Australia’s largest magnetite producer is expecting to be out of pocket $11 million by the Gillard government’s carbon tax and diesel fuel rebate.
Grange Resources said it expects to pay almost $10 million a year under the carbon tax, plus an additional $1 million due to the diesel fuel rebate, according to The Australian.
Speaking in Kalgoorlie at the Diggers and Dealers conference, Grange managing director Russell Clark shared his belief that the resources sector should be excluded from the carbon tax because it is an energy-intensive, trade-exposed industry.
Total costs for the company are expected to be around $200 million.
Clark said that as a magnetite producer that processes the mineral in Australia rather than offshore, Grange would be unfairly penalised under the planned carbon tax due to be introduced in July.
"We will get canned in Australia because we do the value-add here," Clark said.
Grange is a member of the MagNet alliance of magnetite companies, which has been lobbying the government to be excluded from the tax.
"I just get this sense that it’s about the mining industry’s ability to pay," he said.
His comments echoed those made by Western Australian Mines and Petroleum Minister, Norman Moore, last month.
Moore told Australian Mining it is unfair to target the mining industry simply because it is experiencing a good period.
“It’s suggested that because they’re making a lot of money right now, that somehow they should have an extra tax,” he said.
“One thing I know about it is it does go up and down, there are peaks and troughs and so there are occasions when they’re making no money.”
Association of Mining and Exploration Companies chief executive Simon Bennison told The Australian it was obvious that the industry is still opposed to the proposed mining and carbon taxes.
"Whatever way you look at it, the minerals exploration and mining sector will be faced with extra costs in doing business as a result of both taxes," he said.
Bennison said junior miners are most concerned, as they will be hit hardest by the reduction to the off-road diesel rebate of six cents per litre.
He said small mining companies in remote areas will be faced with costs of hundreds of thousands of dollars a year.
"These companies will be seriously discriminated against as a result," Bennison said.
Image: Soft Rock Slope Management Systems