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)
Showing posts with label Prime Minister Julia Gillard. Show all posts
Showing posts with label Prime Minister Julia Gillard. Show all posts
Friday, January 6, 2012
Wednesday, January 4, 2012
Iron ore fall raises doubts on Australia mine tax plan
Wed Jan 4, 2012
SYDNEY, (Reuters) - Australia's politically charged mining profits tax could raise less of the initial A$11 billion Prime Minister Julia Gillard is promising if iron ore prices return to November levels, accountants BDO warned in a senate submission.
Mega-miners Xstrata, BHP Billiton and Rio Tinto , last year agreed with Gillard to pay the Minerals Resource Rent Tax only if the tax was cut to 30 percent from 40 percent and limited to profits from iron ore and coal mining.An earlier version was deemed unworkable within the ruling Labor Party and led to the removal of Australia's first Labor leader in 11 years, Kevin Rudd.
Analysts are divided on the direction of iron ore prices, which this year dropped as low as $116 a tonne and ranged from $119 to $147 a tonne over November.On Wednesday, the price stood at $138.30 a tonne.
Steel industries in most countries requiring ore are suffering, leaving China and other robust Asian economies with healthier balance sheets the key buyers.If iron ore experiences a "double dip drop" prices could fall to a point "where no one will pay MRRT", BDO said.
Between $120 and $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 advise what MRRT tax will be collected if iron ore prices remain at $120 for an extended period of time," BDO said in its submission.
TAX BEING CLOSELY WATCHED
Gillard wants to use the tax to boost payments into worker pension funds and to spread the benefits of Australia's resources boom to other parts of the economy.The tax is being closely watched by other resource nations.Huge expansion plans underway by big mining houses promise to deliver hundreds of millions more tonnes of iron ore to the global supply pool.
At the same time, there are some signs China's steel production is waning after years of near-uninterrupted growth.China's daily crude steel output fell to 1.666 million tonnes in the second 10 days of December, down 0.44 percent from the preceding 10 days, data from the China Iron & Steel Association showed.
JULY 1 START
For the first half of 2012 -- the tax starts on July 1, 2012 -- seasonally weaker seaborne iron ore supply and some recovery in steel production should keep iron ore prices in a $130-$150 range according to CLSA analysts. By 2014, the price could be as low as $100 a tonne, CLSA forecasts.
Supporters of the tax have accused detractors of waging a scare campaign by saying Australia, whose economy relies heavily on mining, would see less investment in mining if the tax was introduced.
Mining is the lifeblood of the Australian economy and iron ore and coal generate the lion's share of national overseas earnings.But to date, even detractors concede that there's been little sign Australia was losing its appeal as a mining centre.
Rio Tinto is accelerating a plan to lift output by 50 percent to 333 million tonnes a year by 2015. BHP is aiming for a 37 percent rise in production to 220 million tonnes by around the same time.Gillard's supporters estimate Xstrata, BHP and Rio Tinto would shoulder 80 percent of the $11.1 billion in added tax revenue collected in the first three years.
(sourced Reuters)
SYDNEY, (Reuters) - Australia's politically charged mining profits tax could raise less of the initial A$11 billion Prime Minister Julia Gillard is promising if iron ore prices return to November levels, accountants BDO warned in a senate submission.
Mega-miners Xstrata, BHP Billiton and Rio Tinto , last year agreed with Gillard to pay the Minerals Resource Rent Tax only if the tax was cut to 30 percent from 40 percent and limited to profits from iron ore and coal mining.An earlier version was deemed unworkable within the ruling Labor Party and led to the removal of Australia's first Labor leader in 11 years, Kevin Rudd.
Analysts are divided on the direction of iron ore prices, which this year dropped as low as $116 a tonne and ranged from $119 to $147 a tonne over November.On Wednesday, the price stood at $138.30 a tonne.
Steel industries in most countries requiring ore are suffering, leaving China and other robust Asian economies with healthier balance sheets the key buyers.If iron ore experiences a "double dip drop" prices could fall to a point "where no one will pay MRRT", BDO said.
Between $120 and $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 advise what MRRT tax will be collected if iron ore prices remain at $120 for an extended period of time," BDO said in its submission.
TAX BEING CLOSELY WATCHED
Gillard wants to use the tax to boost payments into worker pension funds and to spread the benefits of Australia's resources boom to other parts of the economy.The tax is being closely watched by other resource nations.Huge expansion plans underway by big mining houses promise to deliver hundreds of millions more tonnes of iron ore to the global supply pool.
At the same time, there are some signs China's steel production is waning after years of near-uninterrupted growth.China's daily crude steel output fell to 1.666 million tonnes in the second 10 days of December, down 0.44 percent from the preceding 10 days, data from the China Iron & Steel Association showed.
JULY 1 START
For the first half of 2012 -- the tax starts on July 1, 2012 -- seasonally weaker seaborne iron ore supply and some recovery in steel production should keep iron ore prices in a $130-$150 range according to CLSA analysts. By 2014, the price could be as low as $100 a tonne, CLSA forecasts.
Supporters of the tax have accused detractors of waging a scare campaign by saying Australia, whose economy relies heavily on mining, would see less investment in mining if the tax was introduced.
Mining is the lifeblood of the Australian economy and iron ore and coal generate the lion's share of national overseas earnings.But to date, even detractors concede that there's been little sign Australia was losing its appeal as a mining centre.
Rio Tinto is accelerating a plan to lift output by 50 percent to 333 million tonnes a year by 2015. BHP is aiming for a 37 percent rise in production to 220 million tonnes by around the same time.Gillard's supporters estimate Xstrata, BHP and Rio Tinto would shoulder 80 percent of the $11.1 billion in added tax revenue collected in the first three years.
(sourced Reuters)
Thursday, November 3, 2011
Australian iron ore mine magnate leads fight against tax
Thu Nov 3, 2011
* Small Australian miners plea for mine tax changes
* Small miners say global miners will pay nothing
* Treasurer says big miners pay the most
CANBERRA, Nov 3 (Reuters) - A delegation of small- and mid-sized Australian mining company executives on Thursday called on Prime Minister Julia Gillard to abandon a proposed mining profits tax, saying the biggest firms would pay nothing and leave smaller ones to shoulder the burden.
The claim was immediately rejected by Treasurer Wayne Swan before the Australian Parliament.
Gillard earlier this year vowed to introduce a 30 percent tax on profits from iron ore and coal mining after holding closed-door negotiations with the nation's three biggest mining houses, BHP Billiton , Rio Tinto and Xstrata .
At the time, Gillard estimated the three companies would account for upwards of 90 percent of the estimated A$11 billion in revenue in the first three years.
Fortescue Metals Group founder Andrew Forrest, one of Australia's richest individuals, who made his fortune in iron ore mining, led the delegation, which also warned the tax threatened Australia's economic competitiveness and would stifle exploration.
"The government hasn't thought this through," Forrest told reporters.
Swan rejected the delegation's claim that big mining companies would not pay the new tax, and said companies reaping big profits from the mining boom would be legally required to pay their fair share.
"This tax does not discriminate against small miners. It will be paid predominantly by large miners," Swan told parliament, adding the comments by Forrest were "complete rubbish."
The government on Wednesday introduced legislation for the tax to apply to iron ore and coal miners making A$50 million or more in annual profits. It is scheduled to start July 1, 2012, though it is still uncertain if the government has the support it needs from three independent lawmakers to pass the bills.
Forrest, BC Iron managing director Mike Young, and Atlas Iron chief Dave Flanagan lobbied independent parliament members on Thursday to push their case for the government to rethink supporting the tax.
The executives released projections from accounting firm DBO claiming the tax would see small- and mid-tier miners pay an effective rate of 46 percent, while BHP Billiton and Rio Tinto would pay no tax due to the large deductions they would be afforded.
Forrest said the bigger mining houses would pay no tax under the plans for up to 25 years.
Young also criticised the A$50 million profit threshold for the tax as too low because it would apply to miners after they produce only about 800,000 tonnes of iron ore, a relatively small tonnage.
"We are going to be well above this threshold," Young told reporters.
BC Iron mined about 600,000 tonnes of iron ore last year, and is aiming for around 3 million tonnes this year.
By comparison, Rio Tinto mined more than 200 million tonnes of ore, BHP Billiton 15 million tonnes and Fortescue around 40 million tonnes.
(sourced Reuters)
* Small Australian miners plea for mine tax changes
* Small miners say global miners will pay nothing
* Treasurer says big miners pay the most
CANBERRA, Nov 3 (Reuters) - A delegation of small- and mid-sized Australian mining company executives on Thursday called on Prime Minister Julia Gillard to abandon a proposed mining profits tax, saying the biggest firms would pay nothing and leave smaller ones to shoulder the burden.
The claim was immediately rejected by Treasurer Wayne Swan before the Australian Parliament.
Gillard earlier this year vowed to introduce a 30 percent tax on profits from iron ore and coal mining after holding closed-door negotiations with the nation's three biggest mining houses, BHP Billiton , Rio Tinto and Xstrata .
At the time, Gillard estimated the three companies would account for upwards of 90 percent of the estimated A$11 billion in revenue in the first three years.
Fortescue Metals Group founder Andrew Forrest, one of Australia's richest individuals, who made his fortune in iron ore mining, led the delegation, which also warned the tax threatened Australia's economic competitiveness and would stifle exploration.
"The government hasn't thought this through," Forrest told reporters.
Swan rejected the delegation's claim that big mining companies would not pay the new tax, and said companies reaping big profits from the mining boom would be legally required to pay their fair share.
"This tax does not discriminate against small miners. It will be paid predominantly by large miners," Swan told parliament, adding the comments by Forrest were "complete rubbish."
The government on Wednesday introduced legislation for the tax to apply to iron ore and coal miners making A$50 million or more in annual profits. It is scheduled to start July 1, 2012, though it is still uncertain if the government has the support it needs from three independent lawmakers to pass the bills.
Forrest, BC Iron managing director Mike Young, and Atlas Iron chief Dave Flanagan lobbied independent parliament members on Thursday to push their case for the government to rethink supporting the tax.
The executives released projections from accounting firm DBO claiming the tax would see small- and mid-tier miners pay an effective rate of 46 percent, while BHP Billiton and Rio Tinto would pay no tax due to the large deductions they would be afforded.
Forrest said the bigger mining houses would pay no tax under the plans for up to 25 years.
Young also criticised the A$50 million profit threshold for the tax as too low because it would apply to miners after they produce only about 800,000 tonnes of iron ore, a relatively small tonnage.
"We are going to be well above this threshold," Young told reporters.
BC Iron mined about 600,000 tonnes of iron ore last year, and is aiming for around 3 million tonnes this year.
By comparison, Rio Tinto mined more than 200 million tonnes of ore, BHP Billiton 15 million tonnes and Fortescue around 40 million tonnes.
(sourced Reuters)
Monday, March 7, 2011
Rio, Woodside criticise govt's carbon scheme
Mon, Mar 07, 2011 6:56 PM, By Reuters
Two of Australia's biggest resource firms launched an attack on government plans to price pollution, opening up a second political front for Prime Minister Julia Gillard over her plan to impose a fixed price on carbon emissions from July 2012.
With the public wary of the plan and the opposition labelling it "a great big new tax on everything", resource giants Rio Tinto Ltd and Woodside Petroleum Ltd called for strong protection from the new cost.
Climate Change Minister Greg Combet said details of compensation for industry were still being considered, and industry would be consulted on final details, but he said fewer than 1,000 companies would have to pay a carbon price.
"A carbon price is paid by the large organisations in our economy on every tonne of pollution that they emit. There's somewhat less than 1,000 entities that are likely to have a liability to pay a carbon price," Mr Combet told reporters.
The number of companies liable to pay for emissions is similar to the number covered by the government's former carbon trade plan, which was twice defeated in parliament and which offered free permits for up to 95 per cent of emissions for firms exposed to overseas export competition.
Global miner Rio Tinto and Woodside, the country's largest oil and gas producer, are among Australia's biggest carbon polluters, with combined emissions of almost 16 million tonnes.
Rio Tinto said the government must offer more generous compensation than under the former carbon scheme, while Woodside, said it should be exempt completely.
"Woodside believes the company's trade-exposed exports should be exempt from any price on carbon, given the absence of an international agreement on pricing greenhouse gas emissions," it said.
Rio Tinto said compensation proposed in 2009 was no longer reasonable for exporting industries, due to the lack of an international agreement to cut emissions.
"Businesses unable to pass a carbon price through to customers, which is most businesses competing in international markets, would simply have to absorb it," Rio's Australian managing director David Peever said.
"Depending on the magnitude of the carbon price, this may be manageable when market conditions are favourable and margins are healthy. But when the cycle turns down, it will inevitably be disastrous," Mr Peever wrote in the Australian newspaper.
Political pressures
Ms Gillard, whose predecessor Kevin Rudd was dumped by her ruling Labor Party last year after two failed attempts to address climate change, said polluters would pay a yet-to-be-determined fixed price, then move to a market-based system within five years.
The plan has put Ms Gillard's one-seat minority government under intense political pressure, with the majority opposition conservatives promising to reject it and warning consumers it will lead to higher electricity and living costs.
Underscoring the political risks, an Essential Media poll on Monday showed almost one in two Australians – or 48 per cent – opposed the carbon price plan, with overall support for Labor slipping a point to 47 per cent.
Only 35 per cent of voters backed Gillard's scheme, and 59 per cent of respondents believed she had broken an election promise not to immediately pursue a carbon price after last year's dead-heat election.
But in a rebuff to Rio Tinto and Woodside, most people were also opposed to compensation for heavy emitters, with 44 per cent opposed to any buffer for trade exposed industries and a massive 68 per cent opposed to help for power companies.
In contrast, 70 per cent wanted compensation for householders and small business, the poll showed, while 47 per cent of poll respondents wanted action on climate change as soon as possible, compared to 24 per cent who wanted to delay action.
The Australian Greens, who help support Labor in the lower house and have a strong voice in the upper house, said the claims of Rio and other "big polluters" should be rejected by the government.
"We should be looking at the real world and when it comes to compensation, it shouldn't be claims by these big corporations," Party leader Bob Brown told local television.
Mr Brown said compensation claims by emissions-heavy industries should be assessed by an independent arbiter or review process, to ensure corporates did not use their political influence to escape costs and leave taxpayers to make up the shortfall.
Rio has estimated the company's annual carbon tax bill would be about $154 million if the tax was set at $20 a tonne for every tonne of carbon pollution.
Rio's export operations would have faced an additional $3 billion cost over 10 years from a carbon emissions trade scheme proposed in 2009 and which offered almost $50 billion in compensation to industry and mining over the first decade.
Mr Combet said he expected Australia's new scheme would be internationally compatible once it moved on from the fixed price, in three to five years, and said there was considerable international momentum to cut global emissions.
Shares in Rio Tinto closed 1.6 per cent lower at $84.15, against a 1.36 per cent drop in the benchmark index.
With the public wary of the plan and the opposition labelling it "a great big new tax on everything", resource giants Rio Tinto Ltd and Woodside Petroleum Ltd called for strong protection from the new cost.
Climate Change Minister Greg Combet said details of compensation for industry were still being considered, and industry would be consulted on final details, but he said fewer than 1,000 companies would have to pay a carbon price.
"A carbon price is paid by the large organisations in our economy on every tonne of pollution that they emit. There's somewhat less than 1,000 entities that are likely to have a liability to pay a carbon price," Mr Combet told reporters.
The number of companies liable to pay for emissions is similar to the number covered by the government's former carbon trade plan, which was twice defeated in parliament and which offered free permits for up to 95 per cent of emissions for firms exposed to overseas export competition.
Global miner Rio Tinto and Woodside, the country's largest oil and gas producer, are among Australia's biggest carbon polluters, with combined emissions of almost 16 million tonnes.
Rio Tinto said the government must offer more generous compensation than under the former carbon scheme, while Woodside, said it should be exempt completely.
"Woodside believes the company's trade-exposed exports should be exempt from any price on carbon, given the absence of an international agreement on pricing greenhouse gas emissions," it said.
Rio Tinto said compensation proposed in 2009 was no longer reasonable for exporting industries, due to the lack of an international agreement to cut emissions.
"Businesses unable to pass a carbon price through to customers, which is most businesses competing in international markets, would simply have to absorb it," Rio's Australian managing director David Peever said.
"Depending on the magnitude of the carbon price, this may be manageable when market conditions are favourable and margins are healthy. But when the cycle turns down, it will inevitably be disastrous," Mr Peever wrote in the Australian newspaper.
Political pressures
Ms Gillard, whose predecessor Kevin Rudd was dumped by her ruling Labor Party last year after two failed attempts to address climate change, said polluters would pay a yet-to-be-determined fixed price, then move to a market-based system within five years.
The plan has put Ms Gillard's one-seat minority government under intense political pressure, with the majority opposition conservatives promising to reject it and warning consumers it will lead to higher electricity and living costs.
Underscoring the political risks, an Essential Media poll on Monday showed almost one in two Australians – or 48 per cent – opposed the carbon price plan, with overall support for Labor slipping a point to 47 per cent.
Only 35 per cent of voters backed Gillard's scheme, and 59 per cent of respondents believed she had broken an election promise not to immediately pursue a carbon price after last year's dead-heat election.
But in a rebuff to Rio Tinto and Woodside, most people were also opposed to compensation for heavy emitters, with 44 per cent opposed to any buffer for trade exposed industries and a massive 68 per cent opposed to help for power companies.
In contrast, 70 per cent wanted compensation for householders and small business, the poll showed, while 47 per cent of poll respondents wanted action on climate change as soon as possible, compared to 24 per cent who wanted to delay action.
The Australian Greens, who help support Labor in the lower house and have a strong voice in the upper house, said the claims of Rio and other "big polluters" should be rejected by the government.
"We should be looking at the real world and when it comes to compensation, it shouldn't be claims by these big corporations," Party leader Bob Brown told local television.
Mr Brown said compensation claims by emissions-heavy industries should be assessed by an independent arbiter or review process, to ensure corporates did not use their political influence to escape costs and leave taxpayers to make up the shortfall.
Rio has estimated the company's annual carbon tax bill would be about $154 million if the tax was set at $20 a tonne for every tonne of carbon pollution.
Rio's export operations would have faced an additional $3 billion cost over 10 years from a carbon emissions trade scheme proposed in 2009 and which offered almost $50 billion in compensation to industry and mining over the first decade.
Mr Combet said he expected Australia's new scheme would be internationally compatible once it moved on from the fixed price, in three to five years, and said there was considerable international momentum to cut global emissions.
Shares in Rio Tinto closed 1.6 per cent lower at $84.15, against a 1.36 per cent drop in the benchmark index.
Woodside shares sank one per cent to $42.42. (sourced:Businessspectator)
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