, like other mining companies in Australia, we unfortunately have to go overseas for one reason; Australia is becoming uncompetitive.”
While the Labor party was looking to introduce the MRRT after the election, the opposition has said that it would remove the proposed mining tax, and would commit A$418,3-million to ensure the viability of the resources industry.
On Tuesday, Robert Millner, the chairperson of New Hope Coal, which owns mines in Queensland, also urged shareholders to consider the implications of the MRRT when they vote at the weekend.
He stated that the introduction of the new mining tax could reduce the long-term shareholder returns by more than 10%.
The federal election would take place on August 21.
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