Australia Cuts Resources Tax to 30Pct

Australian government on Friday cut the tax rate for iron ore and coal profits from 40 percent to 30 percent, a substantial concession to the mining firms.

Australian government on Friday cut the tax rate for iron ore and coal profits from 40 percent to 30 percent, a substantial concession to the mining firms.

The new tax rate for iron ore and coal profits will now be 40 percent and the coal-bed methane industry, onshore oil and natural gas projects will still apply to the current 40 percent rate, according to Prime Minister Julia Gillard's announcement.

It will also rules out other commodities, except for iron ore and coal, from the scope of resources tax, which will help ease concerns about its effect on base metals projects.

The Australian government had proposed a super profits tax for resources in early May, sparking controversies and partly leading to the resignation of former Prime Minister Kevin Rudd.

Media reported that the global mining giants BHP Billioton and Rio Tinto have agreed on the new resources tax, as Xstrata announced it would resume some activities suspended over the levy.