Miners laud Australia’s move to repeal carbon tax

Miners with operations in Australia welcomed the repeal of its carbon tax, underlining how companies in the country had been put at a disadvantage to competitors as a result of it previously.

July 18, 2014

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Mining giant BHP Billiton said it was not the best solution to address environmental concerns.

“BHP Billiton believes that the recently repealed carbon tax did not represent an optimal approach to reducing emissions and had a detrimental impact on Australia’s competitiveness,” it told Steel First via email on Friday July 18.

“Our view is that an effective, long-term climate change policy framework should use a portfolio of complementary measures to reduce emissions and build resilience. This should include a price on carbon that addresses competitiveness concerns, support for energy efficiency improvements and the development and deployment of low emissions technologies, together with measures to respond to the physical impacts of climate change,” the miner said.

Australia’s Senate voted 39-32 on Thursday July 17 to repeal the carbon tax that came into effect two years ago, becoming the first developed country to make such a U-turn.

“The primary impact of repealing the carbon tax on businesses is to reduce the cost of inputs. The main driver of these cost increases is the impact of the carbon tax on energy prices – primarily electricity and gas,” according to Australian government’s release on Thursday.

Rio Tinto and Fortescue Metals Group could not be reached for comment, but the former’s ceo Sam Walsh was quoted as saying by Australian media that the tax had put the country and its companies at a disadvantage to competitors.

Peabody Energy released a statement on Thursday July 17 expressing its support for the tax repeal.

“We encourage US policymakers to take the same path and reject the administration’s costly proposed rules on power plants. Technology, not caps and taxes, is the key to long-term improvement in carbon emissions,” its chairman and ceo Gregory H. Boyce said in the statement.

“The scrapping of Australia’s carbon tax will lower iron ore miners’ costs, which will provide room for iron ore prices to fall further amid the current downward trend,” an iron ore trader in Beijing said.

The repeal of the carbon tax means Australian Prime Minister Tony Abbott has made good his election pledge.