By RTCC Staff
Australia is the world's largest coal miner. It's output is expected to grow despite the tax. (Source: BHP Biliton)
A controversial tax on mining companies has been passed in Australia ending a two-year long dispute between the industry and government.
The 30% levy is predicted to raise as much as A$10.6 billion in its first three years.
The tax will apply to the profits of coal and iron ore mining firms.
“This is indeed an historic day for economic reform, and an historic day for a fair go in Australia,” said Wayne Swan, the Australian Treasurer.
The tax will be used to fund cuts in corporate taxes in other sectors of the economy.
Australia is the world’s largest coal exporter with China and Japan its two biggest markets.
The country has been praised for developing a domestic carbon price, however, with 300 million tons of coal “leaking” out of the country each year, some environmental campaigners are reluctant to commend Australia’s overall impact on the climate.
Burning coal for power generation emits more CO2 than other forms of fossil fuel leading many governments to slowly phase it out of their long-term plans for power generation.
An announcement in the UK on Saturday regarding the limit on CO2 that power stations can emit, effectively committed the country to cleaner, gas-fired generation from fossil fuels.
Coal is viewed as a major obstacle to lowering worldwide emissions and remaining within a limit of two degrees of warming. Some countries are keen to develop Carbon Capture and Storage (CCS) technologies that would allow them to continue burning low-cost coal without incurring the additional costs related to its higher carbon content.