Source: The Mining Weekly               Date: 15 June, 2011

Australia moved closer to introducing a contentious 30% mining tax being eyed by other countries, releasing draft laws and seeking reaction from resource companies to legislation expected to be passed later this year. The government unveiled the mining tax over a year ago but modified its plan before last August' s elections after global miners including BHP Billiton, Rio Tinto, and Xstrata launched a public campaign against it. Big miners and minority lawmakers are now broadly supportive and the legislation is expected to pass parliament and take effect on July 1, 2012.

Treasury forecasts the tax will reap AUD7.7 billion in its first two years, helping the budget return to surplus by fiscal 2012/13. "These reforms will ensure Australians receive a better return from their non-renewable resources and will help strengthen our economy through increased superannuation, new and better infrastructure, and business tax cuts," Treasurer Wayne Swan said in a statement last week.

Greens lawmakers who will control the balance of power in the upper house Senate from July this year said they would try to harden the tax to reap more from miners, but would not threaten passage of the legislation by insisting on changes. Private consultations with miners over the past few months helped iron out differences over the tax, which applies only to coal and iron ore, but some sticking points remain before the bills go to parliament, after a second drafting round.

Other resource countries are also looking closely at following suit, including Tanzania, which is considering introducing a mining super profit tax closely aligned to Canberra's resource rent tax. Peru's newly elected president, Mr. Ollanta Humala, has also flagged higher mining taxes.