The Australian Senate approved today a mining legislation that imposes a 30% tax on coal and iron ore miners, allowing the government to take a larger part of profits from a mining boom pushed by Chinese and Indian demand for raw materials.
The new tax, which will become law on July 1, is expected to harvest about US$12 billion in taxes within three years from mining giants such as BHP Billiton, Rio Tinto and Xstrata.
According to The Sydney Morning Herald, passing the legislation is an achievement for Prime Minister Julia Gillard and her minority government. Her predecessor, Kevin Rudd, was overthrown mainly because of the powerful mining companies campaign against a broader 40% tax that he initially proposed.
The Association of Mining and Exploration Companies, which represents small and mid-size miners, condemned the levy.
“The tax is simply unfair to smaller emerging miners, and is so complex that the administrative and compliance burden on industry and government will be extreme,” association chief executive Simon Bennison said.
“The introduction of this anti-competitive legislation in Australia will only further push investment capital offshore, and change our reputation as a safe place in which to invest.”