bhps olympic dam has no value under new tax

So who is right...Henry, Rudd, Swan and their cohorts who chose arbitrary figures of 6% (return rate) and 40% tax rate with no individual project modelling, or the analysts that look at each project indivdually?

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DJ MARKET TALK: BHP's Olympic Dam Has No Value Under New Tax

2242 GMT [Dow Jones] BHP Billiton's (BHP.AU) planned expansion of the Olympic Dam mine is unlikely to go ahead if the Australian government enacts its planned Resource Super Profits Tax, Morgan Stanley says. "Our modelling of this project shows that the RSPT reduces the NPV of the project to an extent that it becomes negative, and return on invested capital below minimum hurdle rate of 15% used by the mining industry," analysts say in a client note. "Under the RSPT as proposed, the project has no economic value, in our view." Says other base metals and thermal coal projects will struggle to make a positive return under the RSPT. Says for projects to be able to proceed, the tax would need to kick in at a profit of between 10% and 15% rather than the 6% currently proposed and that the rate of the tax would need to fall to 20% from 40%.
Says existing assets should be allowed to be re-valued to replacement or market value and funding costs should be deductible.
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