The Labor Party has a new leader and the mining industry is already gaining across the Australian stock market. With Prime Minister Kevin Rudd being ousted by Julia Gillard the proposed Resources Super Profits Tax on the mining industry can now be suitably altered.
The result of the new negotiations were evident in the stock price gains of BHP Billiton Ltd. by 2%, Rio Tinto by 2.1%, Fortescue Metals Group Ltd. by 2.7% and Macarthur Coal Ltd by 5.4%. The change in leadership is being seen as a good opportunity to wipe the slate clean and begin negotiations afresh.
Rio Tinto, BHP Billiton and Xstrata Plc have been campaigning since last month in protest to the 40% RSPT proposed by the federal government. The plunge in Mr. Rudd's support in opinion polls combined with the stalling of investments in mining projects worth about $21 billion is being seen as the catalyst for the change.
Julia Gillard said that the government's door is open to the mining industry at a media conference in a clear bid to restart negotiations on issues bothering the mining giants. The more flexible approach on the RSPT is being seen as the key to today's market gains.