WSJ:
Australia's mining giants won support on key concessions in the battle over taxes on the country's $71 billion iron-ore and coal-mining industry, dealing a blow to government efforts to limit credits on future royalties.
The tax proposals have been a flashpoint of national debate this year, prompting the ouster of former Prime Minister Kevin Rudd and almost toppling the now minority Labor government.
The government's Policy Transition Group, chaired by former BHP Billiton Chairman Don Argus, said after five months of consideration that future royalty increases imposed on mining companies by Australia's state governments should be credited against federal taxes.
The government had previously insisted that only current royalties, not future ones, would be credited to the miners.
The Minerals Resource Rent Tax will impose an effective tax of 22.5% on mine operating profits more than 7% above the long-term government bond rate—equivalent to a profit margin of 12.56% based on the current yield on 10-year government debt—once miners earn more than 50 million Australian dollars a year in profits. In contrast to the previous, it will apply only to coal and iron ore—the most-profitable mined commodities.
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