Reports suggesting that the government is close to a compromise deal on the proposed 40 per cent mining tax saw mining shares climb today, bouyed on the news of a more favourable environment.
Citing unnamed sources, Fairfax reported that BHP Biliton, Rio Tinto and Xstrata, in talks with the Treasurer Wayne Swan and Resources Minister Martin Ferguson, have agreed the 'key elements' of a deal on the piont on the profit scale that the tax would kick in.
A doubling in the rate at which the tax kicks in from six to 12 percent was chief among the concessions offered by the government, the report said, with ground also given on applying the levy to existing projects.
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"It was unclear... what deal had been struck on the headline (40 percent) rate, but the government is believed to have also given ground on this point, with people with knowledge of the talks saying the two sides were 'nearly there' on an agreement," The Age said.
While shares in the big mining companies were lower in general, they rose towards the end of the day.
The tax reforms, announced in May, helped trigger Rudd's demise as a furious campaign by mining firms affected his popularity, prompting Gillard's quickfire leadership challenge last week.
Gillard, who is Australia's, facing elections within months, acted quickly to resolve the impasse after taking power, calling on miners to end their campaign and return to the negotiating table.
In return, she cancelled government advertising and promised "genuine consultation" with the powerful mining industry, whose raw materials exports to Asia are central to Australia's recession-beating prosperity.
Deputy Prime Minister Wayne Swan declined to confirm the reports of a compromise, saying talks were "constructive, but they've got some way to go as yet".
"I can't put the timeframe on those discussions, but certainly it's our wish that we resolve this matter as soon as we practically can," Swan told commercial radio. "The most important thing is to get the right result."
Mining stocks surged following the report, with BHP Billiton bouncing 1.55 percent and Rio Tinto gaining 1.81 percent, though both remained in the red in a broadly lower market.
