Small miners criticised the Australian government's revised tax plans for the industry Friday, despite a sharp fall in the number of companies likely to be affected by the plans.

A Dow Jones analysis of company results suggests that, of the 2,500-odd miners operating in Australia, few more than a dozen locally-listed companies would face taxes under the new regime, once exemptions for base and precious metals and smaller companies are taken into account.

But smaller companies criticised the process under which the tax was developed, with executives for BHP Billiton Ltd. (BHP.AU), Rio Tinto Ltd. (RIO.AU), and Xstrata Plc (XTA.LN) coming to an agreement with the Australian government in a series of meetings in Canberra this week.

"There are 320 companies affected and only three companies have been in the room negotiating," said Clive Jones, managing director of Cazaly Resources Ltd. (CAZ.AU).

"It's bloody outrageous, particularly given that the larger companies have been saying (the industry has) got to keep a united front," he said.

"We see this as a tax negotiated by the big miners for the big miners," said Garret Dixon, chief executive of Gindalbie Metals Ltd. (GBG.AU).

The mining tax proposals, which apply to iron ore and coal mines, introduce a threshold of A$50 million annual resource profits before miners become liable for the new tax.

Among Australia's listed iron ore and coal miners, only BHP, Rio Tinto, Fortescue Metals Group Ltd. (FMG.AU), Macarthur Coal Ltd. (MCC.AU), Mount Gibson Iron Ltd. (MGX.AU), Centennial Coal Co. Ltd. (CEY.AU), Whitehaven Coal Ltd. (WHC.AU), Grange Resources Ltd. (GRR.AU), New Hope Corp. (NHC.AU), Gloucester Coal Ltd. (GCL.AU), and Rio Tinto-controlled Coal & Allied Industries Ltd. (CNA.AU) have breached that level of operating profits since 2005.

Several offshore miners, such as Xstrata Plc (XTA.LN) and Anglo American Plc (AAL.LN), will also likely be included in regime.

Among other companies listed in Australia, OneSteel Ltd. (OST.AU) also recorded A$161.9 million in operating profits from iron ore mining in 2009, and Wesfarmers Ltd. (WES.AU) made A$915 million in coal mining profits in the same year.

Even so, the threshold is low enough that many iron ore miners at the exploration and development stage would expect to breach it during the life of their projects.

The question of whether the A$50 million level will remain static or rise in line with inflation or some other measure will be decided by a policy transition group being led by former BHP chairman Don Argus and Australia's Resources Minister Martin Ferguson, the government said.

Dixon called for miners of magnetite--a low-grade iron ore which needs more extensive processing before it can be marketed--to be exempted from the regime.

"The big iron ore miners just dig up the product, crush it and sell it, but we start with something that's less valuable than gravel and then have to concentrate it to end up with a high-grade product," said Dixon.

Gindalbie, Grange and OneSteel all mine considerable quantities of magnetite.

   -By David Fickling, Dow Jones Newswires; +61 2 8272 4689; 
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