In Western Australia, the state govern-ment reached agreements with BHP Billiton and Rio Tinto early in November to increase the royalty rate on iron ore fines to match the existing rate paid on lump ore. The fines rate will increase from 5.625% of sales revenue to 6.5% from July 1, 2012, and then to 7.5% from July 1, 2013. The agreements are subject to approval by Western Australia's parliament.

At the national level, on November 23, the lower house of the Australian parlia-ment (the House of Representatives) passed a new 30% MRRT on the nation's iron ore and coal mining industries that would be effective from July 2012. The tax applies to profits above $75 million. Small miners had sought a higher threshold of as much as $500 million. The tax still must pass the Senate. Such approval, while expected, is not entirely assured.

In a strongly-worded media release issued November 23, Fortescue Metals Group CFO Stephen Pearce said history will prove the MRRT has reduced inter-national investment in Australian mining projects and pushed those investors to look elsewhere. "The whole mining tax process has been shambolic and destructive," Pearce said. "From the moment the Rudd Government proposed the initial version of the tax in May last year, Australia's high sovereign reputation for international min-ing investors has been compromised.

"The carnage of this tax is already clear to see. It has forced the resignation of a Prime Minister, it has eventuated in policy that can't be revealed because it was for-mulated in secret, it has pitted big miners against small, it is discriminatory toward junior producers, and it only impacts on iron ore and coal.

"There is also little doubt that this tax will not generate $11.1 billion over three years as forecast by the government. The very nature of the design of the MRRT pre-vents that happening. The complexity of the tax's design and the secrecy of the numbers used by treasury have denied any substantive technical measurement of its revenue deliverables, but it is certain it will not generate anywhere near what the gov-ernment has promised.

"The great misfortune is when the gov-ernment is proven wrong, it will be too late for the raft of start-up projects now on draw-ing boards right across the junior mining sec-tor that are now threatened by the tax.

"Fortescue believes the MRRT has also fundamentally sought to erode state's rights under the Constitution, the very core and foundation of the Commonwealth.

"It is now the responsibility of senators to see the errors in this tax and throw it out."

More controversially, the new carbon emissions tax cuts across all sectors of the Australian economy. A fixed carbon tax of $23/mt will be imposed on Australia's top 500 polluters from July 2012. Then, an emissions trading scheme will be effective from July 2015. Companies involved will need a permit for every tonne of carbon they emit. The nation's aluminum, coal, steel, iron ore and electrical power generation industries, among others, will be impacted.

In opposition, the Australia Aluminum Council has argued that the carbon tax will reduce the competitive position of Australian aluminum producers in relation to producers elsewhere in the world, espe-cially producers in China and the Middle East. Also, to the extent that aluminum pro-duction shifts to locations with low or no car-bon tax, the Australian tax will not reduce the industry's carbon emissions world-wide.

And, a November 9 Canberra Times arti-cle quoted Australian Coal Association Chairman John Pegler to the effect that the carbon tax could force premature closure of 17% of current black coal mines in Australia and that the tax will put more that 21,000 jobs at risk within 10 years in coal mining and related businesses. Underground coal mines in New South Wales face the greatest threat, with 12 of the 30 current mines at risk of premature closure, Pegler said.