Several commenters seem to think that minerals development should have stopped in the Stone Age. The rest of us depend on mining for our standard of living.

In a recent talk, BP exec David Eyton mentioned some of the issues re minerals projects in the developing world.

“How do we sign 30-year contracts and expect future governments to abide by them? BP [takes] huge risk over many years and backs this bet with our capital.” Often, after BP has spent billions of dollars, a country evicts them - during the last century, BP was asked to leave Iran, Iraq, Nigeria and Venezuela.

BP has learned is the importance of mutuality. Many countries with major new oil and gas discoveries lack the required expertise and technology.

"Governments realize that if they are going to extract those resources and profit from them, they need to partner with somebody who knows what they are doing. And most realize that abandoning a contract carries risks for them, too.

"What we need is a legal system - to have confidence that a deal can be enforced. There also has to be order, enforced by the police and/or an army. And lastly, we need a fiscal or regulatory regime which describes how the money flows and the rules of the game. These can be difficult in less well developed countries, but if we have them we can probably do a deal, and provided that we are sure we can keep our people safe, then we can begin operations.

"I would argue that mutuality is not simply about a deal, but structuring the relationship so that you are adding value over a long period of time. Absent this, the local community will turn around and kick you out."

The minerals industry involves very high risks and incurs huge capital expenditure long before any returns are made. The RSPT fails to acknowledge the risks and long return-free period for mines. The risk for mining in Australia's has moved much closer to that in developing countries. How can that benefit anyone?

If miners want "certainty", they have it. Staring them in the face. Just like the rest of us. Death and taxes. That's what I call certainty. Every business wants "certainty" but what they really mean is subsidy. Mining companies, banks, oil companies are forever moaning about taxes, payrolls, prices of commodities. Name it.Taxes are never low enough, wages are always way too high, Prices are too low, expenses too high. shareholders too stingy.What a performance when they had to stop sending children under 12 down the pits and pay their workers in money instead of gin and opium.It took an act of Parliament and they weren't happy. And they're still unhappy.And they always want more.Farmers used to demand "certainty"and they got non repayable loans, no tax,super subsidies, free vehicles and plant, the dole and retraining. Rent seekers and special pleaders. They can all pack up and go where ever they like.They wont though. They're on a very good wicket, turning in astronomical profits every year. Nothing like the sound of billionaires wingeing. A cacophony of me, me ,me me,and me, ad infinitum. They are bludgers.Smirking, wingeing bludgers.

The author is quite correct, the Govt has just shot itself and
Australia, in the proverbial foot with this one. They have just
not thought through the implications.

BHP is in fact 60% Australian owned, virtually every Australian
worker with a super fund, would be an investor. Another half a
million mums and dads own shares directly. Many are grey nomads
etc, who saved for their retirement.

Who will benefit most from this tax? The Chinese of course.
Given that it won't pay many Western companies to bother with
many projects, the Chinese will be able to buy into projects
fairly cheaply. Australian taxpayers will fund 40% of any
project that goes wrong, making taxpayers liable for billions.

The Chinese don't need to make a profit on the mining part,
so will do their best to use some creative Chinese accounting,
to transfer profits to China, bad luck sucker Aussies.

The Chinese will have their cheap resources, we'll have sweet
bugger all. All very clever, this Govt!

As a matter of interest, resources belong to the States, not the
Federal Govt. Its time Western Australia seceded from you lot,
judging by some of the ridiculous posts so far on this thread.

Then you'll have your banana republic, which many are apparently
so keen on.

Isn't it interesting that the Party that created the BIGGEST great big new tax is jumping up and down about the richest companies paying their share?

GST. Don't forget it as it grows bigger every hour. NZ are just about to go to 15%. What do you think Abbott will do to replace the mining tax? Yup, 15% for YOU.

Hypocisy rules. But of course Rudd won't raise this issue as he needs the GST. They never ever take a tax off without at least replacing it with something twice as greedy.

The amount of profit made by the Big Miners is small compared to a trillion dollars plus economy. The tax on that less still. Besides they did not produce the commodity - nature did. If costs go up, it is incumbent on the Miners to develop more efficent means of extraction.

Twenty-odd years ago, to bracket PAYEs were paying 61% (with Medicare) and the Liberal Party wasn't running around like chicken little.

As to the super-tax being Communism: I put, allowing high Chinese sovereign investment is closer to Communism.


On the other hand, I would have thought a higher withholding on outward foreign dividends a better approach.

If BHP and Rio don't like it. Tough. The govenment could always pull the leases and give the work to the Canadians. BHP and Rio, both have large overshore shareholdings, anyway.

Oh dear “Formersnag” are you seeing reds under the bed?
As to our standard of living Faustino, it is about to fall off a cliff. The next wave of the financial crisis is about to hit us and that will stop the ‘American dream’. Without that the Chinese steamroller economy will falter to a halt and then the Australian quarries will close down. On top of that peak oil will put the boot in and finish the whole thing off.
Don’t worry about your standard of living; start planning where your next meal will come from.
I am not convincing that “Saint BP” is the “nice guy” corporation that you seem to be seeing them as.
As for deals for the next 30 years that is a pipe dream that only the big end of town & the Government is having.
Dream on, while you can.