Photo by: Reuters
PERTH (miningweekly.com) – Iron-ore prices could fall by as much as 30% or more, analysts Gavekal and HSBC have warned, prompting the Western Australian Chamber of Minerals and Energy (CME) to again warn about the consequences of implementing further taxes on iron-ore.
CME CEO Reg Howard-Smith said this week that the warning further underscores the volatility of the iron-ore and resources sector and highlights the need for a considered, stable environment to enable the sector to operate and grow, creating jobs and opportunity along the way, as well as returning income to the state.
“These forecasts by world leading experts highlight the fact it would be foolish to bank on iron-ore prices staying at their current levels,” he said.
“Unfortunately, plunges in the price of iron-ore is bad news for Western Australia’s budget but it also highlights the fact that, if implemented, the mining taxes will [have an even greater] effect on investment into Western Australia and, therefore, result in job losses.
“With volatility on the horizon and challenges from global competitors ever present, the Western Australian Nationals’ proposed iron-ore tax is the single biggest economic threat to Western Australia’s economy.”
Western Australian Nationals leader Brendon Grylls has proposed imposing a A$5/t iron-ore production levy on BHP Billiton and Rio Tinto, to replace the current 25c/t payment.
Both iron-ore majors have rejected the A$7.2-billion levy increase, warning that it would place jobs and competitiveness at risk.