Gina Rinehart's chief lieutenant on the giant Roy Hill iron ore project has warned the Federal Government against axing or reducing the diesel fuel rebate for mining companies, saying it would "reverberate" around global financial institutions that had backed its multibillion-dollar funding package.
Roy Hill chief executive Barry Fitzgerald, speaking at a Committee for the Economic Development of Australia business lunch yesterday, said talk of a Treasury push to withdraw the $5.5 billion fuel tax credit scheme had come in the aftermath of Roy Hill's $US7.2 billion debt deal.
Suggestions that Federal Treasurer Joe Hockey could target the fuel credit to help balance the Budget had sparked talk of a backlash from the mining and agricultural industries, which are its major beneficiaries.
Federal Greens MPs and senators have supported calls to cut the rebate, saying it is a subsidy to the mining industry.
Mr Fitzgerald said the Government should consider the long- term impact of sudden changes to the tax system and should not choose "easy targets" in its search for extra revenue.
"We've just finished dealing with 19 international commercial banks and five export credit agencies and we put to them the value proposition from our bankable feasibility study," Mr Fitzgerald said.
"That was based on having the diesel fuel rebate in place so the speculation that the rebate might be reduced or removed is obviously going to reverberate around some fairly influential and significant institutions."
Mr Fitzgerald said Roy Hill had mined its first export-quality ore from the mine this week and was building its first stockpiles at the 55 million tonne-a-year port, rail and mine project. He said the first rail tracks were expected to be placed this month.