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BIL
BIBLT
BIL - BHP Billiton Plc - Company announcement
BHP Billiton Plc
Share code: BIL
ISIN: GB0000566504
Company announcement
17 May 2010
Dear Shareholder
This is the first time I am writing to you since I had the privilege of being
appointed Chairman of BHP Billiton in late March. The purpose of this letter is
to bring to your attention a matter of critical importance to our company: the
Australian Government`s proposed super tax on the resources industry.
BHP Billiton Facts
BHP Billiton`s leading position in the global resources industry is well known.
Around the world we have 100,000 employees and contractors, more of whom are
employed in Australia than any other region. Our operations include highly
productive and capital intensive long-life mines, processing plants, ports,
railway lines and oil and gas assets.
Cash generated from this outstanding portfolio allowed us last year to invest a
record US$11 billion in project development, thereby creating jobs, wealth and
opportunity for all Australians. Additionally our 600,000 shareholders, 500,000
of whom are Australian investors, have also benefited from our long term
investments which sustain dividends and create shareholder value.
We continued to invest and pay dividends through one of the most severe global
recessions in history. No one doubts that BHP Billiton and the resources
industry contributed to keeping Australia out of the global recession.
I would like to take this opportunity to thank our employees, their families and
the communities that support them for the enormous contribution they have made
to keep the Australian economy strong.
What we pay in taxes to Australian Governments benefits the whole community
BHP Billiton pays its fair share of taxes. Last year we paid A$6.3 billion to
Australian Governments. We paid A$3 billion in Commonwealth Government company
taxes, A$1.9 billion in State Government royalties and A$1.45 billion in
Commonwealth Government petroleum taxes.
We have no issue with a review and reform of the tax system, but it must be
conducted around sound principles. Any reform proposal must only apply to new
investments: not to existing investments. Additionally any reform should not
disadvantage the resources industry compared to other industries in Australia
and it absolutely must not disadvantage the Australian resources industry
compared to other countries. In other words, any reform must not destroy the
necessary incentives to keep investing in Australia`s growth engine, the
resources industry.
Australian Government`s proposed resources super tax
Historically, the stability and competitiveness of Australia`s tax system has
been central to providing resources companies and investors with the confidence
to invest billions of dollars in long life projects exposed to the risk of
significant commodity price movements.
In a break with this successful tradition, two weeks ago the Commonwealth
Government announced a proposal to opportunistically increase the tax on
resources companies. The Government`s proposal would see the total effective
tax rate on BHP Billiton`s Australian profits increase from 43% to 57% making
the Australian resources industry the highest taxed in the world. This compares
to a tax rate of 23% in Canada and a range of 27%-38% in Brazil. These are two
of the largest resource rich countries that compete with Australia for
investment, customers and jobs.
Australia`s resources industry did not happen by luck. The industry was built
by generations of hard working Australians together with the investments made by
companies and shareholders. The proposed super tax fundamentally, abruptly and
unfairly changes the rules of the game.
Based on these proposed changes your Chief Executive Officer Marius Kloppers has
already said that if the tax goes ahead it would seriously threaten Australia`s
competitiveness, jeopardise future investments and adversely affect the future
wealth and standard of living of all Australians.
In addition, the proposed tax will unfairly impact communities and working
families across regional Australia, the people who provide essential goods and
services to our industry, superannuation funds, individual shareholders and
future generations.
It is not just the resources industry that will be impacted. The risk is that
Australia could now be seen by the rest of the world as a less stable and less
competitive place for long term investments. If this eventuates, the great work
of Australians to build the strong economic foundation of the country over
decades could be undermined, representing a crucial turning point for Australia.
Contributing to the debate
The significance of this proposal to impose such a material new tax on the
Australian resources industry has created substantial public comment by many
corporations, industry bodies and political leaders. We at BHP Billiton will
seek to work constructively in this debate with the aim of ensuring fairness for
all stakeholders and the continuation of Australia`s long term economic
prosperity.
Keeping shareholders informed
We will be assessing our Australian operations and investment plans as details
of the proposed tax become clearer and we will advise you as decisions are made.
We are in the process of planning shareholder information sessions around
Australia so that the management team can update shareholders on BHP Billiton`s
plans and prospects. I invite you to come along and take the opportunity to
meet your management team. Full details of where and when the meetings will be
held will be on our website (www.bhpbilliton.com) shortly.
Yours sincerely
Jac Nasser AO
Chairman
BHP Billiton Limited ABN 49 BHP Billiton Plc Registration
004 028 077 number 3196209
Registered in Australia Registered in England and Wales
Registered Office: 180 Registered Office: Neathouse
Lonsdale Street Melbourne Place London SW1V 1BH United
Victoria 3000 Kingdom
The BHP Billiton Group is headquartered in Australia
Date: 17/05/2010 07:10:10 Produced by the JSE SENS Department.
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