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Drastic Drop in Mining Deals, RSPT Effect?

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Is the proposed RSPT of the Australian government to blame for the drastic reduction in mining deals this quarter? It would seem so. A total of 47 deals have been announced in the quarter ending June 2010 which are valued at $914 million.

Compare that to the 89 deals valued at $9.11 billion in the quarter ending June 2009 and you will get the idea of how low that figure is. In fact the data compiled by Bloomberg suggests that this is the lowest number of mining deals on record since the first quarter of 2006 and the smallest value since the fourth quarter of 2005.

The pullback in mining investments has been predicted by most economists given the uncertainty surrounding the RSPT at the moment. Prime Minister Kevin Rudd wants to implement the tax from 2012.

This impending situation has also resulted in a plunge in mining takeovers in Australia with Peabody Energy Corp cutting its takeover offer by 6.3% of Macarthur Coal Ltd. If it does go into effect in its present form, it will be the highest tax rate for mining companies in the world.

Joel Scanlon

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Joel Scanlon

Joel relocated to Australia in 1995 from the United Kingdom and spent five years working in the mining industry as an exploration geotechnician. His role involved utilizing GIS mapping and CAD software. Upon transitioning to the North Coast of NSW, Australia, Joel embarked on a career as a graphic designer at a well-known consultancy firm. Subsequently, he established a successful web services business catering to companies across the eastern seaboard of Australia. It was during this time that he conceived and launched News-Medical.Net. Joel has been an integral part of AZoNetwork since its inception in 2000. Joel possesses a keen interest in exploring the boundaries of technology, comprehending its potential impact on society, and actively engaging with AI-driven solutions and advancements.

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