david flanagan to meet ferguson

Junior iron ore companies to meet Ferguson MATHEW MURPHY
July 5, 2010
.THE haggling over the Gillard government's revised mining tax announced on Friday continues as junior iron ore companies meet Resources Minister Martin Ferguson in Perth today to propose further concessions.

The minister will address a breakfast hosted by the Chamber for Minerals and Energy of Western Australia before private meetings with iron ore companies. The junior iron ore players, along with the smaller coal companies, are regarded as the biggest losers from the new proposal. While the lift in the hurdle rate might cover the financing costs of the big miners, which can get access to funds more cheaply, it won't cover the average cost of capital for the smaller miners, which is closer to 20 per cent in some cases.

David Flanagan, the managing director of iron ore producer Atlas Iron, said the juniors would be putting a four-point plan to Mr Ferguson that comprised:

Increasing the threshold at which companies pay the minerals resource rent tax from $50 million to $100 million.

Lifting the hurdle rate from the long-term bond rate plus 7 per cent (about 12 per cent) to more closely reflect the cost of borrowing.

Reintroducing the exploration rebate, which was proposed under the old resource tax.

Excluding magnetite projects from the tax because of the high processing required at surface level.

''I don't want people to think that we are sitting here like screaming skulls,'' Mr Flanagan said. ''We think that the government has made some good movements and if they make a few more then it will really help the juniors.''

Mr Ferguson said yesterday that the exploration rebate was something the policy transition group headed by himself and former BHP chairman Don Argus would revisit.

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http://www.theage.com.au/business/junior-iron-ore-companies-to-meet-ferguson-20100704-zvub.html

Cheers, doomdog