Global Mining Investment's Robinson Says Tax Cut Is `Amazing Concession'

John Robinson, chairman of Global Mining Investments Ltd., which oversees about A$300 million ($254 million) of assets including shares of BHP Billiton Ltd., Rio Tinto Group and Xstrata Plc, comments on a new resources tax agreement between miners and the Australian government.

Robinson, who was chief executive officer of Ashton Mining Ltd. from 1991 to 1998, spoke by phone today.

On the benefits of the agreement:

“The compromise is a good one. It’s certainly better than I had expected. The reduction in the headline rate is an amazing concession. It removes the uncertainty that’s been overhanging for several weeks.

“One would expect to see the stocks rerated as a consequence. I wouldn’t think there are projects at risk within major mining groups.”

On sovereign risk:

“That perception of sovereign risk is certainly going to linger a while. These things don’t disappear overnight.”

On why the first proposal failed:

“If you design a tax process and you don’t consult, you end up with something that’s pretty much unworkable. It was badly designed from the outset. It was bound to come a cropper.”

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