Gillard to resist calls to take more from miners
The Gillard government will stare down calls for a rewrite of the mining tax from the Greens and independents, despite growing concern within Labor's backbench over its failure to meet its revenue forecasts, The Australian reports.
Negotiations will continue with the states over changes to the royalties regime aimed at taking away the states' ability to hike the tax at the expense of the commonwealth, although senior government figures are pessimistic about achieving a resolution before the election.
Resources Minister Martin Ferguson moved to quell a threatened revolt from big miners over calls for the minerals resource rent tax to be redesigned after it raised just $126 million in its first six months - for a contribution of $88 million to the budget, because miners can use their MRRT payments to reduce their company tax - compared with a $2 billion forecast for 12 months.
After the Minerals Council of Australia took advertisements declaring the industry had paid $130bn in tax since 2000 and that "enough is enough" on talk of increasing the taxes resources companies pay, Mr Ferguson told parliament: "The government has not walked away, in any way, from its agreement entered into with the mining industry on July 2, 2010, and announced publicly . . . more importantly, as the Prime Minister and the Treasurer have clearly stated . . . we have no intention of walking away from the agreement."
Mining tax may reach $750 million
The AFR reports that Rio Tinto, BHP Billiton and their iron ore joint venture partners may be liable for about $750 million of minerals resource rent tax payments for the financial year if the iron ore price remains at today’s levels, citing UBS analyst Glyn Lawcock.
The government last week said it had collected just $126 million in MRRT payments in the first half, with BHP understood to be among those that paid the tax.
But the iron ore price, which averaged $US113 a tonne in the first quarter and $122/t in the second, is now trading at $155.10/t on the spot market, placing it above the likely threshold at which the largest miners will need to pay the tax.
“Clearly, if the iron ore price holds we would be expecting a material step change in the contribution of MRRT,” Lawcock said.
“I think if you look at the next six months, if iron ore prices stay where they are, I would expect the MRRT to get close to $750 million in the financial year.”
Fortescue first-round bids due Friday
The Australian Financial Review understands that indicative bids for a minority interest in Fortescue Metals Group’s rail and port assets are due tomorrow after a three-month marketing period.
While the usual list of pension and sovereign wealth funds familiar with investing in Australian assets have picked over the deal, the wildcard may come from offshore.
China’s State Grid is understood to have taken a look, although whether it turns up on bid day remains to be seen. State Grid is cashed up and made its first move into Australia late last year, when it took a stake in South Australian power company ElectraNet.
Fortescue investors expect a sale and have already started thinking about the $US3-$4 billion proceeds.