By Joel Scanlon
There is a new critic from the mining industry over Australian Prime Minister Kevin Rudd's proposed 40% RSPT. The man in question is Terry Burgess, the boss of Oz Minerals. At the Melbourne Mining Club as guest speaker, Terry Burgess spoke of the delays in projects and the air of uncertainty that the proposed RSPT had created.
He said that an underground project being assessed at Prominent Hill by Oz Minerals may most likely be delayed. This decision was based on the long term factors and a fair assessment of risks involved and profitability.
Excerpt from Terry Burgess Speech
The elephant in the Town Hall today is of course the government’s proposed resources tax. We recently announced that a decision on an underground project we are assessing at Prominent Hill may be delayed because of the uncertainty which currently exists as a result of the tax proposal.
As boards of mining companies we sit down and make 5, 10, 20 year investment decisions. These long-term decisions require a full assessment of the various risks which might impact on a project. In our own case, we want to continue to develop Prominent Hill, for the benefit of all of our stakeholders, but the tax, and the numerous areas of uncertainty it has opened up has made this harder.
It is important in this debate to remember that the investment that is made in a mining project has an enormous positive flow-on effect throughout this country. Any uncertainty or threat to our industry has wider implications than the size of a profit from a specific project.
Like our own small project, there are many others facing the same dilemma and this is why it is so important to have certainty; because it is not just today’s operations, but the future growth projects which are most at risk and therefore the long-term fiscal and community benefits which flow from these into our national prosperity that will not be realised.
Mr. Burgess even told reporters that the company has been in talks with the Treasury twice to find out just how the RSPT is going to work.
There are many questions left unanswered right now, including the point of taxing and how associated costs are to be treated. Mr. Burgess joked that the company financial accounting staff will need at least another set of books to handle this new tax.
Oz Minerals was born out of the merger of Oxiana and Zinifex in 2008. After a rough patch the company is now looking at about a billion dollars in future projects.