OneSteel says RSPT places businesses under threat
OneSteel Limited (OST) said the Federal government’s proposed Resource Super Profits Tax has placed its Whyalla steelworks business at a significant disadvantage against its import competition and as a result threatens the viability and longevity of its steel businesses. In a letter to shareholders released last night, chairman Peter Smedley said that unless the Government makes substantial changes to the tax there is likely to be serious implications for its shareholders, employees and the local communities in which it operates.
”Our shareholders, the majority of whom are Australian, could suffer a significant reduction in after tax returns, as well as in the value of their investment due to the negative impact of the tax on the Company’s share price,” Mr Smedley said.
”The impact for our employees would not be limited to the Whyalla businesses, but also have the potential to affect our Newcastle steel businesses which are supplied with steel billet produced at the Whyalla steelworks.”
OneSteel’s Whyalla and Newcastle businesses employ about 4,000 employees and contractors in total.
Mr Smedley said any tax change proposed by the Government should only apply to new investments, not retrospectively to existing investments.
“Our $400+ million investment in Project Magnet to convert the Whyalla steelworks to magnetite iron ore and allow the commercialisation of our hematite iron ore reserves was based on an assessment of risk and reward at the time, including the tax system in place in Australia,” he said.
“To apply such a substantial change to the tax rules retrospectively is unfair to OneSteel and its shareholders and seriously damages Australia’s attractiveness as an investment destination.”
As at 1139 AEST, OneSteel shares were up 5c to $3.06.
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