Placer benefits as Australia drops tax plan

The Australian government has decided not to proceed with proposals to tax the profits of the country’s gold mines or levy a compensatory tax on dividends distributed by Australian companies. The government apparently bowed to strong political pressure from gold-producing regions which would have been most affected by the restrictive legislation.

This is good news for Placer Development. Its Kidston operation in Queensland is Australia’s largest gold producer and consequently a major profit centre for the company. However, Placer says a 15% holding tax on dividends paid by Placer Pacific to non-residents such as Placer Development will remain.

In the nine months ended Sept 30, Kidston sold 178,000 oz gold for a new profit of $44 million(A). Kidston is 70% owned by Placer Pacific which, in turn, is held 78.6% by Placer Development.