HomeBase MetalsNew Australian tax concerns leading African miners

New Australian tax concerns leading African miners

AngloGold CEO
Mark Cutifani
Johannesburg, South Africa — MININGREVIEW.COM — 07 May 2010 – AngloGold Ashanti and Gold Fields “’ the world’s 3rd and 4th-largest gold miners “’ both missed March quarter profit expectations on lower output, and said the new mine tax in Australia could affect them.

Australia angered the booming resources sector “’ including mining giants BHP Billiton and Rio Tinto “’ by unveiling a new tax on mines from July 2012 under a sweeping pre-election tax overhaul which will also boost pension savings for workers.

South African miners AngloGold and Gold Fields, which both have mines in Australia, said the plan to levy a 40% tax on profit could deter mining investment in the country and might damage the industry by making it less attractive to investors.

“It will be a very significant increase. This is highly negative for Australia, and if it goes through it could possibly make the country the second most expensive fiscal regime in the world,” Gold Fields chief executive Nick Holland said. “I believe it will be opposed in the Senate, and the final form will be somewhat different than what we are seeing today,” Holland added.

Gold Fields has its main operations in Africa, as well as in South America and Australia.

Bigger rival AngloGold “’ which has around 20 operations across four continents, including Australia “’ said it hoped it might get some respite from the new tax because it was developing the new Tropicana project and would get exploration credits.

“So we might get to see some breaks on that front, but it still has the potential to impact us……although to what degree we are not quite sure,” chief executive Mark Cutifani told journalists.

The proposal envisages an exploration rebate and other benefits for miners, but analysts still believe the new tax would ultimately harm most projects.