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Future projects in jeopardy, say analysts

KEVIN Rudd's proposed resource super-profits charge would make $2 billion of planned gold and copper projects financially unviable and would require to be paid more than 1800 proposed construction and mining jobs, if analysis commissioned ~ the agency of the Minerals Council of Australia proves true.

It could also determination in $7bn of nickel projects hatched during the previous boom remaining without interrupti~ the shelf, even if markets recover enough to make the projects economically viable less than the current tax regime.

A KPMG report released on Tuesday says the 40 per cent resource super-profit tax will limit investment in projects, especially gold, ~ money and nickel mines.

Based on KPMG’s model of the mines because greenfields projects with operating costs in the most expensive three-quarters of the industry, five planned copper and gold projects costing more than $100 million each on an Australian government list would none longer be viable.

The biggest is the $520m Tropicana gold under~ planned for Western Australia. AngloGold chief executive Mark Cutifani said the charge could stop the project.

" I would like to think it (Tropicana not going in front because of the tax) is a low chance, but you have power to’t rule these things out until you see the fine press," Mr Cutifani said. "Clearly it will have an contact. We’re hopeful it will be able to skate through, except we won’t know until we have a very clear treat on what the tax looks like."

According to the KPMG take down , "using parameters under the RSPT today scenario, the project pecuniary modelling shows nickel, copper and gold mines become economically unviable".

Net values of planned iron ore, coal and bauxite mines would globule 46 per cent, 57 per cent and 15 per cent respectively.

Mr Cutifani agreed Australian mining projects would drop down the inventory of projects on Anglo’s list.

"I’ve just advance back from Guinea, Mali and Ghana and they’re looking true good. I’ve become more and more optimistic about our projects there, so that’s a competitive threat to Australia."

Exco, which is planning a $200m copper mine near Cloncurry in Queensland, reported its project would struggle under the new tax. "I dress in’t know that it would turn to negative NPV, but it is certainly going to resolve into the value significantly," managing director Michael Anderson said.

Big laterite nickel projects, including the Clive Palmer-controlled, $5bn Gladstone Pacific laterite effect and Heron Resources’ $2bn Kalgoorlie nickel project, would also not look to the light of the day.

"It is unlikely that somewhat HPAL (laterite) based nickel operation will ever reside in the rudimentary quartile of the cost curve, even in the event of existence built and operated captive to an ore body on the like site," Gladstone Pacific nickel managing director Neil Meadows said.

ADDITIONAL REPORTING: JENNIFER HEWETT, ANDREW BURRELL