BHP Billiton’s share price rose above $25 for the first time in a year earlier this week, and the miner is expected to deliver a large dividend this financial year as a result of surging coal and iron ore prices.
But the miner, and fellow giant Rio Tinto, are still under threat from a proposed tax hike from WA Nationals leader Brendon Grylls.
On top of other taxes and royalties, Rio and BHP currently pay a 25c per tonne production tax, which Grylls is proposing be lifted to $5 a tonne, generating an additional $7.2 billion in tax revenue for the state over the next four years.
The Minerals Council of Australia this week stepped in to commission a report which said the tax would cost 7200 jobs.
Rio and BHP, who have both seen their share prices rise more than 30% this calendar year, are benefitting significantly from solid growth in the iron ore price, and in thermal and metallurgical coal prices.
But both miners have been seriously opposed to the massive tax hike proposal.
The Minerals Council this week said the report from Deloitte Access Economics found the proposal would see the economy shrink by $2.9 billion a year, as a result of a tax that raised $2.3 billion a year.
“In the end it won’t raise any extra money for WA because most of the money will end up in other states by virtue of our GST distribution arrangements,” MCA chief executive Brendan Pearson said.
“It’s a net lose-lose for WA.”
Grylls, however, dismissed the report as the Council “paying for misleading analysis of the policy”.
The Nationals leader stepped up his campaign for the tax, saying when the iron ore price was down around US$38 a tonne last year, Rio was confident jobs, growth and investment were not at risk.
“Today the price is above US$70 and a report funded by the Minerals Council concludes jobs will be lost [if a $4.75 taxation increase is made],” Grylls was quoted by the ABC.
“It doesn’t stand to reason.
“I would just hope the people of Western Australia see the campaign for what it is, which is based on misinformation and trying to confuse people into not supporting a fair return for the iron ore sector.”