viability of toro, page-12

acecant,
True re capital expenditure being written off first, and again true on being paid on EBIT. So if you have borrowed money, then the tax is before you pay the interest. So there is every possibility, that after the tax, you could be cash flow negative.

If this tax had been in place, FMG would never have got off the ground, and when Twiggy spoke to Rudd, he agreed. If this tax had been in place, the Pilbara would never have got off the ground. Why? Because any resource project that requires significant borrowing to put in place infrastructure to get the goods out will not generate a rate of return that is acceptable to business.

Kloppers partly explained the issue on Inside Business. The link below is the interview transcript. Well worth taking the time to read.

http://www.abc.net.au/insidebusiness/content/2010/s2894233.htm

HT1