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Friday, January 6, 2012

Iron ore price fall raises doubts on Australia mine tax plan

Friday, 06 Jan 2012

Reuters reported that Australia politically charged mining profits tax could raise less of the initial AUD 11 billion Prime Minister Ms Julia Gillard is promising if iron ore prices return to November levels accountants BDO warned in a senate submission.

BDO said If iron ore experiences a double dip drop prices could fall to a point where no one will pay MRRT. It SAID between USD 120 and USD 125 a tonne for ore, it was difficult to envisage established mining companies paying any tax, given large deductions afforded to them under the plan.

BDO said "We respectfully request treasury advice what MRRT tax will be collected if iron ore prices remain at USD 120 for an extended period of time."

Mega miners Xstrata, BHP Billiton and Rio Tinto last year agreed with Ms Gillard to pay the Minerals Resource Rent Tax only if the tax was cut to 30% from 40% and limited to profits from iron ore and coal mining.

(Sourced from Reuters)

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