Nyrstar Says Mining Tax Plans May Affect Expansion in Australia -Shanghai Metals Market

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Nyrstar Says Mining Tax Plans May Affect Expansion in Australia

Industry News 08:57:09AM May 07, 2010 Source:SMM

May 6 (Bloomberg) -- Nyrstar NV, the largest zinc producer, said proposed changes to taxes on mining profits may affect its plans to expand into the industry in Australia.

"Whilst the proposed tax would not apply to our existing operations in Australia, it will become an additional consideration to take into account in the continued execution of our strategy to expand," Michael Morley, Nyrstar's legal and external affairs director, said in an interview today.

Nyrstar has tumbled 11 percent in Brussels trading this week amid a slump in shares of metals companies after Australian Treasurer Wayne Swan said May 2 he would introduce a 40 percent mining tax from 2012. Rio Tinto Group, the world's third-largest mining company, already said it put some Australian expansion projects on hold to study the effect of the proposed tax.

Nyrstar in March bid to buy Australian lead and zinc miner CBH Resources Ltd. for 19.5 Australian cents a share and buy the company's convertible notes for A$1,000 ($934) each. Japan's Toho Zinc Co., CBH's biggest shareholder, offered 24 Australian cents to fend off a full takeover bid by Nyrstar. Toho on April 30 said CBH accepted its offer and signed a takeover agreement.

"CBH is an interesting asset for us but not at any price and certainly the proposed tax needs to be taken into account," Morley said. "At this stage we do not intend to make a higher offer. We will, however, watch developments between CBH and Toho closely." The tax wouldn't affect Nyrstar's current operations as the company doesn't have mines in Australia, he said.

Chile, the largest copper producer, said in March it was studying increasing tax on mining companies, while Brazil said in October it planned to boost tax and royalties.

 

Nyrstar Says Mining Tax Plans May Affect Expansion in Australia

Industry News 08:57:09AM May 07, 2010 Source:SMM

May 6 (Bloomberg) -- Nyrstar NV, the largest zinc producer, said proposed changes to taxes on mining profits may affect its plans to expand into the industry in Australia.

"Whilst the proposed tax would not apply to our existing operations in Australia, it will become an additional consideration to take into account in the continued execution of our strategy to expand," Michael Morley, Nyrstar's legal and external affairs director, said in an interview today.

Nyrstar has tumbled 11 percent in Brussels trading this week amid a slump in shares of metals companies after Australian Treasurer Wayne Swan said May 2 he would introduce a 40 percent mining tax from 2012. Rio Tinto Group, the world's third-largest mining company, already said it put some Australian expansion projects on hold to study the effect of the proposed tax.

Nyrstar in March bid to buy Australian lead and zinc miner CBH Resources Ltd. for 19.5 Australian cents a share and buy the company's convertible notes for A$1,000 ($934) each. Japan's Toho Zinc Co., CBH's biggest shareholder, offered 24 Australian cents to fend off a full takeover bid by Nyrstar. Toho on April 30 said CBH accepted its offer and signed a takeover agreement.

"CBH is an interesting asset for us but not at any price and certainly the proposed tax needs to be taken into account," Morley said. "At this stage we do not intend to make a higher offer. We will, however, watch developments between CBH and Toho closely." The tax wouldn't affect Nyrstar's current operations as the company doesn't have mines in Australia, he said.

Chile, the largest copper producer, said in March it was studying increasing tax on mining companies, while Brazil said in October it planned to boost tax and royalties.