Christian Georges, Metals and Mining strategist of Olivetree Securities  says “The ‘Henry tax’ appears well supported by the Australian population, who are demanding that the country keeps a larger share of the value of its minerals reserves. Frankly, this is understandable. But earnings for companies such as BHP and Rio Tinto could be hit by 15% and 20% respectively from 2012 onwards, whereas companies such as Xstrata and Anglo are likely to be impacted less.

“We disagree with the warnings from various companies that future investments in the country will be affected negatively by the new Super Profits tax. We think this is unlikely, given that Australian mineral reserves are amongst the cheapest to develop. However, the tax may limit the potential value of a merger or an acquisition of Australian mining assets.

“This tax in Australia should be put in the context of a similar kind of growing pressure in South-Africa; as for Brazil, the likes of Vale are not immune to Government pressure demanding profit re-investment into potential value-destroying greenfield steel assets (hence the deals with Norsk Hydro and Beny Steinmetz).”