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Australia mines minister: Carbon, mineral ‘super’ tax won’t deter investors. India begs to differ

Australia’s Minister for Resources, Martin Ferguson, has rejected reports in the Indian press that the carbon tax and mineral resources rent tax will deter foreign investment as it pushes up the price coal imported from Australia.

Australia’s controversial carbon pricing scheme passed parliament last week. The laws – fiercely opposed by the country’s mining sector which says it will lead to more than 20 mine closures and cost thousands of jobs – will force Australia’s top 500 polluting companies to pay a tax of $24.50/tonne on carbon emissions from July 2012.

On top of the carbon tax set to kick in mid-2012, Australian miners also have to contend with the new minerals resource rent tax (MRRT) set at an effective 22.5% rate on the so-called super-profits of the extractive industries.

The Brisbane Times reports Ferguson said after three days of talks with Indian mining companies and government officials: “Everybody I’ve spoken to in India is looking to invest in Australia. They don’t see the MRRT and the carbon tax as a barrier.”

India’s need for overseas coal is due to grow massively in the next five years as it tries to bring electricity to the 400 million people who live without it. Local papers say the carbon tax would lead to an increase of $0.01 per kilowatt hour for power plants using Australian coal.