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Australia 'nearly there' on mining deal

Jul 01 2010 10:09

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BHP BILLITON PLC [JSE:BIL]

Last traded 372.76
Change 1.85
% Change 0.00
Cumulative volume 784056
Market cap 796.28bn

Last Updated: 28/07/2014 at 03:42. Prices are delayed by 15 minutes. Source: McGregor BFA

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Sydney - Australia is close to a compromise deal on the proposed 40% mining tax that contributed to the downfall of ex-prime minister Kevin Rudd, after the government made concessions on key issues, a report said Thursday.

Citing people close to the talks, Melbourne newspaper The Age said fresh negotiations between the heavyweight mining industry and the week-old administration of Julia Gillard were nearing a breakthrough.

A doubling in the rate at which the tax kicks in from 6% to 12% was chief among the concessions offered by the government, the report said, with ground also given on applying the levy to existing projects.

"It was unclear... what deal had been struck on the headline (40%) rate, but the government is believed to have also given ground on this point, with people with knowledge of the talks saying the two sides were 'nearly there' on an agreement," The Age said.

The tax reforms, announced in May, helped trigger Rudd's demise as a furious campaign by mining firms affected his popularity, prompting Gillard's quickfire leadership challenge last week.

Gillard, who is Australia's first female prime minister and is facing elections within months, acted quickly to resolve the impasse after taking power, calling on miners to end their campaign and return to the negotiating table.

In return, she cancelled government advertising and promised "genuine consultation" with the powerful mining industry, whose raw materials exports to Asia are central to Australia's recession-beating prosperity.

Deputy Prime Minister Wayne Swan declined to confirm the reports of a compromise, saying talks were "constructive, but they've got some way to go as yet".

"I can't put the timeframe on those discussions, but certainly it's our wish that we resolve this matter as soon as we practically can," Swan told commercial radio. "The most important thing is to get the right result."

Mining stocks surged following the report, with BHP Billiton [JSE:BHP] bouncing 1.55% and Rio Tinto gaining 1.81%, though both remained in the red in a broadly lower market.

 - AFP

bhp billiton  |  rio tinto  |  julia gillard  |  kevin rudd
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