India iron ore giant NMDC says still keen on Australia despite new taxes, labour costs

The head of India’s biggest iron ore miner says Australia’s reputation as a very favorable place to invest has not been dented by the combination of a carbon tax, mining tax and escalating labour costs as the $22 billion group prepares to establish a local mining arm.

The West Australian reports National Mineral Development Corporation chairman Mr Rana Som said that the state owned company had chosen to build a presence in Australia because of the comparative political stability it offered, in contrast to developing countries where policies were more liable to change. reported in November Australia’s carbon tax 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.

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. reported in November that in contrast to expanding coal and iron ore interests in the rest of the world India is not making headway with potash buys abroad. A delegation led by then Indian fertiliser secretary Sutanu Behuria travelled to Belarus to explore opportunities of investing in the potash industry in the east European country, by buying a stake in JSC Belaruskali, which together with Canadian and Russian potash players control almost 60% of world production. India was offered a 20% stake at $6 billion but came back empty handed.

1331 0

More Asia News