5 May 2010

Proposed tax hits mining companies

1:36 pm on 5 May 2010

Plans by the federal government in Australia to impose a new tax of 40% on miners have hit mining companies hard on overseas markets.

Shares in BHP Billiton on the FTSE 100 in London shed nearly 8% on Tuesday, the first day of trading since the proposed tax was announced.

Rio Tinto shares lost more than 6% and BG Group, which has a gas project in Queensland, lost more than 4%.

Some brokers say they are worried Australia's tax move might pave the way for other mining countries to follow suit.

Queensland-based mining magnate Clive Palmer, said on Tuesday that the new tax was worse than in Russia and China.

The ABC reports Labor expects the tax would raise about $A9 billion per year.