Coal giant Xstrata PLC has put A$30mil in exploration spending in Queensland on hold as it seeks to clarify what the tax means.  According to Xstrata, the proposed tax has introduced great uncertainty about the potential impact on the economics of developing resources into viable operations in Australia.  It would also change the relative economics of the Australian prospects compared with exploration programmes that Xstrata is pursuing in other parts of the world.
Peabody Energy has cut its offer price for Macarthur Coal from US$3.6 bil to US$3.4 bil.

Over the weekend, BHP chief executive, Marius Kloppers had already warned that it would be difficult to approve billions of dollars worth of projects on its draw board until it had a better handle on this complex tax.   The tax could jeopardize expansion iron ore mining along with a push to more than triple the size of its Olympic Dam copper and uranium mine, which analysts estimated would cost US$20bil.

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