FMG pushes ahead with MRRT challenge

FORTESCUE Metals Group has made good on its plans to lodge a constitutional challenge against the Minerals Resource Rent Tax in the High Court of Australia.
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Nev Power

Kristie Batten

The challenge was lodged after months of legal advice and comes a little more than a week before the MRRT begins.

FMG chief executive officer Nev Power said the company was challenging the tax on the grounds that it discriminated between the states contrary to section 51 (ii) of the Constitution; curtailed state sovereignty contrary to the Melbourne Corporation principle; gave preference to one state over another in contrary to section 99 of the Constitution; and restricted a state’s ability to encourage mining contrary to section 91 of the Constitution.

“We believe we have a good case for challenging the MRRT on constitutional grounds and we look forward to the resolution of these important issues by the High Court,” he said.

FMG first flagged a potential challenge back in March, when the MRRT legislation passed the Senate and Power said in April it expected to launch proceedings within weeks.

FMG director of development Peter Meurs told media in March that the company was prepared to pay more tax.

“We’re not against a tax – we just don’t like a tax that’s like this one.”

Meurs said the tax favoured big players and disadvantaged smaller companies starting out.

“We’re in a better position than most but we think it’s discriminatory,” he said.

FMG chairman and founder Andrew Forrest has arguably been the most outspoken critic of the tax, despite admitting that the company wasn’t likely to pay MRRT.

Wayne Swan’s office had not responded to at the time of publishing.

Western Australian Premier Colin Barnett has previously expressed support for the challenge, but rather than join it, the state would reportedly be prepared to give evidence in the case.

BC Iron managing director Mike Young told MNN this morning that his company wouldn’t be involved in the legal proceedings.

“If we’re called upon to write testimony, of course we will,” he said.

“I think it’s pretty important to keep in mind that it’s a legal challenge about the validity of the tax, so everything that’s been said in the past is still relevant and everyone stands by it, but this particular challenge is a legal issue and FMG have every right under the laws of the land to challenge what they see as an unfair and not legal tax.”

Another opponent of the tax, Atlas Iron chairman David Flanagan, was unavailable for comment.