Xstrata Copper this morning announced it will resume the expansion of the Ernest Henry copper mine in North Queensland, following the Federal Government’s agreement with the mining industry over the Resource Super Profits Tax (RSPT).
The company announced it would the restart the $589 million underground mine development and its $30 million North Queensland regional exploration program.
The miner suspended these projects earlier this year following a review into the potential impacts of the RSPT.
The new Minerals Resource Rent Tax (MRRT), announced this morning, will only apply to coal and iron ore production.
Xstrata, BHP Billiton and Rio Tinto have been locked in negotiations with the Government all week to reach a middle ground on the tax.
The company said the MRRT represents significant progress towards a mineral tax regime that satisfies the industry’s core principles of not applying new taxes retrospectively and ensuring the international competitiveness of the Australian resources sector.
“We have seen some positive outcomes from the recent constructive discussions with the Federal Government,” Xstrata Copper chief executive Charlie Sartain said.
“The proposal to retain the existing taxation and royalty structures for our copper business has given us sufficient confidence to recommence with immediate effect these significant projects that form an important part of our business strategy in north-west Queensland.”
“Our copper operations in North Queensland play a vital role as an economic driver in the region, last year contributing more than $1.3 billion to the State economy and employing over 3500 people.”
According to the miner, the new underground operations at Ernest Henry will extend the mine’s life expectancy to at least 2024 and generate an additional 330 jobs during construction.
The project is also expected to provide 400 full-time jobs once it is completed in 2013.
The expansion is still subject to final Queensland Government approvals.