Australia’s proposed tax on mining profits delivers economic reform for the long-term and provides “fair value” to the population of the world’s biggest exporter of coal and iron ore, Treasurer Wayne Swan said. “We as a country need a profits-based tax because the prices of our commodities are going to continue to increase,” Swan said in an interview on Sky News. “Our terms of trade are increasing and the Australian people are entitled to a better share of those resources that they own 100 percent.” Prime Minister Julia Gillard agreed to cut the planned tax to 30 percent from 40 percent and raise the levy’s trigger level, a week after ousting Kevin Rudd as the nation’s leader to defuse a dispute that’s damped the government’s election prospects. Xstrata Plc, which led the campaign against the initial tax proposal with BHP Billiton Ltd. and Rio Tinto Group, resumed work yesterday on a copper project in Queensland state. “The broader industry hasn’t been consulted,” said Gavin Wendt, senior resource analyst with Mine Life Pty Ltd. in Sydney. “So far it’s only been BHP, Rio and Xstrata. You’d have to think that whatever’s been reached is going to be favorable to the big companies, and not necessarily for the small to mid-sized companies.” Gillard’s compromise minerals tax takes effect July 1, 2012. It will apply only to coal and iron ore mines and affect 320 companies instead of the 2,500 under Rudd’s proposal. The pact gives “certainty to the mining industry,” Gillard told reporters today in Mackay, according to an e-mailed transcript from her office. To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net

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