SYDNEY (Reuters) – The chairman of BHP Billiton Ltd / Plc (BHP.AX) (BLT.L) on Monday called for the proposed tax reform targeting Australian mining companies to apply only to new projects. In a sign that the mining Australia’s biggest company can begin to reach round – if reluctantly – the government planned 40 percent “super tax” on profits, President Jac Nasser said BHP had “no problem with a revision of the tax system” as long as was carried out around sound principles.
“Any reform proposal should apply only to new investments, not existing investments,” said Nasser.
Under the current proposal by the Government, Australian projects already in the pipeline – some prize tickets to tens of billions of dollars – would be responsible, together with future investment. BHP said the tax on profits in Australia would rise to 57 percent from 43 percent.
In a letter to BHP shareholders, BHP said Nasser now need a deeper study of the consequences before making future investment decisions.
Australian Prime Minister Kevin Rudd has so far been opposed to making concessions on the tax, which is aimed at helping to fund social programs. Some miners have compared the tax to a near-nationalization of the sector.
Nasser, in his first public comments on the proposal since he became chairman in March, also said the stability and competitiveness in the tax system in Australia to date have allowed mining companies to billions of dollars to invest in new projects, despite exposure to adverse movements in commodity prices.
“The proposed super-essential loads, and abruptly changing the unfair rules of the game,” said Nasser.
The former Ford Motor (FN) president also warned that the independent mining service companies, providing everything from staffing to heavy equipment to food and lodging, would also suffer the burden.
Other Australian miners, including Rio Tinto (RIO.AX) and Xstrata (XTA.L), producing everything from coal to copper are forced to rethink new projects in the face of the tax – the stiffest in the world mining companies – to starting in 2012.
source:reuters
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