CANBERRA, Australia, July 1 (UPI) -- The Australian government is close to reaching a compromise on the controversial resources super-profits mining tax.
Australian Prime Minister Julia Gillard, when sworn in last Thursday, said she aimed to reach a consensus on the bill, which would tax mining profits at 40 percent after reaching a certain level, beginning in 2012.
Introduced by Gillard's ousted predecessor Kevin Rudd in May, the bill has been fiercely opposed by the resources industry.
Treasurer Wayne Swan and Resources Minister Martin Ferguson had already reached agreement with the heads of the three largest mining companies -- Rio Tinto, BHP Billiton and Xstrata -- on major aspects of the bill, before Gillard joined the discussions Thursday, The Sydney Morning Herald reports.
The Herald reports they agreed to raise the threshold rate at which the super profits tax kicks in from about 5 percent to 12 percent.
One of the largest concessions, the newspaper reports, was minimizing the application of the tax to existing projects. That would allow miners to determine the capital value of existing mines at market value.
The newspaper also said the government would scrap a proposed $1 billion exploration rebate as well as a provision for taxpayers to underwrite 40 percent of failed ventures.
The Herald reports that iron ore, coal, oil and gas were the main resources subject to the tax, but nickel mines have been excluded.
David Flanagan, managing director of Atlas Iron, told the Australian Broadcasting Company that small miners so far hadn't been included in negotiations on the tax, noting that big miners cannot speak on behalf of smaller companies.
"The business models are so vastly different, so to think that those guys know our business and can properly negotiate an outcome on behalf of us, I don't think they can," he said.
"I would be concerned if there was an announcement that took place before there was proper consultation and a consensus because after all, that's where we thought we were heading with Julia Gillard," he added.
The Rudd administration had expected to raise $8.34 billion a year from the tax, which was to help pay for the country's infrastructure spending and retirement funds as part of a major overhaul of Australia's tax system.
Jeff Lawrence, secretary of the Australian Council of Trade Unions told the Herald that Australian businesses should bear the cost of any compromise with the mining lobby, rather than workers and local communities.