BHP Billiton Ltd and Rio Tinto Group are set to pay higher taxes in Australia after Ms Julia Gillard’s Labor party won support to form a minority government, following the closest election in 70 years.

As per report BHP and Rio and rival iron ore and coal producers will pay AUD 10.5 billion more in tax in the first two years of the 30% levy proposed by Ms Gillard.

Mr Peter Chilton a fund manager at Constellation Capital Management Ltd who holds shares in both BHP and Rio said that “At this stage, it only includes coal and iron ore but who knows if the scope changes or the rates change.”

The issue of a possible increase to the tax rate casts a bit more doubt on the mining sector.

(Sourced from Bloomberg)