twiggy on inside business, page-4

This is probably why he is behaving like a sook.
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Well Twiggy would say that, wouldnt he? Fortescue Metals Andrew Forrest announcement of a freeze on two of three planned expansion projects as a result of the Rudd governments proposed super tax on resource profits could be seen, probably correctly, as just an escalation in the rhetoric of the miners as they lobby against the tax.

But Forrest has good reason to be vocal he personally and the Fortescue group have, in relative terms, probably more to lose, indeed substantially more, than any other individual or company if the tax is implemented in its proposed form.


Unusually for a resources group of its size, Fortescue is quite highly leveraged with high-yield debt, partly to maintain Forrests control but more particularly because that was the only source of sufficient capital available to the group to develop its existing operations. Thus it has about $US2.6 billion of relatively high-cost borrowings in its balance sheet against stated equity of only $US850 million.


Fortescue might be an extreme example of an impact of the proposed RSPT on resource developments, and Forrest does have a vested interest in talking up the destructive impacts of the tax. But then, he and his company do have a lot more to lose than most, if not all in the sector, if the tax is brought in unchanged.


selections from :
http://www.businessspectator.com.au/bs.nsf/Article/Fortescue-FMG-Andrew-Forrest-resource-rent-tax-pd20100519-5L789?opendocument&src=rss