Australia has issued a draft mining tax law which is expected to raise A$7.7bn ($8.2bn) in the first two years of implementation.

The tax will be introduced on 1 July next year, if the law makers approve it.

Under the mining tax law, a 30% tax would be levied if the return on investment on a coal or iron project is 7% higher than the long-term government bond rate which is 5%.

Minerals Council of Australia deputy chief executive Brendan Pearson said the legislation would levy lesser tax than originally proposed in 2010 with effective rate not over 45% compared with the initially proposed 58% offering concessions to small mining firms, reports the

The mining legislation excludes small mining companies with assessable annual profits below A$50m and allows mining projects to access write offs on fresh investments.

The original tax proposed announced last year was extensively modified after a series of consultations with BHP Billiton, Rio Tinto and Xstrata.