Fortescue Metals Group executive director Andrew Forrest yesterday revealed he was within 24 hours of reaching an initial agreement with former prime minister Kevin Rudd on the government's proposed RSPT.

The negotiation included lifting the rate at which the 40 per cent RSPT kicked in, from 6 per cent to 15 per cent; instant deductions for new capital and moving the taxing point for resources to where they were dug out of the ground, instead of after processing.

Addressing BHP Billiton and Rio Tinto's primary concern of retrospectivity, the deal also doubled the value of existing capital and allowed full transferability of liability across projects within a tax-paying group.

The resource industry is now calling on Julia Gillard to come up with an even better tax proposal.

Yesterday, the mining magnate said the new prime minister had to ensure she won a "substantially improved" position in discussions on the tax.

"It would be a great shame if the finalised outcome of any negotiations between the Gillard government and the mining industry were anything less than what was achieved while Mr Rudd was prime minister, otherwise his departure will be recognised as futile," Mr Forrest said.

BC Iron managing director Mike Young, who last year made Fortescue a 50-50 partner in his Nullagine joint venture in return for access to rail and port infrastructure, said that while the proposals were a move in the right direction, what was fitting for one miner would not necessarily be right for another.

"What is good for FMG is not going to be good for BC Iron," said Mr Young.
"What the government is doing is talking to the big guys, cutting a deal, and the little guys get shafted."

The Association of Mining & Exploration Companies, which speaks for the smaller end of the industry, also said the negotiations in Mr Forrest's deal did not go far enough.

"On first glance at the Fortescue proposal, there is still an enormous amount of work to do," association chief executive Simon Bennison said.

"We want to start with a clean slate, not tinker around the edges. The 40 per cent tax rate still remains, which is a big issue."