This is why I have not only emailed the PM, but also my local Federal (Labor) member.
If HGO are wise, they will have set up a meeting with the State Government to highlight to them just how detrimental this tax would be. Just as Anna Bligh is now having to speak out against the tax (as is Colin Barnett), so too should Mike Rann.
The more voices that are heard, the more likely it will be dropped even before the election.
But, readers of my posts already know my view. Yes, the tax is scary. But rational analysis of the politcal process reveals it has no chance of getting through Parliament (even based on current senate numbers). Were Labor to lose a few more senate seats in QLD, WA etc (and, Rudd is dropping like a stone in the polls), then that task become even more impossible. On top of that, Labor may not even win!
The most likely outcome in our bi-cameral parliament, in which the balance of power is shared by minor parties with divergent views, IS STALEMATE. Legislation, like referenda, requires bi-partisan support.
Labor could not even get the ETS through the Senate (even with just under half the support of the Liberals), and the Greens, because of the conservative independents Xenophon and Fielding. (Speaking of which, HGO and Dean Brown should also be contacting SA Senator Nick Xenophon to express their concerns and give him a flavour of its impact on Kanmantoo).
So, with a win for Labor doubful in its own right, further losses likely for Labor in the Senate, pressure from State Premiers (some of them Labor), mining companies threatening project deferrals, and now a correction in world equity markets... this tax proposal is a political dead duck. It will not get through the Senate, and so will never become law. (This is not a hope, just a statement of political fact.)
Horsetrader1 - as for OZ Minerals - glad to see you can confirm my information and previous theory that OZL did have a first look at HGO. Despite what you claimed last year, common sense suggested OZL would had to have been looking. I now am far more confident in that view based on a variety of information. (ironically, your posts on here in H2 2009 helped trigger the idea!)
And, if OZL were smart, they will recognise that HGO's price has dropped even more than the (potential) drop in profit on K. And, virtually none of Kanmantoo's value was factored in to HGO's price anyway. And, not only that, once they realise that this new tax will not become law (but just SCARE decision-makers like them in the meantime), they will realise nothing has changed.
This is what being a contrarian is all about - a concept OZL struggles with. You buy when others ARE fearful and there IS doubt around. This is the time to spend your cash. When prices have dropped and others just cannot see anything but fear and projects on hold. And you sell when it seems the good times will go on forever (and this is when OZL were buying and leveraging themselves up).
Webzone10 - if you do not think HGO is a buy at prices ony marginally above cash backing ... then it is very unlikely you will ever become a holder again. Or, if you do, you will need the reassurance of strong news and hence buoyant prices... the copper hasn't gone anywhere. And nor has the cash.
Y
HGO Price at posting:
30.5¢ Sentiment: Buy Disclosure: Held
