Iron ore price weakens as Australia flags return to sub-$100 prices
Futures dropped for a fourth day in Singapore, to trade about 3% lower for the week.
Announced in a press release today, Fortescue Metals Group (ASX:FMG) has “lodged a challenge in the High Court of Australia against the Federal Government’s Minerals Resource Rent Tax on constitutional grounds.”
The challenge stems from the Australian Senate’s March decision to approve mining legislation imposing a 30% tax on coal and iron ore miners.
The new tax, which is set to become law on July 1, is expected to harvest about $12 billion in taxes in three years from mining giants such as BHP Billiton, Rio Tinto and Xstrata.
According to its release, Fortescue is challenging the legislation on the grounds that the tax discriminates between the States, gives preference to one State over another and restricts a State’s ability to encourage mining. Those infringements, as the release points out, are contrary to sections 51, 99 and 91 of the Constitution.
In April the Minerals Council of Australia ran an ad campaign attacking the tax hikes imposed by the federal government, “Australian mining already pays 500% more taxes and royalties than 10 years ago and will soon have to pay the new mining and carbon taxes as well.”
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Unfortunately Australia has a silly labour government who is killing the Golden Goose. They are incompentent and I hope the miners beat the extra tax.