Xstrata puts 27.2 million Australian project on hold

10th May 2010, Comments 0 comments

Anglo-Swiss mining giant Xstrata on Monday suspended a 30 million dollar (27.2 million US) copper exploration project in Australia until a proposed new tax on resources profits is finalised.

The government is facing a backlash from the mining industry -- which accounts for more than 40 percent of Australia's exports -- over the 40 percent tax on the "super profits" of resources firms.

Xstrata said the three-year exploration project in the Mount Isa and Cloncurry regions in the northeastern state of Queensland was on hold.

"We have decided to suspend exploration activities in north Queensland until there is greater certainty on the fiscal regime for future mining developments," Xstrata Copper North Queensland chief operating officer Steve de Kruijff said.

He said the proposed tax would impact the relative economics of the projects compared with exploration programmes elsewhere in the world and could seriously hurt the sustainability of Xstrata's operations in Queensland.

Global mining chiefs have warned that the proposed tax will hurt investment and jobs in Australia and would place the highest taxes in the world on the industry.

-- Dow Jones Newswires contributed to this story --

© 2010 AFP

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