Mining and Heavy Industries

Iron ore miners bristle at continued tax talk

Iron ore stockpiles at Port Hedland. Photo: BHP Billiton

The mining sector has continued its ardent opposition to a proposed $4.75 a tonne tax increase to Rio Tinto and BHP Billiton in Western Australia.

Barnaby Joyce, the deputy prime minister and federal leader for the National Party of Australia, upset the industry this week when he didn’t completely dismiss the proposal from his WA counterpart, WA Nationals leader Brendon Grylls.

Grylls wants to increase the 25c per tonne rental payment for iron ore paid by Rio and BHP to $5 a tonne, in a move aimed at raising $7.2 billion over four years.

Malcolm Turnbull has called the idea “troubling,” and WA’s Liberal Premier Colin Barnett has also dismissed the concept.

But Joyce ruffled miners’ feathers with his comments on ABC’s Insiders program on Sunday.

While the Nationals leader did say “a new tax is usually not going to help things get ahead,” he said he does “understand what [Grylls] is trying to do”.

“The good thing about Brendon Grylls is he’s always trying to get a better deal for people in rural and regional areas,” Joyce said. “I understand what he is trying to do. [He is] trying to get a better return. He did that with royalties to regions. That’s a policy we’ve tried to incorporate everywhere.”

Minerals Council of Australia boss Brendan Pearson rejected the idea that Gryll’s plan would in any way get “a better deal” for rural communities, however.

“The adverse impact of the tax has clearly been underestimated in some quarters,” Pearson was quoted by the AFR.

“It will not deliver a better deal for Mr Grylls’ constituents. A bad idea is always a bad idea. The Grylls tax proposal is a bad idea and should be treated as such.”

The events come a week after Rio Tinto’s chief executive Jean Sebastian Jacques labelled the tax threat the company’s biggest risk.

It also comes after federal resources minister Matt Canavan said the tax would cost Australia investment and jobs.

“I have some grave concerns that the proposal damages our reputation as a stable destination for attracting investment and jobs,” Canavan said.

“You need to curry favour over a long period of time with investors. Nasty surprises are not a good idea.

“This is considered a nasty surprise for the industry and it’s something we have to be concerned about.”

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