re: Ann: Significant Milestones in Acquisitio... Kenya better...

re: Ann: Significant Milestones in Acquisitio... Kenya better than Australia for investment, says miner.

Thursday, 06/05/2010
ABC

An Australian company setting up a mineral sands mine in Kenya says the African country is less risky to invest in than Australia.

Base Iron is in advanced negotiations with the government there to start mining mineral sands.

Managing director Tim Carstens says Kenya has based its mining regulatory and taxation framework on Australia's, but the our new tax on mining profits makes it an even more attractive destination.

He says Australia's international reputation as a good place to do business has been savaged.

"It just doesn't make economic sense to anyone who really understands the way global capital markets work," he says.

"We've just made ourselves an unattractive destination. Even if this is wound back, we've set the alarm bells ringing about what is possible in Australia in terms of sudden change, and what to capital markets players would seem an irrational change."

Meanwhile, there's speculation major mining company Rio Tinto may shelve $11 billion expansion plans on its iron ore projects in Western Australia's Pilbara region.

The plan for a 40 per cent tax on mining super profits has created uncertainty and a drop in investor confidence.

Minelife senior resources analyst Gavin Wendt says suspension of the company's growth plans would have bad consequences for the future of the Australian economy.

"It won't neccesarily have any impact right now, but what we're talking about, of course, is new projects and projects on the drawing board, and it's going to have an extremely negative impact on exports in the future."

http://www.abc.net.au/rural/news/content/201005/s2892039.htm