Mining tax 'makes no difference'

7 Aug 2012, 6:03 pm   -   Source: AAP
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The world's biggest gold miner says Australia is still one of the best places in the world to conduct business, even with a mining tax. (Getty Images)

The world's biggest gold miner says Australia is still one of the best places in the world to conduct business, even with a mining tax. (Getty Images)

The world's biggest gold miner says Australia is still one of the best places in the world to conduct business even with a mining tax.

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The world's largest gold miner, Canada's Barrick Gold Corporation, says Australia is a friendly place to do business - even with the introduction of the mining tax.

The political environment in Australia was favourable towards the resources industry compared to other countries in which Barrick operated and where companies could be nationalised, the head of the company's Australian arm said.

"The geopolitical climate here is friendly towards mining," Barrick Australia Pacific managing director Mike Feehan told delegates at the Diggers and Dealers' conference in Kalgoorlie on Tuesday.

"You struggle with a lot of the same issues and challenges that we have in North America.

"The shortage of labour is certainly a big one, being able to attract professionals to the business. Regulations have become much more stringent here as in North America.

"I would say the difference between the two are very minor."

Mr Feehan said the introduction of the mineral resources rent tax (MRRT) did not make Australia a hostile place to do business.

"I don't think it makes it unfriendly," Mr Feehan told reporters after the speech.

"Governments across the world will decide what course of action they will take.

"From a business perspective, it is up to us to understand where those costs come from and the cost pressure that come with those taxes."

If gold prices declined, then Barrick would have to manage its costs, he said.

And if the company's costs continued to escalate and gold prices remained stagnant or declined, then Barrick would need to look carefully at its operations and its ability to generate cash.

"Fortunately, we're not in that position today. It's up to us to manage it, so if it does occur then we will be in a much better position in the future."

Mr Feehan said Barrick was continuing with its review of all company assets.

The company allocates 20 per cent of its global exploration budget to the Australia-Pacific region, including Papua New Guinea.

However, Mr Feehan was reluctant to make any predictions about the gold price.

"If I knew, I'd be living on a farm in Wisconsin.

"Really, I don't know what it's going to do."

Despite the uncertainty, he said the company was still looking at acquisition opportunities.

He said that sovereign risk was not nearly as great in regions such as North America, Australia and parts of South America.

Barrick recently reported first half net earnings of $US1.87 billion ($A1.78 billion).

It operates 26 mines and advanced exploration projects around the world, with 140 million ounces of proven and probable gold reserves.

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Your Comments

Mr

frank - from Lismore, 7 months ago

I think that any company mining in Australia should be solely a Australian company, as this means that the wealth is not taken away from our country as it should be 100% kept in our country and not given away on the provision that the company pays a tax on that which is mines, that tax has been known to get thwarted though exemptions that the government has put in place for companies that create wealth for "our" country and those exemption should not apply to a company from Canada.

Sir Maxo

Maxo - from Adelaide, 10 months ago

Tax them mor until it hurts.

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