Australian mining stocks have endured a three-day hammering by fleeing investors and before yesterday's ASX close, four major stocks had shed a collective $A12 billion ($NZ15.1 billion) in market capitalisation.
A proposed new resources tax, rising from 30% to 40%, was announced to the mining sector on Sunday by the Australian Government, sparking fears among the companies and investors about the negative impact on future earnings for the mining companies.
Craigs Investment Partners broker Peter McIntyre said the tax proposal had prompted several mining sector chief executives to speak out, saying the tax would not pass the legislation stages.
Yesterday, the Australian resources market in general "was retreating at a rapid rate".
"This [proposed tax] is a sound enough reason for investors to sell-off commodity-based stocks, alongside the problems coming out of Greece," Mr McIntyre said.
In trading from Friday's closing prices until yesterday afternoon, BHP Billiton shares shed 6.7% to $A38.19, Newcrest was down 9.6% to $A30.19, Rio Tinto was down 7.4% to $A67.14 amd Macarthur Coal lost 16.5% to $A13.27 per share.
Respectively, market capitalisation losses were BHP, $A8 billion, Newcrest, $A1.4 billion Rio Tinto, $A2.2 billion and Macarthur, $A500 million.
Industry heavyweight Rio Tinto is concerned the 40% resource tax would make Australia's minerals sector the highest taxed in the world; questioning the inclusion of existing operations under the tax and the "apparently arbitrary way" the tax was set at 40%, Rio's managing director for Australia, David Peever said in a statement to AAP yesterday.
"Taxing 40% of profits over the long-term bond rate, together with corporation tax, would make the Australian minerals sector the highest taxed in the world, seriously eroding competitiveness," he said.
