By Eric Onstad and Dominic Lau
LONDON, May 26 (Reuters) - The Australian government is planning to dampen the impact of its planned resources tax by lifting the threshold of where it would kick in, The Australian newspaper said on its website on Wednesday.
The newspaper said Canberra was preparing to change the definition of a 'super profit' to 11 or 12 percent from 6 percent after a robust campaign by mining companies.
The report helped add to strong gains in UK-listed miners, which were already rallying before the report came out as metals prices rebounded and investors hunted for bargains after recent share price declines.
Rio Tinto Ltd/Plc shares in London closed 7.3 percent higher at 3,064.5 pence, BHP Billiton Ltd/Plc gained 5.3 percent to 1857.5p and Xstrata Plc added 5.7 percent to 972.3p.
The proposed tax, due to come into effect in mid 2012, has angered the mining industry, which has warned it puts mine expansion at risk and could push investment overseas.
The paper said the government's consultation panel, headed by Treasury Deputy Secretary David Parker, was expected to make the recommendation about the revised threshold later this week, but did not say how it obtained the information.
To offset lost revenue from changing the threshold, the government would withdraw a taxpayer-funded compensation scheme originally offered for mining projects that fail, it added.
The 40 percent super profits tax on resources is the centrepiece of Prime Minister Kevin Rudd's re-election campaign and efforts to counter sliding opinion polls that hold the outside chance of a hung parliament.
Xstrata responded to the newspaper article by calling on the Australian government to fully consult with mining companies.
'Tinkering at the margins will not avoid the significant long-term damage this tax could do to mining investment in Australia. The government should stop negotiating with itself and start consulting with industry,' Chief Executive Mick Davis said in an e-mail to Reuters.
'The government needs to do what it should have done all along and enter into a full and open consultation with the industry where every aspect of the super tax is open for debate.'
Mining companies criticise the current consultation exercise as being superficial, being only about implementation of the tax, not the fundamental basis for it.
Rio Tinto said on Wednesday it was concerned other nations could follow Australia's lead by introducing a windfall tax on mining profits.
(Editing by David Holmes)
((For more on the proposed tax click on:)) Keywords: AUSTRALIA MINING/ (eric.onstad@thomsonreuters.com; +44 20 7542 7093; Reuters Messaging: eric.onstad.reuters.com@reuters.net; ) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
LONDON, May 26 (Reuters) - The Australian government is planning to dampen the impact of its planned resources tax by lifting the threshold of where it would kick in, The Australian newspaper said on its website on Wednesday.
The newspaper said Canberra was preparing to change the definition of a 'super profit' to 11 or 12 percent from 6 percent after a robust campaign by mining companies.
The report helped add to strong gains in UK-listed miners, which were already rallying before the report came out as metals prices rebounded and investors hunted for bargains after recent share price declines.
Rio Tinto Ltd/Plc shares in London closed 7.3 percent higher at 3,064.5 pence, BHP Billiton Ltd/Plc gained 5.3 percent to 1857.5p and Xstrata Plc added 5.7 percent to 972.3p.
The proposed tax, due to come into effect in mid 2012, has angered the mining industry, which has warned it puts mine expansion at risk and could push investment overseas.
The paper said the government's consultation panel, headed by Treasury Deputy Secretary David Parker, was expected to make the recommendation about the revised threshold later this week, but did not say how it obtained the information.
To offset lost revenue from changing the threshold, the government would withdraw a taxpayer-funded compensation scheme originally offered for mining projects that fail, it added.
The 40 percent super profits tax on resources is the centrepiece of Prime Minister Kevin Rudd's re-election campaign and efforts to counter sliding opinion polls that hold the outside chance of a hung parliament.
Xstrata responded to the newspaper article by calling on the Australian government to fully consult with mining companies.
'Tinkering at the margins will not avoid the significant long-term damage this tax could do to mining investment in Australia. The government should stop negotiating with itself and start consulting with industry,' Chief Executive Mick Davis said in an e-mail to Reuters.
'The government needs to do what it should have done all along and enter into a full and open consultation with the industry where every aspect of the super tax is open for debate.'
Mining companies criticise the current consultation exercise as being superficial, being only about implementation of the tax, not the fundamental basis for it.
Rio Tinto said on Wednesday it was concerned other nations could follow Australia's lead by introducing a windfall tax on mining profits.
(Editing by David Holmes)
((For more on the proposed tax click on:)) Keywords: AUSTRALIA MINING/ (eric.onstad@thomsonreuters.com; +44 20 7542 7093; Reuters Messaging: eric.onstad.reuters.com@reuters.net; ) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.