iluka boss urges people-power protest on tax

KATE EMERY

Iluka Resources boss David Robb has followed in BHP Billitons footsteps, calling shareholders to arms over the Federal Governments resource super profits tax as he warned it would cloud an imminent decision on a new WA mine.
Speaking after the groups annual meeting in Perth, Mr Robb said he hoped the $30 million Tutunup South project could get up but said it was being considered against a landscape of total confusion.
Construction of Tutunup, about 200km south of Perth, was deferred amid the global financial crisis but Iluka is due to make a decision on its future in a matter of months.
Mr Robb called on shareholders, who have had millions wiped from the value of their investment since the tax was announced nearly three weeks ago, to play a role in the RSPT debate.
The so-called super-profits tax is nothing of the sort, he told the meeting. I do not believe it is good for Australia and I would encourage you, as shareholders in a resources company, to determine your view about it and express that view to your elected representative.
BHP has made similar overtures to its shareholders, with plans to hold information nights across the country.
Mr Robbs comments came in the wake of Fortescue Metals Groups decision to shelve a Pilbara expansion because of the tax and were made on another losing day on the stockmarket where investors continued to desert mining stocks on fears about the RSPT and global economic concerns.
In a swipe at the Governments perceived lack of industry consultation, Mr Robb said Iluka was still in the dark over the details of the tax, despite a meeting with Treasury officials this week.
For instance, the miner is seeking clarity over where the tax kicks into the production chain.
Will it be (levied) at the back end of our concentrators on production of heavy mineral concentrate? he said.
Or should it be after we have produced a number of finished products at the mineral separation processing stage? How will our substantial investment in value adding activities such as synthetic rutile production be treated?
The good news for Iluka shareholders is that the miner expects to be comparatively sheltered from the RSPT, at least in the shorter term, partly because of its recent big capital outlay on new projects.
Ilukas lucrative royalty on iron ore production at BHP Billitons Mining Area C is also expected to be unaffected.
Shares in Iluka lost 6 to $4.39.