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bl<>Caterpillar ‘Concerned’ About Australian Mining Tax (Update1)


June 14 (Bloomberg) -- Caterpillar Inc., the world’s largest maker of construction equipment, said Australia’s proposed 40 percent tax on mining profits may hurt the company’s sales in the country.

“Along with our dealers and customers in the region, we are concerned about the potential impact the proposed change in tax policy will have on the manufacturing of mining equipment and our sales in Australia,” Caterpillar spokeswoman Kate Kenny said in an e-mailed response to questions from Bloomberg News.

BHP Billiton Ltd., the world’s largest mining company, Xstrata Plc, Rio Tinto Group and Peabody Energy Corp. have said they are reviewing, suspending or slowing Australian projects as a result of the so-called super-profit tax on mining companies. The country is the biggest exporter of iron ore and coal.

Caterpillar hasn’t had any order cancellations or delays, Kenny said. The Peoria, Illinois-based manufacturer “opposes any significant tax increases that will impact the viability of future mining investment in Australia and threatens the company’s long-term competitiveness,” she said.

Xstrata earlier this month said it shelved spending on projects valued at A$6.6 billion ($5.6 billion) in Australia.

The proposed levy would be imposed on resource companies’ returns that exceed the rate on long-term Australian government bonds, now about 6 percent, and be offset by a credit for royalties paid to states, according to government documents.

Prime Minister Kevin Rudd, under pressure to water down the plan, may raise the tax threshold to more than 10 percent from 6 percent, the Herald Sun newspaper reported June 11.

Earnings Forecast

Caterpillar raised its 2010 earnings forecast in April on growth in emerging countries, energy markets and strong order rates for mining. The company said it planned to increase production capacity for large mining trucks because some models were sold out for 2010 and some customers said they were accelerating expansion plans and new mine development.

Caterpillar rose 77 cents, or 1.3 percent, to $61 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have gained 7 percent this year.