Mining chiefs push for Australian PM to ditch super-tax plan

TWO leading mining industry figures cranked up the pressure on the Australian government yesterday to reverse its controversial super-tax plans on mining company profits.

Tom Albanese, chief executive of global miner Rio Tinto, said his company would be forced to look at investing outside the country if Australian prime minister Kevin Rudd pushed ahead with the 40 per cent tax on so-called super profits.

Speaking on the sidelines of an African economic conference in Paris, Albanese said: "I fear under the proposed super tax, conditions for investment will be reversed and we will be put in a position where to protect our shareholder interest we'll be forced to look elsewhere."

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More than A$20 billion (11.7bn) of new resource investment in Australia has already been put on hold by global miners due to the tax, set to start in 2012.

Albanese added: "I urge Australian policy-makers to revisit their proposed super tax and recognise it's not in the best interest of all Australians to create an environment of sovereign risk or a disincentive to invest in Australia."

His comments came after Rudd denied speculation that agreement with the miners was close, and as BHP Billiton chairman Jac Nasser wrote to his shareholders condemning the lack of consultation on the super tax.

Nasser claimed that the proposed tax had major flaws and would have a significant impact on the resources industry.

He wrote: "For reasons we do not understand the government chose not to undertake consultation on the nature and design of the proposed super tax prior to its announcement." He added this went against the grain of traditional consultation between the mining industry and Australian governments.

Nasser told BHP's shareholders that the company was not against tax reform but that it was wrong to fundamentally "change the rules of the game on existing projects, both as a matter of fairness, and so as to protect Australia's reputation as a stable place for investment".

The Australian conservative opposition has said it would kill the tax if it wins the next election, expected in October.

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