Australia sent the major miners into a tailspin overnight.
The Rudd government announced Sunday night that it will impose a new "resource super profits" tax on mining, oil and gas, geothermal and other resource extraction in the nation.
Under the scheme, resource companies will pay a 40% tax on profits. Implementation is scheduled for July 1, 2012.
The fall-out was immediate.
BHP announced it expects its effective tax rate to rise to 57%, from a current 43%. Citigroup said the new rules could cause the effective tax rate for northern Australia's large liquefied natural gas projects to rise by several percent.
Stocks were down nearly across the board.
A few observations:
One of the few "saving graces" of the new rules is that the tax is on profits. A company has to be making money in order to pay, and producers will pay in accordance with how much cash they're making.
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