I know it is still along way off getting up and it might never see the light of day, but what do others think about the RSPT's potential impact on Mining Services and Engineering companies.
If mining profits are to be subject to a super tax and, at the same time, mining services and engineering are not, isnt there a massive risk that mining profits will be shifted into mining services and engineering activities. After all, if I understand it correctly, these activities will be on the deductible expenditure side of the equation.
If I am right about this, isnt there considerable potential for the miners to expand the range of activities they undertake to ensure that they retain a greater portion of the profits and reduce the effective tax rate on their business. So arent miners likely to bring mining and engineering services back in-house?
So if the RSPT gets up, isnt there a real chance that the big Miners will move to acquire businesses like DOW or at least elements of these types of businesses? What do others think?
I apologise if this has already been discussed.
DOW Price at posting:
$4.31 Sentiment: Hold Disclosure: Held
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