Investors Warned on Taxes in Coal Mining Industry

It’s unworthy to invest in any venture with the coal industry at this point.

That is according to BHP Billiton head Marius Kloppers, who made this announcement to the British media this week.

Kloppers has blamed the new carbon and mining taxes while earlier assuring Australians that it was not the reason for the ballooning of cost for the Olympic Dam expansion. The project is said to cost about US$30 million.

Recent reports, however, said the Olympic Dam expansion will be axed.

Kloppers comment came after Hancock Coal has just closed a venture with investors. GVK, on the other hand, was given the go-signal by the federal government in relation to the development of the Alpha coalmines. The said project is estimated to cost around $6.4 billion.

Hancock Coal is owned by mining mogul Gina Rinehart.

If Kloppers is correct about his views on the carbon and mining taxes, this could end-up becoming a non cash generating endeavour the GVK might be regretting.

Kloppers said that what he is seeing on Australia’s eastern seaboard is that the coal industry has been affected greatly by lower prices, carbon taxes, higher operating costs, and increased royalties.

Meanwhile, some groups are also opposed to this GVK project for another reason as it looks like it may affect the Great Barrier Reef’s marine life.

The other day, Environment Minister Tony Burke expressed his concerns over this and said that the operations must be managed and monitored under strict conditions.

GVK, on the other hand, said that it is confident with the project’s viability. The company also expects strong global support for the venture.

Its representatives also said that the operating cost for this will be low, while it will help promote more jobs for Australians.