The SMH Online seems to be alluding to the prospects for a backdown by Kevin Rudd on the mining tax. It is safe to say that Rudd will be sparing the precious & base metals industry. I suspect that the govt will instead target the bulk materials industries like coal, iron ore, though its fair to say he will be given a token if they are to stay happy, because those industries are the ones with all the money. The smaller metals are the one's who would be severely impacted by the tax from an operational perspective. Any news ought to have a neutralising impact on the governments prior stupidity.
The implication is that it is a really good time to re-enter mining stocks, with the expectation that Rudd will be backing out of this tax proposal with his tail between his legs. A1 Minerals I think represents good buying on that basis, as it has the most to gain from this tax. I think it has curtailed plans for an expansion of gold production after the tax was announced. It is a high grade producer, and it has broken out, and fallen back to support, i.e. previous resistance, so we can expect a move by it when Rudd announces the backdown. A1 Minerals is WA based.
Other Australian miners and project developers will of course benefit. i.e. coal seam gas producers or developers in particular. Its possible iron ore miners will concede a minor tax increase. Anyway, I do not think this tax will be going ahead as the Liberals will reject it.
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Andrew Sheldon www.sheldonthinks.com
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