Australian Tax Proposal Scares Away Cape Lambert

4 May 2010 (Last Updated May 4th, 2010 18:30)

Perth-based Cape Lambert Resources said the nation’s proposed 40% resource rent tax rise has led it to cancel a massive iron ore project. The decision comes less than a week after the government announced a 40% tax on profits from local mines. Cape Lambert Resources spokesman

Perth-based Cape Lambert Resources said the nation’s proposed 40% resource rent tax rise has led it to cancel a massive iron ore project.

The decision comes less than a week after the government announced a 40% tax on profits from local mines.

Cape Lambert Resources spokesman David Tasker said the scrapped project in Western Australia’s Pilbara region could have been similar in size to one it sold to China Metallurgical Group for $400m almost two years ago.

Tasker added that Cape Lambert's overseas prospects, including an iron ore project in Sierra Leone in West Africa and a gold project in Greece, are now more attractive investments to the company than its Australian projects.

Cape Lambert is the first company to cancel planned projects and exploration work in Australia following the announcement of the resource rent tax.