BHP Planning Investor Sessions in Australia on Tax (Update1)

May 17 (Bloomberg) -- BHP Billiton Ltd., the world's largest mining company, is planning information sessions in Australia for shareholders following the government's proposal to impose a resource profits tax.

"The risk is that Australia could now be seen by the rest of the world as a less stable and less competitive place for long-term investments," Chairman Jac Nasser said today in a letter to shareholders lodged with the Australian stock exchange, his first since taking over from Don Argus in March.

The Australian government said this month it will levy a 40 percent resources tax on mining company profits. BHP and Rio Tinto Group will meet with treasury officials this week to discuss the tax, which they say jeopardizes future investment.

"Any reform proposal must only apply to new investment, not existing investments," Nasser said. "The proposed super tax fundamentally, abruptly and unfairly changes the rules of the game."

The tax, due to start in 2012, would increase BHP's total tax rate to 57 percent from 43 percent, making Australia's resources industry the highest taxed in the world, BHP said.

Melbourne-based BHP dropped 3.1 percent to A$37.44 at 11:04 a.m. Sydney time on the exchange.