Mining Tax

Magnetite ore is of little value in its unprocessed state. Unlike hematite iron ore (or Direct Shipping Ore, DSO), magnetite ore has a lower iron content and requires more complex processing so that it can be converted into concentrate or pellets before being exported to steel mills overseas.

MagNet supports the repeal of the Minerals Resource Rent Tax (MRRT).

The prior Federal Government’s stated objective was to tax the value of the resource at the point it is extracted from the ground. Magnetite ore is of very low iron content and therefore of little value in its raw state. The former Federal Government stated that it expected to recover little or no tax from magnetite miners under the MRRT, yet compliance costs and perception of increased sovereign risk are massive investment disincentives.

The announcement of the current Federal Government to repeal the MRRT will help attract extra investment for the expansion of a new industry that is jobs-intensive and part of the global carbon solution for steel-making.

The negative unintended consequences of the MRRT include:

  • Penalising an emerging value-adding regional-based industry;
  • Slowing down finance for massive capital expenditure projects that deliver economic stimulus;
  • A disincentive to an industry with lower emissions in steelmaking than traditional hematite ore;
  • Significant compliance costs for a negligible tax liability, and
  • Threatening to undermine investor confidence at a time when producers are making decisions critical to the industry’s development

For more details, refer to the attached documents prepared by MagNet for stakeholders and decision-makers.

Oct 2013 Submission to Department of Treasury on Repeal of Minerals Resource Rent Tax
Nov 2010 Submission to Senate Select Committee on Mining Tax
Dec 2010 Supplementary submission to Senate Select Committee on Mining Tax
Nov 2010 Submission to Policy Transition Group on the Mining Tax
Jul 2011 Submission to Treasury on the Mining Tax
Oct 2011 Submission to Treasury on MRRT Bill 2011 Second Exposure Draft
Dec 2011 MagNet submission to Senate Committee on Economics on MRRT