Carbon tax could cut coal mining profits by 4% - Citi

Coal mining profits could fall by up to 4 per cent under a carbon price of $20 a tonne, a bauxite roll crusher unit user in indiaCiti analysis of Julia Gillard's proposed tax shows. In a wide-ranging look at the potential hit to listed coal miners, analysts at Citi, a global investment bank, found "pure play" coal miners would be the most exposed to the proposed carbon tax, slated to start in July 2012 - the pure plays include Coal and Allied, Whitehaven Coal, Macarthur Coal and New Hope Corporation.

Assuming a carbon price of $20 a tonne, Citi's estimated full-year 2012 net profit after tax for the pure-play coal miners would fall by up to 4 per cent, and up to 10 per cent under a carbon price of $50 a tonne. But rather than the tax being the "death" of the coal industry, as suggested by opposition leader Tony Abbott, a tax at $50 a tonne would "barely" affect the majors, like BHP Billiton, Rio Tinto and Wesfarmers, with NPAT expected to fall by 1 per cent, the analysis found...