Lew Fellowes, of Patersons Securities, says that despite claims by BHP Billiton to the contrary, federal government policy was a main driver behind the company’s decision to put expansion plans on ice.
BHP has deferred a decision on whether to go ahead with an expansion of its Olympic Dam uranium, copper and gold mine in South Australia
It has also decided to not go ahead with a multi-million dollar expansion of the outer harbour at its iron ore operations in Port Hedland in Western Australia.
CEO Marius Kloppers says these were purely prudent, commercial decisions in the face of falling commodity prices and a slow down in demand from key customers like China.
Lew Fellowes, head of Patersons Perth branch, says the investment community firmly believes the decision was in a large part politically motivated.
In particular, he says the Federal Government is starting to realise it won’t reap the high taxes it claimed it would from the tax on iron ore and coal.
That means it will have to target another commodity, and uranium is the obvious one, especially given it has been Greens policy from the very beginning to include uranium in the MRRT.
“There is the issue of commodity prices, but definitely government policy such as the mining tax (MRRT) and the carbon tax have had an impact, even if Marius Kloppers says that’s not the case.
“The MRRT only affects at this stage iron ore and coal, but there is speculation that government may not reach the Budget surplus that it’s forecasting for this year.
“So in years to come, the government of the day may look to expand the tax to other key commodities.
“This is where projects such as the Olympic Dam project would be captured.” – from ABC