Economy

Rio Tinto, BHP Billiton, Xstrata make offer on Super Tax

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Economy
Written by Roberta Murray   
Wednesday, 16 June 2010

Morning Business News, Wednesday 16 June: Rio Tinto, BHP Billiton, Xstrata plc and BP Plc future at stake as Brazil reviews deals.

 

Rio Tinto Plc (LON:RIO), BHP Biliton Plc (LON:BLT) and Xstrata Plc (LON:XTA) have all met earlier today with Australia's Federal Government in Canberra.

The meeting is the latest to try and thrash out a deal over the Resources Super Profits Tax (RSPT) - a tax that Australia seeks to impose in order to ensure the miner's contribute their 'fair share' to the Australian fiscus. The miners argue they are already contributing more than enough.

During the meeting Rio Tinto, BHP Billiton and Xstrata outlined three fundamental areas of concern with the Resources Super Profits Tax (RSPT):

Ensuring the RSPT is not applied retrospectively, so existing projects where investment decisions have already been made are not affected;

The need for an effective tax rate that retains Australia's international competitiveness as an investment destination; and

Stability arrangements for taxes and royalties for existing and new projects.

At present there is no formal acknowledgment from Government that these key issues will be addressed. But what the terms laid out by the miners does suggest is that they are willing to accept the tax, in whatever form, is going to stay. Earlier this month Rio Tinto had suggested they would scale back their mining operations in Australia.

BP Plc


From his desk in the Oval Office, President Obama demanded last night that BP Plc (LON:BP) hand over control of compensation payments for the Gulf Coast oil spill and challenged America to break a century of addiction to fossil fuels to ensure that such a disaster never happens again.

As official estimates of the oil being spilled rose to 60,000 barrels a day - twelve times the original figure - Obama vowed that BP would pay for its “recklessness” and promised that 90% of the oil pouring from the ruptured well would be captured “in the coming weeks”, the Times reports.

BP’s credibility as an international oil company was under further threat last night after the Brazilian Government raised doubts over its $7 billion deal to buy deepwater assets in Brazil.

The Times has learnt that the Brazilian oil industry regulator is reviewing the BP deal with Devon Energy announced on March 11 — six weeks before the Deepwater Horizon blast that killed 11 people and sent hundreds of thousands of barrels of oil spewing into the Gulf of Mexico.

Top Brazilian officials are being sent to Texas to question BP about the catastrophe. 

 
 
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