Australian mining group BHP Billiton may be facing a more competitive tax rate – this time, in Liberia.

BHP Billiton recently announced to develop its iron ore project in West Africa and it might be slammed with a bigger tax rate than Australia's controversial resource super profits tax.

The head of Liberia's National Investment Commission said that BHP's iron ore mining development agreement with the country will allow them to operate with a tax rate of 30 per cent and royalties of 3-5 per cent.

Australia's RSPT has a 40 per cent tax rate on mining sector, including a tax credit for state royalties.

Richard Tolbert, chairman of the LNIC, said the tax rate for the West African project was worth between $US2 billion and $US3 billion.

“I think the (Liberian) fiscal regime is as fair for the country as possible but we've also tried to be competitive with international standards," Mr Tolbert told Dow Jones Newswire.

"It's considerably more generous than what they're getting in Australia."

Mr. Tolbert said the maximum corporate income tax rate in Liberia was 25 per cent, however, it may increase up tp 30 per cent for the mining industry. For BHP's contract with Liberia, special provisions have been made wherein it could allow for more than 25 per cent to be taxed.

An analyst said that Liberia's proposed tax rate was the same to what BHP was paying in Australia.

"If they are set to pay that in a fiscal agreement for the life of the asset, then they will be locked in and won't have a Kevin Rudd to come in and change it," he said.

BHP's chief executive Marius Kloppers has vehemently opposed the RSPT, stating that many investments will be driven away from Australia and put their projects overseas instead.