Details scarce on FMG’s mining tax challenge

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Confusion surrounds Fortescue Metals Group and its High Court challenge against the mining tax, with the company giving mixed messages about its intentions.

According to The Sydney Morning Herald FMG said it would "push ahead" with its battle against the tax after it had finalised its legal advice.

"The company has engaged senior counsel and will commence legal proceedings after the legislation has been enacted and legal opinion has been finalised," it said.

But PerthNow reports FMG director of development Peter Meurs told reporters there was still no certainty about the action.

"We’re looking at what’s legal and what’s not," he said.

"We will wait and see what advice we get before we decide what we do."

The Western Australian Government has already given its support to any challenge to the tax, with Premier Colin Barnett again arguing the legislation’s unfairness.

"Western Australians and the mining industry are understandably upset because this tax is basically a tax on WA," he said.

Barnett said the tax targeted resource rich states and 65 per cent of the money raised would come from WA and be distributed to other states.

"This tax is discriminatory — it only picks up on iron ore and coal," he said.

“Where do you find iron ore and coal? In Western Australia and Queensland. So it’s the other States taxing the mineral States on the false premise they belong to the commonwealth.”

FMG said it was "not opposed to paying our fair share of taxes", but the mining tax had been poorly designed and was unfair on smaller companies.

The Association of Mining and Exploration Companies also said it would support legal action against the tax from its members but so far nothing was definitive.

AMEC said the Queensland Government joining WA in supporting a court battle was also a possibility.

Yesterday the mining tax passed the Senate with the support of the Greens 38 votes to 32, and the Gillard Government celebrated what Treasurer Wayne Swan labeled a "huge economic reform of our time".

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