BHP Billiton CEO Marius Kloppers. |
"Stay out of Australia," BHP boss tells foreign investors. "The Mining Boom is over," Australian Federal Resources Minister Martin Ferguson tells the world.
Two days after mining giant BHP Billiton announced it was scrapping a $30 billion expansion plan in South Australia, its chief Marius Kloppers has warned European investors to stay away from Australia while the Federal Minister for Resources Martin Ferguson abruptly told the world that the mining boom in Australia is over.
According to Fairfax reports, Kloppers told British media that new investments in Australia's coal sector would not be profitable given the country’s carbon and mining taxes.
Klopper’s statement comes after he reassured Australians that the taxes were not to blame for BHP axing the Olympic Dam expansion and just hours before a joint venture between Gina Rinehart's Hancock Coal and GVK won approval from the federal government.
Klopper’s statement comes after he reassured Australians that the taxes were not to blame for BHP axing the Olympic Dam expansion and just hours before a joint venture between Gina Rinehart's Hancock Coal and GVK won approval from the federal government.
Rinehart has got a go-ahead to develop its Alpha coal mine and rail project, which has previously been estimated to cost $6.4 billion.
Australian Resources Minister Martin Ferguson. |
"It seems to me that there is broad industry movement towards personnel reductions, contractor stand-downs and so on in the coal industry," Mr Kloppers said.
A report released on Tuesday showed BHP Billiton's full year net profit has slumped by more than a third to $A14.77 billion. Following the announcement, the mining giant announced its plans to scrap the massive Olympic Dam open pit expansion and would now investigate an alternative, less expensive expansion.
Blame game heats up
Tony Abbott has been accused of running "one of the most dishonest, self-interested fear campaigns" seen in Australian politics as a row rages over BHP Billiton's decision.
Kloppers says the decision to can the $30 billion project was forced by rising costs and weaker commodity prices, and had nothing to do with the mining tax, which does not apply to the copper, uranium or gold extracted from the site.
Australia's Opposition Leader Tony Abbot. |
His comments have sparked a fierce counterattack from the Government, with Finance Minister Penny Wong accusing him of running a baseless fear campaign.
But Labor has its own problems on the issue, with Senator Wong contradicting Resources Minister Martin Ferguson's earlier assertion that "the mining boom is over".
The political row erupted yesterday when Mr Abbott went on the offensive in the wake of BHP Billiton's decision to delay the flagship South Australian project.
"I didn't say that the carbon tax and the mining tax were solely to blame. I said that the carbon tax and the mining tax have created an environment where it's much more difficult for investments like this to go ahead," he told host Leigh Sales.
Australia's Finance Minister Penny Wong. |
"Why does it say nowhere in the BHP statement that there's anything to do with the Federal Government?" Sales asked. "If you go through the documents they blame weakness in commodity markets, industry-wide cost pressure, instability in the euro zone, the slowdown of growth in China."