Cape Lambert Suspends Iron Ore Project After Tax Proposal; Shares Tumble
Cape Lambert Resources Ltd. suspended exploration at its Cape Lambert south iron ore project in the Pilbara region after the government proposed a 40 percent mining tax.
“We are reallocating the A$10 million ($9.1 million) to A$15 million we were going to spend on exploration on our one iron ore project in Australia to an iron ore project in Sierra Leone,” Tony Sage, executive chairman of the Perth-based company, said in an interview.
The proposed tax threatened investment in the nation, Marius Kloppers, chief executive officer of BHP Billiton Ltd., the world’s largest mining company, said after the government released the proposal this week. Australia would become the most highly taxed mining country, reducing its competitiveness, according to Citigroup Inc.
“We are reallocating resources while there’s uncertainty, maybe for a year or so,” said Sage. Cape Lambert owns projects in Australia, Sierra Leone and Greece, as well as shareholdings in a number of exploration companies.
Cape Lambert declined 4.8 percent to 40 cents at 11:43 a.m. Sydney time on the Australian stock exchange.