The Wall Street Journal reported that BHP Billiton and Rio Tinto might re evaluate plans to merge their Western Australian iron ore operations if an agreement is not reached by year end.
It reported BHP CEO Mr Marius Kloppers said the deal's completion was hampered by a proposed new Australian tax on mining profits. WSJ quoted Mr Kloppers as saying that “I still want to do it. We have many hurdles to jump through and the tax brings in uncertainty."
Mr Kloppers and Rio Tinto CEO Mr Tom Albanese, met recently on the subject, the Journal quoted Kloppers as saying, and the two companies agreed to make December 31 the proposed deal's end date.
Mr Kloppers said BHP would be working to defeat the government's tax plan, the Journal reported, and would invest elsewhere if it were approved, for example in Brazil and Peru. He said “There is no geological scarcity of copper, iron ore, nickel or other minerals.”
The new 40 percent resource rent tax has angered the mining industry generally and sparked talk among some of reconsidering Australian projects. But earlier this week Kloppers had told the Australian Broadcasting Corporation both parties were keen to pursue the planned joint venture despite the tax.
The plans by the two miners to merge the iron ore operations have upset major customers, particularly in China, and are the subject of reviews by regulators in Australia and the European Union.