"Xstrata Suspends A$586 Million Spending in Australia (Update1) Share Business ExchangeTwitterFacebook| Email | Print | A A A By Elisabeth Behrmann
June 3 (Bloomberg) -- Xstrata Plc, the world?s largest thermal coal exporter, suspended A$586 million ($495 million) of spending on coal and copper projects in Australia because of the government?s proposed tax on mine profits.
The tax ?has created significant uncertainty for the future of mining investments into Australia and would impair the value of previously approved projects and exploration to the point that continued investment can no longer be justified,? Mick Davis, chief executive officer of the Zug, Switzerland- based Xstrata, said today in an e-mailed statement.
The Australian government last month announced plans to levy a 40 percent tax on mining profits for 2012. Mining companies, including BHP Billiton Ltd. and Rio Tinto Group are pressing for changes to the tax which they say will make it difficult to approve projects.
?Where there?s uncertainty, companies will be shelving projects or putting them on hold,? said Michael Heffernan, a client adviser with Austock Securities Ltd. in Melbourne.
Work to develop the A$6 billion Wandoan Coal Project and expand the Ernest Henry mining shaft underground mine project has been suspended, the company said. Drilling and exploration work on other coal projects was also suspended, it said."
To contact the reporter on this story: Elisabeth Behrmann at [email protected]
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