The Prime Minister is prepared to deal directly with senior mining leaders over the controversial resource super profits tax to halt a public brawl between the industry and the government.

Prime Minister Kevin Rudd has requested both parties involved in the wrangle to have direct negotiations and not use media ads for trading insults as they have done for the past month.

After the public appeal by Mr. Rudd, an economic study was released yesterday by the Minerals Council of Australia, hinting that the proposed tax would repel new projects in nickel, gold, and copper mining, and shred off 57 per cent off the value of new black coal mines and 47 per cent of iron ore projects.

MCA also predicts that the tax may produce a significant loss of value in investments, turning Australian projects from short to medium terms.

Mr. Rudd stood firm, stating that mining companies can pay more tax and the government will not tolerate any propaganda released by the MCA, however, he will personally discuss the tax to individual mining leaders.

"We believe this 40 per cent rate is right and we've said we will consult with the industry on detail and on implementation and on transition," Mr Rudd said yesterday.

"That's the framework in which we're having these consultations and negotiations, but what I do know about consultations with very big - very big - mining companies who sometimes hunt in packs is that it's far better that these negotiations are conducted direct rather than through the media."

Mr. Rudd said negotiations with the mining leaders may be lengthy and will refuse any timetable because of the upcoming October elections.

He reiterated that the 40 per cent tax rate on profits for mining companies is important and will be fairly distributed within the country.

Resource Minister Martin Ferguson agrees with the Prime Minister that all sectors will have a fair return to the Australian community.

"What we're about is bedding down the detail and putting in place certainty, which ensures that we get a fair return for the Australian community for their resources during the good times but I also remind you that during the bad times there is also some relief for the mining industry."

Meanwhile, Opposition Leader Toy Abbot argues that Mr. Rudd's tax will have a grave impact on all Australians.

"Everything that comes out of the ground is subject to Mr Rudd's great big new tax. That means your sand, your gravel, it means everything that goes into the steel, the concrete, the roof tiles, all of this is going to be subject to Mr Rudd's great big new tax and this is a tax on everyone."