In an escalating backlash from miners against the Federal Government, Fortescue has put its $17 billion expansion plans on hold.
Fortescue Metals Group (FMG) chief Andrew ‘Twiggy’ Forrest claimed he put the expansion of the iron ore projects on hold as a protest of the proposed Resources Super Profit Tax.
It has been predicted that this decision will put 30 000 potential jobs on the line, with Forrest saying the tax will have a devastating effect on FMG’s expansion financing plans, as the miner will not be able to secure the funding needed.
Blue collar workers will be heavily hit by this tax as it will eliminate potential jobs, he added.
Forrest explained that the “devastating impact” the tax will have on the miner’s revenue stream will mean that it will not be able to finance the Solomon Hub or the Western Hub, effectively leaving the projects open to other countries.
Overseas interest have been following the project, offering to take the expansion through to development if Forrest sells off.
Prior to the proposed tax, FMG would have used cash flows from its Chichester hub as a base to build equity for the Solomon hub.
However under the new tax, FMG has no way to build equity to develop new projects, Forrest said.