Ann: Results of AGM 2010 , page-3

Minara looks to better tax regimes.

Market watch top headlines.

PERTH, May 25 AAP
May 25 2010, 2:56PM
Minara Resources Ltd says it is looking offshore to more desirable tax jurisdictions as the proposed Resources Super Profits Tax (RSPT) threatens to milk the miner's earnings at an even higher rate than BHP Billiton Ltd.

Minara chief executive Peter Johnstone said the company would continue to seek to diversify from nickel laterites into nickel sulphides and other base metals, focusing on favourable tax environments such as Canada.

"Under the new proposed tax, if the rules come in, it would be much more favourable to look at investments offshore," Mr Johnstone told AAP.

"In the world of nickel, there's no shortage of resources, particularly laterites ... in Indonesia, The Philippines, New Caledonia, Brazil and Canada.

Mr Johnstone's comments follow statements earlier this month by Canadian MP Brad Trost, who said the Rudd government's planned RSPT would give a huge competitive advantage to the mining-savvy North American nation, where corporate tax rates are being reduced.

"We will be the highest taxed (mining sector) in the world," Mr Johnstone said.

"We've given our competitors a free hit."

Mr Johnstone said Minara had been on the hunt for attractive acquisitions for 12 months but would continue to be patient for the right opportunity.

Funding would be more readily available for overseas projects, he said.

Mr Johnstone also said Minara expected to pay a total tax rate of 58 per cent if the RSPT goes through, eclipsing BHP Billiton's predicted 57 per cent tax bill, which has been disputed by the federal government as being much lower.

He said the commonwealth was simply ignoring other non-RSPT taxes that BHP Billiton had factored in such as payroll tax.

"We think BHP's numbers are dead right," he said.

"Our tax will be about 58 per cent and at some point in time, depending on which royalty regime we're operating under, could go above 60 per cent.

Mr Johnstone echoed criticism from Fortescue Metals Group Ltd chairman Herb Elliott on Tuesday for the RSPT's big carrot to the mining sector - a 40 per cent rebate on losses.

Such a rebate would reward companies for pursuing marginal projects, Mr Johnstone said.

"I think it is absurd the government is going to try to pick up 40 per cent of the risks."

Mr Johnstone said the rebate would have seen BHP Billiton receive $A1.2 billion for last year mothballing its $US2.1 billion ($A2.56 billion) Ravensthorpe nickel laterite mine in Western Australia, which was sold to a Canadian copper miner early this year.

"Can anybody imagine that happening? I personally couldn't.

"It is just bad policy. Nobody wants the government to become a partner in second class developments."

He said Minara, along with the rest of the mining sector, was trying to engage with the Rudd government about the tax.

It was unacceptable that talks thus far had been bound by non-negotiable parameters, namely the threshold by which the tax kicks in and its 40 per cent rate.

"Everything should be on the table," he said.

"It has to be overturned."

Shares in Minara declined 4.5 cents, or 6.34 per cent, to 66.5 cents by 1456 AEST.

By Rebecca Le May

http://www.tradingroom.com.au/