From The Australian:
The economics of BHP Billiton’s crucial South Flank iron ore development would be “at risk” if a controversial $5 per tonne iron ore tax was introduced, the company has warned.
Speaking to journalists during a tour of BHP’s Jimblebar mine in the Pilbara on Wednesday, the mine’s general manager Andrew Buckley said the new tax proposed by WA Nationals leader Brendon Grylls would have a major impact on the South Flank project.
BHP is studying the merits of an 80 million tonne per year development at South Flank, which would replace the output from its ageing Yandi operation.
“I’ve got no doubt that (the proposed tax) would put that project at risk, and also some of our roles here in Newman and Port Hedland.”
…Mr Buckley said the economics of South Flank would likely still be “sound” under the Grylls proposal, but the uncertainty created by the tax would have a damaging effect on the broader mining industry.
Yes, Mr Grylls’ levy is too high. The amount should be calibrated so that BHP’s and RIO’s competitiveness is not adversely impacted causing them to lose volumes (and therefore investment). That level is more like $2.50 per tonne than the proposed $5 which would put them on par with Vale, from UBS:
I would like to see Mr Grylls (also commit to paying down debt with the windfall (or to invest it strictly in infrastructure or an SWF). If the debate is about equity over generations then the revenue should be accordingly distributed over time.
But you find any of those sensible contours in this debate for idiots, from The West Australian:
Liberal Party State president and former mines minister Norman Moore has called on WA’s two major parties to explicitly rule out forming government with the Nationals after the next election if the price of a deal is support for Brendon Grylls’ $5-a-tonne mining tax.
Mr Moore, in an opinion piece inThe WestAustralian today, writes that Mr Grylls mining tax is “typical of tall poppy syndrome” and would devastate the emerging magnetite iron ore industry.
“Quite frankly, it’s a dud of an idea with no upside whatsoever,” Mr Moore wrote.
“What is now needed is for both of the major parties in WA to unequivocally state before the State election in March 2017 that they will not under any circumstances form a coalition or alliance with the National Party if the price of such an arrangement is the implementation of Mr Grylls’ iron ore slug.
So far I have not seen one argument against the levy. It is all bluster.
