West Australian Premier Colin Barnett has renewed his attack on the federal government's mining tax, saying it had raised concerns in China about sovereign risk in Australia.
Mr Barnett has been an opponent to the Mineral Resources Rent Tax (MRRT) from the outset.
"Without doubt, the biggest impact has been on Australia's reputation as a reliable supplier of resources and a secure destination for investment," he said in a speech prepared for the Commonwealth Business Forum dinner in Perth on Wednesday.
He said that at meetings he had with Chinese political and business leaders, the conversation invariably began with complaints about the MRRT.
"I do my best to reassure them," he said.
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China is a major buyer of WA iron ore and investor in a number of major resource projects in the state.
Mr Barnett said the concern was about a new tax when projects were already in construction or planned and upfront investment had already been made.
"For the first time in my 20 years in politics, I have heard the term 'sovereign risk' raised in an Australian context."
The premier said that at the very least, the higher cost and lower grade magnetite iron ore projects should be exempt from the MRRT.
He said some proposed magnetite projects had already lost their financial backers.
The WA government would continue to strongly oppose the MRRT, Mr Barnett said.
"Let's recognise the importance of mining and take care to avoid damaging it. For Australia, the MRRT is an "own-goal", he said.
