Nyrstar May Forego Expanding in Australia Because of Super Tax
Thursday, May 6th, 2010
Zinc producer Nyrstar NV said the 40 percent super tax on mining companies in Australia could keep them from expanding their business in the country, although current operations won't be affected.
In an interview today, Nyrstar’s legal and external affairs director, Michael Morley, said this, “Whilst the proposed tax would not apply to our existing operations in Australia, it will become an additional consideration to take into account in the continued execution of our strategy to expand.”
Other mining companies have communicated the same thing, making the tax apparently counterproductive, as the increased revenue for the government would, over time, be significantly cut by mining companies looking elsewhere for revenue and profits.
Rio Tinto (ASX:RIO) has already put a number of its expansion plans on hold in Australia while they look at the overall picture and how the tax will impact their business in the country.
Nyrstar had recently made a bid for CBH Resources, which would have given them their first mining presence in Australia. Toho Zinc, from Japan, made a higher bid to fight off the Nyrstar bid, which in light of the proposed super tax, says they won't increase in an attempt to land CBH.
The super mining tax is scheduled to be implemented in 2012.
Article by Gary B
The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com
Tags: australia business , mining tax , nyrstar , rio tinto , super tax
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