According to The Australian Financial Review, the record iron ore production the global Australian delivered in the March quarter is great news for the country.
While much of the nation’s focus has rightly been on the hundreds of billions of dollars the government has been spending to nurse the economy through this crisis, less thought has been given to the billions of dollars in tax revenue it won’t receive as company profits turn to losses.
Thank goodness then that BHP, like its fellow iron ore majors Rio Tinto and Fortescue, are keeping their foot on the accelerator – and the tax dollars flowing.
And if the encouraging trends BHP is seeing in China continue, one of our biggest and most important corporate taxpayers might even be able to shoulder a heavier load for the nation.
One of the surprising features of the COVID-19 crisis is the resilience of iron ore, which has stayed above $US80 a tonne throughout. To put this in perspective, BHP’s full-year cost guidance for iron ore is for unit costs of $US13 to $US14 a tonne – that’s a hell of a margin in anyone’s language.
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