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G'day for miners as Australia repeals controversial tax

G'day for miners as Australia repeals controversial tax

Miners drove the FTSE 100 higher after they received a boost from the Australian government’s scrapping of a controversial mining tax.

Australia’s Senate has voted to repeal the 30% tax on mining profits on coal and iron ore, first introduced by the former Labor government in 2012.

It is a victory for conservative prime minister Tony Abbott who made a repeal of the Mineral Resources Rent Tax a central flank of his campaign, but has faced a stand-off with the Senate.

A number of FTSE 100 mining stocks with operations in Australia rose on the news, helping the UK blue-chip index add 20 points, or 0.3%, to trade at 6,846.

  • Anglo American (AAL) traded 32p, or 2.1%, higher at £15.56
  • Glencore (GLEN) rose 6.1p, or 1.7% to 368p
  • BHP Billiton (BLT) was up 27.5p, or 1.4%, at £19.33
  • Rio Tinto (RIO) added 39.5p, or 1.3%, to £32.72

Weir Group (WEIR) jumped 2.8% to £27.13 after analysts at Credit Suisse upgraded the pump and valve maker to ‘outperform’ from ‘neutral’.

‘Mid cap’ stock Redrow (RDW) meanwhile edged up 1.3% to 284.6p after the house builder announced full-year profit had nearly doubled, sparked by the government’s ‘Help to Buy’ scheme, allowing it to double its dividend to 2p per share.

AIM stock Union Jack Oil (UJO) spiked 21.3% to 0.36p after the oil and gas explorer announced encouraging results from the Wressle-1 exploration well in Lincolnshire in which it has a stake.

Jonathan Sudaria, dealer at Capital Spreads, said investors were waiting warily to see the next move for markets, with the possibility of further escalation in the Ukraine crisis threatening big falls, while fresh stimulus from the European Central Bank could spark a renewed rally.

‘When markets are in this awkward period of stasis you just know that something big is about to shove markets one way or the other,’ he said.

‘So if you see Putin going shirtless or Mario Draghi bulk buying paper that could be a good hint to get positioned the right way round.’

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