Mineral explorer Minemakers Ltd
(ASX:MAK) has released a feasibility study for its proposed $215 million Wonarah phosphate project in the Northern Territory.
The study found that the federal government’s proposed Resource Super Profits Tax could increase the project’s tax rate by 16%, but there are no plans for it to be shelved at this stage.
Managing director Andrew Drummond says the study shows that if the Wonarah mine’s life was extended to 10 years, as expected, the total tax rate would jump from 36% of the $1.28 billion of earnings received to 52%.
Mr Drummond says the new tax would also potentially hurt capital raising and decrease returns to shareholders.
But the government has yet to confirm whether the tax will apply to phosphate projects.
Mr Drummond says that if the tax does not apply to Wonarah, the $190 million it would save would be reinvested in new projects to build railway lines and fertiliser plants.
For the 12 months to June 30, 2009, Minemakers booked a loss of $14.41 million.
