Fortescue thanks Abbott for MRRT stance

FORTESCUE Metals Group says it is disappointed to have lost its High Court challenge to what it calls an "unfair discriminatory and complex" Mineral Resources Rent Tax (MMRT).

High Court judges have unanimously dismissed the iron ore miner's challenge to the validity of the MRRT legislation, finding the treatment of state mining royalties under the MRRT Act did not discriminate between states.

Neither did the legislation give preference to one state over another, they ruled.

In the challenge, Fortescue and four subsidiaries argued the MRRT contravened constitutional requirements that taxes be levied uniformly across the nation, in that it differed in each state because of different state royalty rates.

The Fortescue challenge was backed by the big mining states Western Australia and Queensland.

Despite the legal defeat, Fortescue chief executive Nev Power remained defiant in a statement issued to the Australian Securities Exchange (ASX).

"Fortescue challenged the MRRT because it was an unreasonable intrusion into an area of state responsibility and that it was also an unfair, discriminatory and complex tax," he said.

"We're disappointed by today's decision."

Mr Power also thanked Opposition Leader Tony Abbott for promising to abolish the MRRT if the coalition wins the September 7 election.

He said the company's objection to the tad has been bourne out by the low revenue collected to date.

The MRRT, which came into effect in July 2012, imposes a 22.5 per cent tax on profits above $75 million derived from the extraction of iron ore, coal and coal seam gas (CSG).

Miners could offset MRRT liability against expenses, including state royalty payments.

Mr Power said the mining industry already paid more tax than any other sector when taking into account company tax and state royalties.

The company expected to pay $1.5 billion in tax and royalties in the current financial year, he said.

Treasurer Chris Bowen on Wednesday said he didn't plan to change the MRRT if Labor proved victorious at the September federal election, considering the process of implementing it was "torturous".

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