As Americans begin to concern themselves with potentially higher tax levies, we suddenly discover that we're not living in a world of our own. It now appears that Australia's Prime Minister Kevin Rudd, who is in a contest for re-election, would love to slap a 40% tax, the Resource Super Profit Tax (RSPT), on his nation's big and powerful mining companies.
But members of the industry -- headlined by the two behemoths, BHP Billiton
However, BHP CEO Marius Kloppers has noted that the proposed tax would increase the mining industry's local tax rate from its current 43% to near 57%. At the same time, the higher tax would call into question major projects that have been approved under a completely different set of financial assumptions. That, from my perspective, carries with it implications that are more than a little daunting.
Similarly, acquisitions in the industry that are currently in the works, such as U.S. coal producer Peabody Energy's
During the past couple of years, the three big iron ore producers -- including Brazil's Vale
I recognize that many of my Foolish friends might be inclined to jettison their BHP or Rio shares. But I wouldn't act too hastily. These are solid companies, and there's a good chance that China alone will keep us in a secular bull market for commodities for a long time to come.