"China to halve iron ore taxes for its miners
China has sent a blunt warning to governments in Australia that it will strive to keep its domestic iron ore miners afloat by announcing a new round of tax cuts for the embattled industry.
Just days after the Western Australian Government started giving royalty relief to junior miners like BC Iron, China's State Council announced that Chinese iron ore miners would receive a 6 yuan ($1.27) tax cut on each tonne of iron ore produced."
(source: SMH April 9th)
If BHP & Rio's overproduction strategy makes sense then we should see
Chinese and Indian high cost producers close down and Vale( the world's
biggest producer closing some of its more high cost mines)
If that doesn't happen, then Australia, WA and shareholders of our
big 3 will have seriously lost out. Its a very high risk stretegy which
hasnt been fully explained.
The Liberal Governments in Canberra and WA are sticking dogedly
to their ideology of small tax-small government and leaving the
free market to its own devices may, in this case, be not the proper
solution for Australia. According to Joe Hockey we are loosing
tens of $billions from iron ore low prics yet he ir the Premier of
WA is doing nothing about it and "nothing" is not the answer
given that our biggest customer, China, is orchestrating price
via its Communist Government.
