Xstrata Copper’s North Queensland Division has suspended its regional exploration program in light of the Australian Government’s proposed 40% resource super profits tax (RSPT). The program for prospective targets in the Mount Isa and Cloncurry districts, in conjunction with junior mining companies, involved planned expenditure of around A$30 million over the next three years.

COO, Xstrata Copper North Queensland, Steve de Kruijff said: “We have decided to suspend exploration activities in north Queensland until there is greater certainty on the fiscal regime for future mining developments. Exploration activities are high risk and, while the targets we had identified are prospective, the proposed tax has introduced great uncertainty about the potential impact on the economics of developing resources into viable operations in Australia. It would also change the relative economics of these prospects compared with exploration programs that Xstrata Copper is pursuing in other parts of the world.

“Exploration is the lifeblood of the mining industry but it is not possible to justify Xstrata Copper’s ongoing funding of additional exploration activities when the fundamental economics of the industry in Australia are being challenged.

“Our copper mining, smelting and refining operations in north Queensland play a vital role as an economic driver in the region, last year contributing more that A$1.3 billion to the Queensland economy and employing over 3,500 people.

“We are very concerned that the proposed tax increases announced by the Federal Government last week will seriously affect the sustainability of our business activities in Queensland and deter the reinvestments that are necessary to sustain our existing operations, develop new projects and ensure the economic wellbeing of the regional areas that we currently help to support.”