The Australian government has reached a deal with mining companies over controversial ‘super tax’ plans.
The new Minerals Resource Rent Tax (MRRT) will apply only to iron ore and coal projects, while a Petroleum Resource Rent Tax, currently applicable to offshore oil and gas projects, will be extended to onshore oil and gas projects, Prime Minister Julia Gillard said
Former Prime Minister Kevin Rudd had originally announced plans for a 40% tax on miners' profits.
But a compromise agreement negotiated by his successor has reduced the rate to 30% for coal and iron ore miners.
Smaller iron ore and coal companies, with annual profits below A$50M (US$42M), will not be required to pay the new tax. About 320 companies will be affected by the MRRT. The plans are still expected to raise billions of dollars for the government, however.
When Mr Rudd announced the tax plans earlier this year, he said he expected to raise A$9bn a year.
The revised plan would raise A$1.5bn less, the government said, but cuts to company tax rates that were to be paid for by the mining tax will still go ahead.
Companies including BHP Billiton and Rio Tinto had launched an aggressive lobbying campaign against Mr Rudd's tax plan, warning that it could harm economic growth.
But industry executives welcomed the fresh deal, calling it "a positive outcome".
Ms Gillard said the reforms would maintain Australia's attractiveness as an investment target and bolster the economy.
Many political observers suggest that, having stuck a deal, Ms Gillard's Labor Party - which has already seen a surge in the polls following her becoming leader last week - may call an election imminently to capitalise on its popularity.