Mining Deals Plunge in Australia After Rudd Tax Plan

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Mining takeovers in Australia, the biggest shipper of iron ore and coal, are set to hit a five-year low this quarter after the government proposed a mining “super profit” tax. There have been 47 announced deals valued at $914 million this quarter, compared with 89 deals worth $9.11 billion in the three months ended June 30 a year ago, according to data compiled by Bloomberg.

That’s on track for the smallest number of deals since the first quarter of 2006 and the lowest value since the fourth quarter 2005. “We are certainly seeing a pullback in mining transactions,” said Tim Goldsmith, global mining leader for PricewaterhouseCoopers LLP based in Melbourne. “What the announcement of the super tax has done is provide uncertainty and while companies are uncertain they tend not to transact.” The slowdown in takeovers confirms predictions by Citigroup Inc. and Xstrata Plc, which joined with BHP Billiton Ltd. and Rio Tinto Group to campaign against the 40 percent tax on mine profits...