Moody’s says Rio Tinto and BHP are biggest beneficiaries of MRRT
The federal government's mineral resource rent tax on mining companies could leave the country's giant resource industry players largely unscathed as compared to the now-presumed dead resource super profits tax's possible dreadful effects, that according to rating agency Moody's Investors Services.
Moody's said that huge entities such as BHP Billiton and Rio Tinto would eventually come out almost untouched by the new levy though it underscored the obvious possibility that the tax would bring about medium-term effects on less diversified companies such as Fortescue Metals Group Ltd.
Overall, Moody's is under the impression that the revised tax would have "negative credit implications for mining companies involved in the extraction of coal and iron ore, but the impact is significantly reduced compared with the implications of the RSPT."
The ratings agency believed that mining giants should be able to weather any negative impact from the MRRT, should there be any and in such case, Moody's said that Rio Tinto and BHP could very-well manage such effects.
It said that the new proposal would actually deliver some welcome reprieve for many more Australian mining companies, which are not into coal and iron ore explorations, should all of the country's resource projects would have been levied by the RSPT.
Moody's explained that "the new tax not only reduces the tax burden on coal and iron ore operations (relative to RSPT), but also exempts other products, such as nickel and copper, which would have been captured under the RSPT."
It said that clearly, giant mining companies such as BHP and Rio Tinto would benefit well from such favourable proposal.