time for kw to resign as ceo, page-12

A interesting point of view from the ABC

After examining more of the detail of the Federal Government's tax plans some mining companies are a little more circumspect about the changes.

The tax on super profits is due to start in 2012 and the Government has said it will consult with the mining industry about transitional arrangements.

But the head of Australia's biggest gold miner has expressed doubt that the Federal Government's mining tax plan - which is expected to raise about $9 billion a year - will pass through Parliament in its current form.

Newcrest managing director and CEO Ian Smith says even if the mining tax was to pass, it would only knock about 5 per cent off the value of his company.

At Tuesday's announcement of the successful merger of two of Australia's biggest gold miners, Newcrest and Lihir, Mr Smith suggested the final form of the resources tax legislation will be the result of some negotiation.

"The expectation of this going through Parliament if you want to put a probability on it, I'd put it at a fairly low number," he said.

Mr Smith indicated initial estimates put the negative impact of the tax in the vicinity of 5 per cent of the net present value of the company's assets.

"So if you look at the worst case scenario and the second important driver of value for us going forward is the range of pricing you put on your products," he said.

"So if you take an average expectation of prices, get the worst case scenario it has an overall NPV (net present value) effect on us of around 5 per cent."

And he questioned whether the new impost could even be termed a super profits tax.

"So we are talking about a theoretical early day positioning point which in no way should ever be described as a super profits tax," Mr Smith said