henry review at a glance, page-118

Chair5807 the article you found is spot on.

What amazes me is the rate for the new tax (as heard on the Fox financial channel 602) is to be set at: when profits exceed the Aust Bond rate. The 10 yr bond rate is presently just under 6%.

So if cost of mining a tonne of iron ore is $50 then super profits exist (assume a bond rate of 6%)when you sell that one tonne of ore for greater than $50*1.06 = $53.

Recent iron ore prices $95 for the 3 month contract. Therefore the new tax would be applied on $95-$53 = $42.

From the $42 take off relevant deductions. Now if the best they can offer is the exploration cost and other costs of getting to this position I have read reports that the finding cost of an ore body can be between $1 to $2 per tonne depending on the quantity found in a depoist. Therefore not much of a deduction if based on a $ average over the total ore body.

The big sting in this is that this tax is retrospective. The review panel to be set up, is to work out how much in deductions they will give FMG; BHP; RIO and other producing companies for past costs so they can apply the tax on future mined ore.

What is more amazing is that dare not touch the banks and macquarie to say they ever rolled in good times and deserve a new tax. Better yet what about News Corp and their expected windfall on Avatar.