The Australian newspaper reported today that BHP Billiton Ltd., Rio Tinto Group and Xstrata Plc have called a meeting as they believe discarding a mining tax contract brokered with Prime Minister Julia Gillard.
The newspaper reported that Gillard's decision not to pay compensation mining companies intended for higher state royalties may scupper the deal confirmed in July.
According to a recent report, Xstrata, a mining giant, will recommence an important project after the declaration of the resources super profits tax. The tax was announced by Prime Minister Julia Gillard this morning. Xstrata revealed that after the declaration they decided to restart the Ernest Henry mine expansion.
The Government has failed to give any indication of addressing their concerns about the new resources super profits tax, revealed three major mining Companies following a meeting in Canberra, today. As the Prime Minister has been facing pressure from the Opposition to scrap the 40% tax on super profits, the stand-off between the Government and industry is still continuing.
With the Prime Minister promising that he would not be intimidated by mining companies, Xstrata's verdict to hang up mining projects has activated further squabbling in Parliament over the Government's new profits tax.
XSTRATA Chief Executive, Mick Davis, has supported Rio Tinto Chief, Tom Albanese's claim that the proposed 40% mining tax is the greatest concern for the miners.
"Sovereign risk concerns about Australia may once have seemed absurd. Sadly they are foremost on every mining company's board agenda," Mr. Davis.
He wrote to the London Financial Times to express his agreement over the remarks of Albanese.