Large mining companies enjoyed a huge profit margin of 46.1% in 2008/9, according to figures released by the Australian Bureau of Statistics (ABS) on May 28. The mining sector as a whole has a profit margin of 37.1%, making it the most profitable sector in the economy, with professional and scientific services second (24.6%) and private health care third (21.5%).
While only 52% of all mining companies in Australia made a profit in 2008/9, those that did are doing very well. But this hasn’t stopped them waging a noisy fear campaign against the Rudd Labor government's proposal to bring in a 40% tax on mining company super profits. The proposed Resource Super Profits Tax (RSPT) will actually offer new subsidies to mining companies not making a profit.
The figures in the Industry Australia report were analysed on Pollytics.com on June 16. It fount that in 2008/09, before interest, tax, depreciation and amortisation/revenue, the Australian mining industry had a earnings ratio of 43%, more than the world’s largest 40 mining companies, which had a comparable estimate of 30%.
Pollytics.com's conclusion was that the big mining companies were bluffing in their threats to leave Australia if the RSPT was brought in.
Graph from Pollytics.com