Mining powerbrokers call for Gillard to drop MRRT

MINING executives across the board have called for the Gillard government to drop the Minerals Resource Rent Tax (MRRT), according to a new report released today.
Mining powerbrokers call for Gillard to drop MRRT Mining powerbrokers call for Gillard to drop MRRT Mining powerbrokers call for Gillard to drop MRRT Mining powerbrokers call for Gillard to drop MRRT Mining powerbrokers call for Gillard to drop MRRT


Staff Reporter

The report, Mining Business Outlook 2010-11 by operational management consultancy Newport Consulting, draws on a series of interviews with 23 mining executives.

The report found 77% of those interviewed called for the government to drop the MRRT altogether.

Newport associate director and mining specialist Mark Bagster said the report suggested that despite modifications to the new tax, there was a unanimous call to drop the tax.

“The industry is concerned about whether future legislation will represent the latest modifications,” he said.

“As some mining executives point out, the legislation will not be enacted until after the federal election and given the way the tax has been handled to date they are worried and are left with a sense of distrust as to what the final result might be.”

Bagster also noted concerns raised by mining executives about the Labor Party’s recent preference deals with the Greens and the impact of this on the tax.

The report also found there was a growing level of optimism over the state of the economy with 57% of mining executives interviewed saying they were ‘somewhat optimistic’ of the state of the economy over the next 12 months while 37% are ‘very optimistic’.

However, according to the report, the growing levels of optimism aren’t translating to an increase in spending, with 57% of mining executives saying that spending would remain limited this financial year.

Mining executives said the dropping of the tax would allow the mining companies to match their otherwise optimistic view of the economy with appropriate levels of investment spending.

The report also showed the key issues keeping mining executives awake at night were safety (32%) followed by the future state of the country’s infrastructure (18%) and the ability to attract overseas investment (18%).

Cost control and management is a clear focus area for 2010-11 with more than 50% of interviewed mining executives saying they were focusing on reducing or closely managing their organisation’s cost base.

Meanwhile, 44% of mining executives said improving operational efficiency through increasing production and utilisation of resources and reducing machinery downtime and waste at minesites were key priorities in 2010-11.

The research was based on one-on-one, in-depth interviews with 23 leading mining executives from junior right through to large resource companies.

Of the mining executives interviewed, 48% came from coal companies, 17% from base metal companies, 13% from transport companies, 9% from gold companies, 9% from industrial companies and 4% from manganese companies.