Caterpillar Inc., the world’s largest manufacturer of construction equipment, said the proposed 40 percent tax on profits of Australian mining operations, the company’s sales in the country hurt. “Together with our dealers and customers in the region, we are concerned about the potential impact of the proposed change in tax policy will have on the production of mining equipment and our sales in Australia,” Caterpillar spokeswoman Kate Kenny said.
BHP Billiton Ltd., the world’s largest mining company, Xstrata Plc, Rio Tinto Group and Peabody Energy Corp. have said they are reviewing, suspending or delaying Australian projects following the super-profit tax on mining companies. The country is the largest exporter of iron ore and coal.
Caterpillar has had no cancellations or delays eye, Kenny said. The Peoria, Illinois-based manufacturer “opposes any significant tax increases that the viability of future investment in Australian mining and threatens the company’s long term competitiveness will be affected,” she said.
Xstrata earlier this month said it terminated expenditure on projects valued at 6.6 billion U.S. dollars (5.6 billion U.S. dollars) in Australia.
The proposed tax would be imposed on undertakings source ‘return that the interest rates on long-term bonds Australian, who is now about 6 percent excess, and are offset by a credit for royalties paid to the states, according to government documents.
Prime Minister Kevin Rudd, is under pressure to water the plan could increase the tax threshold to more than 10 percent of 6 percent, the Herald Sun reported 06.11.
Profit Forecast
Caterpillar raised its profit forecast in April 2010 on growth in emerging markets, energy markets and the strong order rates for miners. The company said it intended to increase production capacity for large trucks, because the mining models were sold out for some 2010 and some customers said they were expansion and new mine development to accelerate.
Caterpillar rose 77 cents, or 1.3 percent, to $ 61 at 4:15 p.m. New York Stock Exchange composite trading. The shares gained 7 percent this year.
source:bloomberg
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