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With hedge fund manager, CNBC regular and long-time veteran of the Russian markets Tim Seymour at the helm, Emerging Money (http://www.emergingmoney.com) provides education, trading analysis and comprehensive views of emerging markets around the world. As economies in the BRIC group and beyond... More
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  • Miners ready to dump Australia tax deal 0 comments
    Oct 21, 2010 4:48 PM | about stocks: BHP, VALE

    The world's biggest mining companies are reportedly gearing up to go back to war over developments in the controversial Australian mining tax environment. Until recently, companies like BHP Billiton BHP, Rio Tinto RIO and Xstrata XSRAY thought they had a deal in which they would receive compensation from the federal government in exchange for paying higher royalties to Australian state governments.

    However, newly installed prime minister Julia Gillard has reportedly altered the arrangement to only include legacy taxes put in place before last May -- when the sudden threat of a "super profit" tax frayed relations between these companies and Canberra. Gillard had initially agreed to cut her predecessor Kevin Rudd's 40% tax on mining company profits to 30% to mollify the industry.

    However, state governments -- Western Australia in particular -- now seem focused on raising their local tariffs on mining companies in order to recoup the money one way or another. No word yet on what the miners may do to protest the current state of affairs. Previous moves included various threats to postpone or cancel massive development projects in Australia to concentrate on more dependably mining-friendly countries.

     

    Disclosure: no positions
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