Australian mining tax deeply flawed BHP Billiton

Australia’s government should go back to the drawing board on its proposed...

Australia’s government should go back to the drawing board on its proposed mining tax, applying it differentially on various commodities, the head of mining giant BHP Billiton (BHP.AX: Quote)(BLT.L: Quote) was quoted as saying.BHP’s chief executive Marius Kloppers told The Age newspaper that the planned profits-based tax had eroded confidence for investors and financiers established by the "gold standard" policies of the previous Hawke, Keating and Howard governments."We have done damage to that gold standard already," Kloppers told the paper, describing the 40 percent super profits tax as "deeply flawed".Kloppers’ comments came after global miner Xstrata (XTA.L: Quote) threatened to scrap $5.4 billion of Australian coal and copper projects, blaming the new tax and taking the value of new developments on hold to above $20 billion in just a month.Xstrata’s move, which targets Prime Minister Kevin Rudd’s home state of Queensland, will pile further pressure on the government to water down a proposed 40 percent tax on mining profits and give new ammunition to the tax’s political opponents.But Rudd, whose government has started negotiations with miners on what he says will be generous transitional arrangements, said the tax was the right policy."Overall, the government is confident of its argument, because the people of Australia deserve a fairer share back for the resources which they themselves ultimately own," Rudd told local television on Friday."All I can say is, yes, you should take what big mining companies -- very big mining companies -- have to say in this big debate about them paying more tax with a bit of a grain of salt sometimes," Rudd said.Xstrata, which last month halted some copper exploration in Queensland, said on Thursday it was shelving A$586 million ($493.7 million) of spending on its Wandoan thermal coal project and its expansion of its Ernest Henry copper mine.