As some of you may know, Petronas, one of Malaysia's biggest companies, has been partnering with Santos for sometime in a joint venture project to develop liquefied natural gas near Rockhampton. Prime Minister Kevin Rudd's recent statements regarding a 'super tax' on foreign mining profits may be putting a dampener on that, as well as any future Malaysian investment in the mining industry. Even Queensland Premier Anna Bligh has expressed her concerns about the tax in relation to the LNG project. We hope that the Queensland Goverment will do more to convince the Australian Government that their proposal will have serious consequences for the Queensland economy.
The AMBCQ has concerns that this additional tax on the mining sector will result in a significant reduction in the competitiveness of Australia as an investment destination for mining and resources. Countries such as Canada would have less than half the tax compared to Australia if this proposal were to be implemented by the Rudd Government.
This proposal has brought about a level of uncertainity to the whole industry. Petronas' joint venture partner Santos has announced that it is putting on hold its final investment decision, a move that will be harmful to Australia and Malaysia bilateral trade and investment. The following are a couple of articles regarding the fall out from the proposal, particularly from the perspective of the joint venture.
Super tax bad news: Santos
MATHEW MURPHY
May 7, 2010
OIL and gas producer Santos says it may delay a final investment decision on its $8 billion liquefied natural gas plant in Queensland until it understands the full impacts of the government's resource rent tax.
At its annual general meeting in Adelaide, Santos said it was still hopeful of announcing a new customer from its LNG joint venture with Malaysia's Petronas despite uncertainty hanging over the industry from the announcement on Sunday of a 40 per cent ''super profits'' tax to be levied on the industry from 2012.
''It is difficult to regard the tax proposals as anything other than bad news for the resources sector and the thousands of Australians who work in it,'' Santos chief executive David Knox said.
Santos chairman Peter Coates chimed in, saying people outside Australia have already started questioning the proposal. ''The whole issue lacks clarity. We need clarity to make investment decisions and until [the tax situation] is clear we are going to see investment paralysed,'' he said.
For the rest of the article, go to:
http://www.smh.com.au/business/super-tax-bad-news-santos-20100506-uh19.html
Bligh wants changes to resources tax
DARREN CARTWRIGHT
May 7, 2010
Queensland Premier Anna Bligh wants changes to the new Rudd government resources tax to protect fledgling mining industries.
Ms Bligh told reporters she will next week express her concerns to Prime Minister Kevin Rudd and Treasurer Wayne Swan in relation to the taxing of the liquefied natural gas (LNG) industry.
The federal government plans to impose a 40 per cent tax on mining firms' so-called "super" profits.
"I will be talking directly with the prime minister and the federal treasurer," Ms Bligh told reporters in Brisbane on Friday.
"The mining industry is not only important to Queensland it's important to the whole economy and it's too important not to get it right.
"I am looking for some changes to these proposals. LNG is too important for us to get wrong.
"I want to make sure Kevin understands, in no uncertain terms, just how important it is to get parts of this package right."
For the rest of the article, go to:
http://www.brisbanetimes.com.au/queensland/bligh-wants-changes-to-resources-tax-20100507-uj6d.html
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