Metalnewsnet 6 May ：

High profile columnist and former business editor Robert Gottliebsen in businessspectator.com.au claimed today that about A$100 billion (US$90.41 billion) worth of resource projects that were advancing were now heading for mothballs until the resource tax is either abandoned or severely modified.

He reiterated a point made by Mineweb yesterday that BHP Billiton is now in no hurry to expand development of Olympic Dam in South Australia - a project that Labor State Premier Mike Rann "staked so much on."

Gottliebsen, not noted for histrionics, claimed Australia was on "the brink of the greatest capital strike in its history and one of the largest ever seen in the world."

"I have never seen an industry so angry. As we saw in the medical area, Rudd just put the proposal on the table and tried to bully his way through," Gottliebsen said.

"But miners are much tougher than state premiers and the international majors have a raft of projects in other countries that will now take precedence over Australia."

He said that just as the Rudd Government had no idea about the chaos they were creating with the badly structured emissions trading scheme, the inexperienced Rudd team had not the slightest idea of what they are doing to resource projects when they drafted the new tax.

Major miners and industry groups in Western Australia met with Rudd yesterday and there appeared to be no sign of him backpedalling, though some political journalists have been reporting that he may modify the proposal, particularly as it is beginning to cause disquiet in Labor Party ranks.

One source told Mineweb that when told by mining representatives yesterday that Australia would become one of the most taxing countries on mining, he pointed to Finland as being worse.

The same source said Rudd and his advisers did not appear to understand that the impact had not only been on decimating the share capitalisation of BHP, Rio, Fortescue Metals and other majors, but those at the small end of town.

The feedback already was that junior companies were finding stockbrokers losing their ardour for capital raisings.

The major Canadian mining newspaper Northern Miner highlighted how Australia may cease to be competitive for exploration and new mines, and one media report today claimed that Canadians were already telling explorers and resource financiers that Canada would be a better operating environment.

Some Australian newspapers today had banner headlines suggesting Rio Tinto was going to halt about A$7 billion (US$6.33 billion) of new mines and expansions, but Sky Business News this morning said the mixed signals coming out of Rio Tinto in Melbourne  indicated that there may be a pause rather than a mothballing of projects.

Mining lobbies are aware that an election is coming up, and there is a theory going around that Rudd's advisers, seeing a litany of broken promises and billions burned on failed or overstated initiatives, may be telling him that a Robin Hood act would go well.

The Federal election later this year will be fought on swinging seats in the populated New South Wales and Victoria, so punching Western Australia and Queensland in the head may see the venality of the haves and have nots win through.

While Rudd's long honeymoon with the electorate has been backpedalling dramatically, the Liberal Opposition Leader Tony Abbott has to make up further ground for the coming election. Senior Liberal Joe Hockey made a comment now gaining air waves about Kevin Rudd - when he described him prior to the resource rental tax as making policies on the run without comprehending the outcomes.

Over the next week Rudd's ears are going to burn as new data comes out showing how international bankers will start boycotting Australian projects, and how the proposed resource rental tax will cause more harm than good - in the eyes of some of the country's major accounting firms.

The business commentators have already been won over.

One commentator said: "The flower of confidence has been trampled on by our Prime Minister and no one will want to go ahead with a major project unless there is an act of parliament setting the tax rate forever."

(from mineweb)