Australia may ax Mining Tax

The fate of a proposed mining tax in Australia, the world’s biggest exporter of coal and iron ore, remains in doubt after no clear winner emerged from the weekend’s election, heightening uncertainty for investors.

Australian Prime Minister Julia Gillard, 48, and opposition leader Tony Abbott, 52, will need to broker deals with lawmakers to pass legislation after neither major party won enough seats to form a government in the 150-member House of Representatives.

Abbott has vowed to scrap Labor’s proposed mining tax, which would place a 30 percent levy on iron ore and coal producers such as BHP Billiton Ltd. and Rio Tinto Group, while Greens leader Bob Brown, whose party now looks to hold the balance of power in the upper house, has said he wants to renegotiate the tax to raise an extra A$2 billion ($1.8 billion).

“If the Liberals were to form a government, there’s no mining tax,” Peter Chilton, a fund manager at Constellation Capital Management Ltd. who holds shares in both BHP and Rio, said by phone from Sydney. “That’s potentially positive for the mining sector. If Labor forms an arrangement with the Greens, there’s more uncertainty.”

Bloomberg

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell