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Mining town launches tax attack -

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Residents near the coal mine Xstrata will no longer be expanding are joining the fight against
super profits tax.


LEIGH SALES, PRESENTER: Preparations were underway for a presidential visit later this month, but
Barack Obama's again been forced to cancel his trip to Australia and Indonesia. He had to call it
off in March to push through his historic health reform and this time the US president's needed at
home to deal with the oil spill causing havoc in the Gulf of Mexico.

The Australian Government has its own domestic dramas to deal with. Kevin Rudd's publicly trashed
the tactics of one of the country's largest mining companies, Xstrata, after it announced that the
resources super profits tax had forced it to suspend investment and cut jobs.

From Canberra, here's political reporter Emma Griffiths.

EMMA GRIFFITHS, REPORTER: On his old stomping grown in south-east Queensland, the Prime Minister
was on the job.

KEVIN RUDD, PRIME MINISTER: We just worry about when there aren't enough apprenticeships, young
people fall through the cracks.

EMMA GRIFFITHS: Here, it seems, he was amongst friends. But in Mount Isa they want to put him out
of work.

MOUNT ISA RESIDENT: There's only one way to fix it: get rid of Mr Rudd and the Labor Government.

EMMA GRIFFITHS: A town meeting was called to discuss Xstrata's decision to suspend the expansion of
its nearby copper mine.

MOUNT ISA RESIDENT II: Confidence is down already.

MOUNT ISA RESIDENT III: It was like a club over the head, over the head of the mining industry.

EMMA GRIFFITHS: The company says it could still go ahead, but only if the Government backs down.

STEVE DE KRUIJFF, XSTRATA: If we can get through that and get a good tax outcome, there's an
opportunity for that shaft mine to be developed into the future.

EMMA GRIFFITHS: There's no sign of that.

KEVIN RUDD: When you're dealing with some of the very big mining companies around the world like
Xstrata, it doesn't pay to behave like a pussycat.

TONY ABBOTT, OPPOSITION LEADER: He should get off his horse, he should stop accusing mining
companies of being ignorant liars, he should listen to them.

EMMA GRIFFITHS: The criticism is mounting closer to home too. The chairman of the Government's
Future Fund, David Murray, says the tax must be changed or abandoned. And the trucking magnate
Lindsay Fox isn't a fan of the Government's process.

LINDSAY FOX, BUSINESSMAN: You can't just go in for a big bite of money and not have consultation. I
reckon they probably went the wrong way.

EMMA GRIFFITHS: The Labor Premier of Queensland is pleaing for a compromise.

ANNA BLIGH, QLD PREMIER: The Prime Minister and I speak on this issue and others regularly, as I do
with the Federal Treasurer, and I'm gonna keep doing it.

EMMA GRIFFITHS: But the Prime Minister has unleashed a new line of attack, painting Xstrata as a
long-time political foe.

KEVIN RUDD: The company also campaigned vigorously with the Government so that they could keep
WorkChoices and AWAs back in 2007-'08. So I just think we should treat what they say with a bit of
a grain of salt.

EMMA GRIFFITHS: One of Kevin Rudd's political friends now won't be providing any distraction from
the mining debate. The US president has had to cancel his visit to Australia for the second time
this year because of pressing domestic concerns. This time it's the BP oil spill that's keeping
Barack Obama at home.

KEVIN RUDD: He has a big challenge on his hands and it's in the Gulf of Mexico. That's very
difficult. It represents a huge challenge for US administration. He's welcome in Australia any time
he chooses to visit.

EMMA GRIFFITHS: It could be third time lucky.

STEPHEN SMITH, FOREIGN MINISTER: He's indicated that at a convenient time in the future he will
make his visit to Australia and also to Indonesia.

EMMA GRIFFITHS: But the looming mid-term elections in the United States and Kevin Rudd's own
appointment with the ballot box could mean that's later rather than sooner.

Emma Griffiths, Lateline.