Australia's big mining players have criticized the Rudd government over its proposed 40 percent super tax on profits of resource companies, including the mining sector, saying the new measure was "too punishing" for them.

Rio Tinto managing director for Australian core business Bill Champion said: "We aren't opposed to a profits tax but we are interested in a tax reform that encourages investment."

Earlier, Andrew Forrest, head of Fortescue Metals, the third largest iron ore mining group in Australia, said negotiations with the government's new tax regime were "futile." Fortescue announced early this week that it was putting on hold two iron ore projects because of the uncertainties created by the tax.

Forrest quoted a government official as telling the miners to change the government if they want to get rid of the controversial tax.

David Peever, Rio's managing director for Australia, suggested that the government abandon the tax measure and exempt projects that were already existing prior to the new tax measure.

"You can't disadvantage investments already made. We need to make sure Australia in the resources sector remains competitive so that we can continue to grow that sector. The tax as it is currently proposed doesn't satisfy either of those tests," Peever said

Australia's Treasurer Wayne Swan said the government was sincere in reaching a compromise with the miners.

But despite the consultations, many mining companies have put their projects on hold.