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Thursday, June 17, 2010

AngloGold (NYSE:AU) Latest to Shrink Australian Investment on Mining Super Tax

AngloGold Ashanti Ltd. (NYSE:AU) is the latest mining company to put a hold on Australian projects, as the inability to turn much of a profit from mining operations in the country has miners fleeing to more profitable areas of the world.

"While we are still committed, what should be a 20-year development that our industry so desperately needs, has slipped back down the project priority list," CEO Mark Cutifani said. "It is very difficult for the Board to accept any recommendation when we don't know what it means in terms detail, or we can't guess what great new ideas the Government has up its sleeve."

Cutifani was referring to the Tropicana gold project in western Australia, which had become among the top priority projects the company was going to develop, until the misguided and unpopular tax imposed by the Rudd government on miners.

Other countries have been ecstatic over the situation, as they're promoting all over the place to draw mining companies to their borders, based on of course, less taxation.

Once miners decide to put off a project, it could end up being years, and even decades till they revisit the mine, as it can take up to 10 years just to get one running. If you add the additional years of abandoning the project, and it is increasingly seen the corner the Australian government has trapped itself in, and there's simply no way out until and unless they change or completely get rid of the tax.

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