Greek Australian former mining magnate Kerry Harmanis has come out strongly opposing the government’s proposal to tax mining companies a super tax of 40 percent.
The proposal was one of the many recommendations outlined in the Henry Tax Review that was announced a fortnight ago. The government adopted this recommendation while rejecting a number of others.
“Whatever way you look at this… 40 per cent tax is 40 percent tax,” Mr Harmanis pointed out emphatically.
He explained that he didn’t approach the matter through political prism but rather with common sense as a former active mining executive and a current investor in the field. Kerry
Harmanis was the founder and CEO of Jubille Mines a major nickel producer based in Western Australia which was bought out in 2007 by Xstrata in a deal worth more than $3 billion.
He predicted that this announcement will have a major impact on future mining projects resulting to a loss of jobs.
Mr Harmanis was also critical of the government not clarifying details of the proposed scheme and how it’s going to take effect.
The government has announced that the tax will take effect in 2012 but at the same time has indicated that it will negotiate its implementation process with mining companies.
Mr Harmanis noted that the government is creating a climate of uncertainty in the industry as mining projects take years of planning involving great risk.
“Most mining exploration projects don’t turn up to be mining [opportunities]. This tax doesn’t recognise all the pre production risks and all the wasted money in the ground looking for projects, developing them, assessing them…” He further argued that the government appears to be targeting the mining companies with a heavy tax in a populist attempt.
“Why single out the mining companies why don’t you pick on the banks…because politically mining companies seem to be an easy target,” Mr Harmanis said.