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Walls go up
Page 5
Volume 7, Wednesday May 19, 2010
Road
test the new Statesman Page 12
Boxing first
for Roxby Downs Page 20
Despite Mining Tax proposal . . . .
Foley and Kloppers keen for expansion S
outh Australian Treasurer, Kevin Foley and BHP Billiton CEO Marius Kloppers are united in their resolve to see the Olympic Dam mine expansion proceed in light of the new Mining Rent Tax. Even though Mr Kloppers had previously stated “it may be very difficult to approve the expansion” after the Federal Government’s 40 per cent resource profits tax, the company is continuing with the EIS and rejected the suggestion that the project had been shelved, saying it was too soon to draw a conclusion about the tax’s impact. Mr Kloppers said it would be “very difficult” to approve the new mine if the tax was introduced in its current form. The company’s $21 billion Olympic Dam expansion proposal for Roxby Downs has been the subject of much speculation but has drawn explicit support from the State’s Treasurer, Kevin Foley. “We have been in touch with BHP and clearly there are some concerns with BHP and we share some of those concerns.” He said the SA Government supports the Rudd Resource Rent Tax, claiming it is a better tax than the one in place now for mining companies. “It’s a tax on profits and the present one is a tax on production”. Mining companies can be taxed for three of four years without making a profit, but under the Resource Rent they are taxed only when they make a profit. Mr. Foley in an ABC radio interview said the tax needs adjustment to make it fairer and he will work
with BHP and other State Government leaders and miners to set a more acceptable level of before the tax is applied. “It’s (the Rent Tax) structured in a different way to what the offshore oil and gas resource rent tax which I assume is what it is based upon, but as we work through the details there are some marked differences.” Mr. Foley said while he and the Government agreed with the rent tax, and agreed that companies like BHP should be paying more tax than they are, the problem he has is the definition of a super profit. In the case of BHP he said it does not allow the company sufficient return for them to take the risk necessary to expand the mine. He said he understands the issues and concerns from BHP and will articulate them to Mr. Rudd and the Federal Government. Mr. Foley believes the new rent tax based on profits is set too low and he would have expected the onshore miners to have the same rates as those set for the offshore gas and oil profits which are “five or six per cent” higher before the tax kicks in. He further believes the new tax should look at profits on a commodity by commodity basis and not treat iron ore and coal in the same way as uranium and copper. “For our Government Olympic Dam must go ahead. This is a must happen project for this State and underpins jobs, economic growth and wealth creation for this state, for our kids and many, many generations of South Australians.”
Mr Kloppers said, “We acquired that (Olympic Dam) project five years ago and we’ve been working very hard to develop the technologies to do that in a manner that is cost effective, capital effective and we’ve waited for the uranium market to show demand,” he said.
“We are getting very close to the end of that process. “Our EIS will finish in about 18 months’ time and this new tax proposal does upset the apple cart there a little bit,” he said. Mr Kloppers reiterated the project had not been shelved.
“For our Government Olympic Dam must go ahead. . . .” - Foley
CEO Marius Kloppers denies the project at Olympic Dam has been shelved.