Reuters reported that Australia’s mining firms have accepted that 30% resource tax is inevitable and are now discussing its implementation and seeking to minimize their liability.

Mr Martin Ferguson resource minister of Australia said that global miners BHP Billiton, Xstrata and Rio Tinto were involved in designing the new tax and have signed off on it but smaller miners such as Fortescue Metals Group say it will penalize emerging companies.

Representatives of some of these firms who met Mr Ferguson and who form the backbone of exploration said that they still opposed the tax adding it remained unworkable for them and questioning the AUD 50 million profit thresholds.

Mr Simon Bennison CEO of the Association of Mining and Exploration Companies which mainly represents smaller firms said that “We don’t see it coming in the current form. We’ve come into the consultation process with a very serious view to making sure that this tax impost has minimal impact on the industry.”

Mr Ferugson said that the industry had broadly accepted it as a given but was willing to entertain some tweaking. I think the industry is now focused on the fact that the government is clear in its intent to put this tax in place. Their job is to try and frame the issues which go to the application of the tax. Their job is to try and have an impact on the nature of where the tax comes in and their potential liability.

He said that clearly the issue of the AUD 50 million threshold has been raised. That’s a matter we will have to discuss in due course with the Treasurer. The government wants to finalize the tax design by the end of the year, so legislation can be introduced into parliament in 2011. However, any laws are unlikely to pass until after July 2011 when the government and Greens will hold a combined majority in the upper house Senate. The government has set an October 28 deadline for submissions from mining companies on the new tax.

(Sourced from Reuters)