After rounds of squabbling, on Friday, the Australian government rolled out the framework for a new mining tax.

The basics of the tax are less onerous than the original proposal made in May. Key among the changes is a reduction to 30% from the original 40% rate. Also, rather than affecting all commodities as was first proposed, the 30% tax is limited to coal and iron ore, while a 40% tax is carried over for onshore oil and gas projects. Therefore, the tax would hit far fewer companies.

The apparent settlement comes just a week after new Prime Minister Julia Gillard replaced Kevin Rudd in the nation's key position. Rudd's ouster occurred at least in part because of his maladroit handling of the mining issues. Gillard's obvious success in handling them may well assist her in calling an election before the April 2011 scheduled date. The new tax wouldn't be implemented until July 2012.

However, lest we assume that it has been carved in stone, the country's opposition Liberal-National group of parties has repeated its earlier vow that, if elected, they would toss the tax. A representative of the coalition party has called the new tax "a bad tax for investment, it is a bad tax for jobs and it is ultimately a bad tax for Australia."

Under the new proposal, companies -- such as huge iron-ore producers BHP Billiton (NYSE: BHP) and Rio Tinto (NYSE: RTP) -- gained valuable concessions. They now will be allowed to base their compliance with the new tax system on their choice of using market value, instead of book value, of their assets. Also, miners will be allowed to move losses between projects. The two big Australian companies join Brazil's Vale (NYSE: VALE) in producing the lion's share of the world's iron ore.

The CEOs of both BHP Billiton and Rio Tinto both expressed general satisfaction at the latest proposal. That sentiment is particularly important for Rio Tinto, given a balance sheet that still includes high debt remaining from its takeover of Canada's Alcan a few years ago. It'll also be interesting to see how the tax is met by major pan-Asian iron ore customers like POSCO (NYSE: PKX), along with the likes of giant steelmaker ArcelorMittal (NYSE: MT)

My feeling, as I watch the machinations in Australia, continues to be what it was before Friday's announcement: I continue to believe that Fools should especially watch BHP Billiton, which to my way of thinking, is one of the world's stronger companies.