New Hope Says Shareholders Should Consider Mining Tax When Voting In Election

Shareholders in New Hope Corp. (NHC.AU) should consider the impact of the Australian government's proposed mining tax when voting in the federal election on Saturday, the company said Tuesday.

Long-term shareholder returns will reduce by more than 10% as a result of the new tax, the company said in a letter to shareholders.

"I ask that you consider the potential impact of the current government's proposed mineral resource rent tax when casting your vote in the forthcoming federal election," Chairman Robert Millner said.

New Hope, which operates mainly thermal coal mines in the southeast of Queensland state, is Australia's fifth largest independent coal miner by production.

The government's proposed mining tax, which will levy 22.5% on all coal and iron ore profits more than 7% above long-term commercial lending rates, has attracted angry opposition from many smaller miners.

Australia's big three listed mining companies, BHP Billiton Ltd. (BHP.AU), Rio Tinto Ltd. (RIO.AU) and Xstrata PLC (XTA.LN), have accepted the deal, which they thrashed out with the new government of Labor Prime Minister Julia Gillard after her predecessor Kevin Rudd was removed by his own party.

Opposition leader Tony Abbott has proposed to drop the tax and provide A$418 million of exploration rebates for smaller miners if he wins the election.

In a separate letter to shareholders released late Monday in his capacity as chairman of investment company Washington H. Soul Pattinson & Co. Ltd. (SOL.AU), Millner also said that the tax could impact future earnings of that company.

Washington H. Soul Pattinson owns 60% of New Hope's equity.

-By David Fickling, Dow Jones Newswires; [phone]; [e-mail]