Smaller mining companies do not seem to share the sense of jubilation that the federal government and the major mining firms like Rio Tinto, BHP Billiton and Xstrata share over the recent breakthrough on the proposed mining tax.
Smaller iron ore mining companies like Gindalbie Metals, Atlas Iron are definitely not pleased at the way the new tax is being framed. The smaller companies plan to demand significant changes to the proposed tax as they feel that the compromised deal made with the Minerals Resources Rent Tax or MMRT weighs heavily in favor of those industry mining majors who negotiated the deal.
They intend to meet Resources Minister Martin Ferguson in Perth to demand exemptions from the MRRT. The disadvantages to the mid-tier group of companies that come from the new law were highlighted by David Flanagan, the chief executive of Atlas.
According to Mr. Flanagan the hurdle rate at which the tax kicks in should be higher. He also condemned the loss of the $1.1 billion exploration rebate which allowed smaller companies to claim tax deductions.
If the government thought that replacing the RSPT with the MRRT would solve the issue, they had not envisaged this split in the mining industry.