Investment Did Not Dry Up

25 11 2010

According to an entry on International Mining, it seems that Australia is experiencing an important growth in investment in major extractive projects.

Since April 2010, (remember that the Australian Government unveiled its plans to introduce a New Super Profit Tax on May 2, 2010), capital expenditures for the developments of new projects had increased by 21%. It seems this number does not take in account the capital expenditure associated with BHP Billiton and Fortescue’s iron ore expansion plans. Moreover, the Australian Bureau of Statistics survey data indicate capital expenditure in 2010-11 may be around A$54.8 billion. Other encouraging news is that exploration expenditures seem to have remained strong.

All that to say that the uncertainty caused by the announcement and the subsequent national debate, did not prevent firms from taking advantage of the commodities’ boom. Although, one must highlight that instability was perhaps the only harm caused by the projected tax. Following consultations, the mining industry has been successful in lowering the applicable tax rate and narrowing the tax base to which the super profit tax would have applied thereby preventing Armageddon.




Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: