A West Australian-based exploration company has cancelled all exploration activities in the state's Pilbara region following the Federal Government's planned introduction of a super profit tax on resources companies.
Cape Lambert Resources says exploration activities at its Cape Lambert South iron ore project will stop as a result of the uncertainty created by the 40 per cent tax.
The company was planning to undertake drilling activities later this year.
Cape Lambert says it will now shift its exploration activities to projects outside Australia.
The Federal Government has proposed to impose the super profit tax on resource companies but will refund royalties paid to state governments and introduce an exploration rebate.
Mining companies will be hit with the tax on so-called super profits which are deemed well above normal.
Speaking at a business and investment function Prime Minister Kevin Rudd wanted to emphasise the benefits arising from the tax.
Under the proposal, it will help fund cuts to the corporate tax rate and provide small businesses with a tax write-off for purchases up to $5,000.
