Government may make further concessions to iron ore miners

The claim came from the Chamber of Minerals and Energy of Western Australia, after it met with Government representatives on July 5th.
It said that Federal Resources Minister Martin Ferguson has agreed to consider requests to provide tax rebates for exploration costs and to exempt the burgeoning magnetite sector from the tax.
The Chamber's chief executive, Reg Howard-Smith, reportedly said, "The minister indicated these issues would be included in the terms of reference," establishing parameters for modifying the tax under a government-backed panel.
Most of the minerals industry bodies have issued statements saying the Mineral Resources Rent Tax (MRRT) is broadly consistent with the industry’s underlying principles of tax reform: international competitiveness, sovereign risk and competitive neutrality across company size, commodity mix and ownership structure.
However, there are still some key components that the industry is pushing for, especially incentives for exploration and ensuring that changes to the treatment of State royalties are not used by Governments as an opportunity to increase the rate of royalties.
The South Australian Chamber of Mines and Energy (SACOME) said in a statement that in the absence of the exploration rebate as previously proposed, “the most appropriate lever to encourage investment in mineral exploration is a flow-through shares scheme.”
The State and Federal Government’s came under attack on July 7th from the NSW Minerals Council. Saying that Governments were “missing in action”, the Council’s CEO Dr Nikki Williams said they had not confirmed what share of the regional infrastructure fund from the MRRT will be allocated to NSW.
“The silence on this issue from Canberra and Macquarie Street thus far has been deafening. Why should our mining regions be worse off because of a perception that NSW isn’t a resource State?” said Williams.
Williams will be in Singleton on July 8th to brief business and community leaders on the new tax and to hear concerns about how it may impact on the Hunter region.
“NSW will be one of 3 heavy lifters generating these massive new tax revenues for the Australian government. In NSW, coal accounts for 90 per cent of the mineral production and export value,” Williams said.
“NSW produces 42 per cent of Australia’s black coal and has a 40 per cent share of Australian coal exports. That’s why it is imperative that this State gets an appropriate and proportionate share of the $6 billion raised through the MRRT for regional infrastructure improvements.”
Meanwhile, Treasury boss Ken Henry has distanced himself from the Gillard Government's new mining tax, saying it will be worse for jobs and investment than what it replaced.
Under the new deal the mainly smaller companies that lose money or make small profits will be required to pay royalties. Under the arrangement proposed by Dr Henry's tax committee, they would have had royalties refunded.
Appearing before a Senate committee, Dr Henry said the original plan would have boosted employment and investment because it would have replaced a distorting tax, royalties, with a tax that was neutral in its effect on the economy.