TAX NEWS - June 2010

Yanzhou Coal Jumps as Australia to Negotiate Mine Tax

June 24, 2010 -- Yanzhou Coal Mining Co., which paid $3 billion for Australia's Felix Resources Ltd. last year, jumped in Hong Kong trading as the new Australian prime minister said she will negotiate over a tax on resources profits.

Yanzhou, China's fourth-biggest coal producer, climbed 2.3 percent to HK$17.58 as of the 12:30 p.m. local trading break. Julia Gillard made the comments after ousting former leader Kevin Rudd, whose proposed 40 percent tax had sparked a public clash with mining groups.

"A deal is probably now more likely, which would result in a less onerous tax regime on the mining sector than the one originally proposed," said Stephen Halmarick, Sydney-based head of investment-markets research at Colonial First State Global Asset Management, which manages about $135 billion.

Citic Pacific Ltd., a Chinese steelmaker that owns an iron ore project in Australia, advanced 2.8 percent to HK$15.60 after Gillard said she was opening the door to talks with miners and pledged to end a government ad campaign in support of the tax.