Fears of a Labor-style mining tax debacle have been prompted after miners operating in the Northern Territory say they have been “sprung” with a new rehabilitation levy.
The levy, outlined in the upcoming NT budget, has resulted in industry representatives voicing concern over the government’s lack of consultation and analysis, The Australian reports.
Miners say the new levy has been "sprung" on firms who have been given just days to consider its affects.
Industry members will say the proposal shows a lack of understanding of the mining sector, which is currently battling lower commodity prices and mounting pressures, and could end up "punishing" companies for operating efficiently.
Association of Mining and Exploration Companies has said the move is extremely disappointing, and the group’s chief executive Simon Bennison has called on the Territory government to urgently review its plans.
"The proposal should be reviewed immediately as it does not send the message that the Territory is 'open for business' as the government frequently states," he said.
"This additional cost is essentially punishing companies who are operating efficiently today, for other companies legacies in the past."
The proposal will see the value of the NT’s environmental bonds reduced by 10 per cent, and an annual 1 per cent tax would be levied on the remaining 90 per cent.
A move industry argues will bring no good as it requires companies to both borrow up front and fork out cash year on year.
Miners added that it would increase financial burdens and red tape hassles at a time when the Territory is attempting to ramp up exploration efforts.
"At the moment, industry is being hit by a heap of other costs, so the last thing it needs is something like this," Bennison said.
He said the Country Liberal Party government had ignored industry recommendations to set up a mine rehabilitation fund modelled on Western Australia's, and accused the CLP of setting a dangerous precedent by hitting industry with a new levy as soon as it found itself short of cash.
The rehabilitation levy would be imposed on industry to cover the liabilities of previous NT governments, AMEC said in a statement.
NT Minister for Primary Industry, Mines and Energy, Willem Westra van Holthe has indicated the proposal is likely to go ahead but has declined to comment further.
"We would like them to pay a levy which would go towards cleaning up legacy mines across the Territory," he said.
Bennison said industry is yet to see any detail on how the money would be spent and questioned suggestions that a portion would go towards shortening mine approval times saying this should be done regardless.