Melbourne (Platts)--22Nov2012/445 am EST/945 GMT
The South Australian Chamber of Mines and Energy said Thursday it would strongly oppose any moves by the federal government to change the current agreement which allows royalty increases to be offset against the Mineral Resources Rent Tax. The MRRT came into effect at the start of July and imposed a 30% tax on miners with profits of over A$75 million ($77 million)/year from iron ore and coal production. It was expected to raise $10.6 billion over three years. However, shortly after its implementation, commodity markets began to wane due to lower demand from China. High production costs in Australia also pressured iron ore and coal prices -- Platts data has shown prices have fallen off by around 30% since August -- and as a result no revenue has been generated by the MRRT. "We are deeply disturbed by reports the federal government is planning to alter the agreement that allows for royalty increases to be offset against a company's MRRT obligations, by limiting the amount of refunds they can claim," SACOME CEO Jason Kuchel said. "The federal government made a deal, signed off on it with industry, and is now looking to move the goalposts as it gets increasingly desperate for revenue," he added.Article continues below...Sign up to Metals DailyPlatts Metals Daily offers prices, news and analysis for the aluminum, copper and molybdenum value chains. It contains hundreds of metals prices across base, minor, light and precious metals assessed by editors globally. This detailed report will help you monitor global events and quickly spot opportunities or potential pitfalls as well as bring you aluminum and copper price and news coverage. Daily prices and news for molybdenum are also covered to deliver critical insights.
The South Australian Chamber of Mines and Energy said Thursday it would strongly oppose any moves by the federal government to change the current agreement which allows royalty increases to be offset against the Mineral Resources Rent Tax. The MRRT came into effect at the start of July and imposed a 30% tax on miners with profits of over A$75 million ($77 million)/year from iron ore and coal production. It was expected to raise $10.6 billion over three years. However, shortly after its implementation, commodity markets began to wane due to lower demand from China. High production costs in Australia also pressured iron ore and coal prices -- Platts data has shown prices have fallen off by around 30% since August -- and as a result no revenue has been generated by the MRRT. "We are deeply disturbed by reports the federal government is planning to alter the agreement that allows for royalty increases to be offset against a company's MRRT obligations, by limiting the amount of refunds they can claim," SACOME CEO Jason Kuchel said. "The federal government made a deal, signed off on it with industry, and is now looking to move the goalposts as it gets increasingly desperate for revenue," he added.
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Platts Metals Daily offers prices, news and analysis for the aluminum, copper and molybdenum value chains. It contains hundreds of metals prices across base, minor, light and precious metals assessed by editors globally. This detailed report will help you monitor global events and quickly spot opportunities or potential pitfalls as well as bring you aluminum and copper price and news coverage. Daily prices and news for molybdenum are also covered to deliver critical insights.
Kuchel said it was a wrong time to make changes that would pressure the iron ore and coal industries, as costs were rising, commodity prices were falling and questions about Australia's sovereign risk were at the forefront of investors' minds. The federal government should instead be focusing on the long term viability of the resources industry and with South Australia, in particular as an emerging iron ore state, the government should be helping to attract more investment not deterring it, SACOME said.--Marnie Hobson, marnie_hobson@platts.com --Edited by Haripriya Banerjee, haripriya_banerjee@platts.com
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