Michelmore warns against new tax

MMG chief executive Andrew Michelmore has said a new mining royalties system may, "kill the goose that lays the golden egg."

MMG chief executive Andrew Michelmore has weighed in on the potential changes to the mining royalties tax system, saying that the Federal Government, “kill the goose that lays the golden egg.”

“It could have a significant impact on new investment,” Michelmore said in a teleconference yesterday.

Michelmore’s comments are referring to the proposed Henry review, which reports suggest will recommended changing the tax regime on mining projects from one of state-based royalties to a national resource rent tax.

The MMG chief said that any such change risks cannibalising the resources industry.

“If you want to go and hit it (industry) with more taxes, you will kill the goose that lays the golden eggs,” he said.

Michelmore’s words came during the presentation of MMG’s December quarterly report, where it was revealed that the pipeline accident at its Century mine last year has had a significant impact on zinc.

“Zinc production for the quarter was impacted by the failure of the century pipeline on 5 October 2009 and the subsequent concentrate production shutdown,” the company said in the report.

The company produced 55,906 tonnes of zinc in the quarter, a steep drop from the 206,515 it produced during the same period in 2008.

MMG’s full year zinc production was also down at 439,046 tonnes, a 41% drop from the previous year.

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