China Iron & Steel Association secretary general Shan Shanghua told Reuters that the country’s steelmakers, along with its manufacturers of automobiles and appliances, will not accept the rising costs borne by the tax.
While the industry group represents 78 of the country’s key steel mills, CISA has failed in previous attempts to curb iron ore price hikes from the major mining companies.
Shan reportedly said China would use an “import agency system” to put an end to iron ore spot pricing at ports but provided few details.
The Policy Transition Group, led by former BHP Billiton chairman Don Argus, will start its private meetings with mining companies over the Minerals Resource Rent Tax next week.
The MRRT aims to generate $10.5 billion of tax revenue from the coal and iron ore sectors within its first two years starting July, 2012.
But there are question marks over whether the watered-down version of the previous super-profits tax proposal will hit this tax target.
“They are estimates based on assumptions of a lot of different variables,” BDO tax manager Larras Moore recently told ILN.