The Australian government on Monday invited Indian companies like CIL and NTPC to participate in a dialogue it has initiated with the local mining industry, a move to assuage their concerns over the proposed 40 per cent super profit tax on mining.
"Well, we currently are in a consultation process with the mineral and energy industry. Indian companies that are interested are very welcome to approach the treasury consultation process as well, or they need to approach the minister for mineral and resources for information," Australian Foreign Minister Stephen Smith said.
Even as Indian firms like Coal India Ltd (CIL), NTPC and Tata Steel were looking for opportunities to acquire coal mines Down Under, the Australian government proposed imposing a super-profit tax of 40 per cent on mining in the country.
India currently has a coal supply-shortfall of about 80 million tonnes, which would be partly met by acquisitions. NTPC CMD R S Sharma, a part of the Indian delegation here, said they had no choice but to keep looking for coal assets in Australia.
"That (the proposed tax) is not good. We can request for some relaxation," Sharma said after attending the Australia-India Energy and Minerals Forum. Last week, global giant Xstrata had suspended its proposed $600-million expansion project in Queensland -- citing the proposed levy as the reason.
Besides Xstrata, many domestic miners have also held back their investment plans in the sector owing to the tax. However, Smith, enthused confidence that the proposed levy will not repel investments in the sector.
Instead, the "industry will continue to grow in strength to strength," he added. When asked if the proposed levy could hurt investments in the country, he replied in the negative.
"Historically, in Australia we have seen the introduction of changed policy arrangements. There have been a range of policy changes over a decade, where people saw a surge of investments that transpired when the petroleum resource tax was introduced in the 1970s," Smith said.
"People said that there would be a fall in investments. But in the last six months, we have seen the largest petroleum resources contract through the Gorgon project," he said. Smith said the mining sector would continue to grow on the back of surging demand from India, China and Africa.
"There will continue to be very strong investments from domestic as well as overseas industries. The prospects and potential of the industry remain very strong because of the growing markets in China, India and Africa. Very strong indeed," he added.
