June 6 (Bloomberg) -- Xstrata Plc, which has shelved spending on A$6.6 billion ($5.6 billion) of Australian projects because of a planned mining tax, said it's "optimistic" the levy will be changed after future talks with the government.

Xstrata, based in Zug, Switzerland, said June 3 that A$586 million of work expanding the Ernest Henry copper mine and the A$6 billion Wandoan coal project aren't viable under the new tax. The announcement made the company the first global miner to suspend major work because of Prime Minister Kevin Rudd's planned levy on mine profits.

"We're optimistic the tax as proposed will be revised and rethought in total," Xstrata Coal Chief Executive Officer Peter Freyberg said in an interview with Sky News broadcast in Australia today. "We would like to engage in discussions to try and find a way forward for these projects."

Freyberg said in the interview that the shelved projects could "possibly" be implemented rather than scrapped. Still, that won't be possible if the tax proposal goes ahead unchanged, he said.

"Xstrata wants to show they are open to dialogue, but those talks have to involve the government reanalyzing this proposal and starting from scratch," Gavin Wendt, senior resource analyst with Mine Life Pty in Sydney, said by phone. "I can't see the government backing down. It would be political defeat. We're going to see a stalemate."

Media Battle

The desire for talks comes as the media and advertising battle between Rudd's government and those against the tax, including the Minerals Council of Australia, intensifies.

BHP Billiton Ltd. and Rio Tinto Group, which are reviewing projects in Australia, are campaigning against the tax. Fortescue Metals Group Ltd., Australia's third-largest iron ore producer, last month put $15 billion of projects on hold. Xstrata is the world's largest thermal coal exporter.

Last week, the head of Australia's sovereign wealth fund, the Future Fund, became the latest business leader to criticize the planned 40 percent tax on so-called super profits. David Murray, the fund's chairman, said the tax should be amended or scrapped and shouldn't apply to existing projects.