Fortescue loses fight against mining tax in the High Court

SOME will fight laws because they are passionate or believe there is a wrong worth putting right.

But when Fortescue Metals billionaire chairman Andrew "Twiggy" Forrest fought a mining tax in the High Court, a Queensland academic described it as "street theatre done indoors".

Queensland University of Technology law lecturer John Pyke said it was a political statement from Fortescue and little more.

The High Court unanimously dismissed Fortescue's claim that the Minerals Resource Rent Tax was unconstitutional because it discriminated between states.

When the fight began in July last year, Mr Pyke told APN the case had a "snowball's chance in hell" of succeeding.

On Wednesday, he said the Queensland and Western Australian governments had their own political points to make.

"Sometimes people bring legal challenges to fight for something, sometimes it's a bit of street theatre to show they're annoyed," Mr Pyke said.

With the High Court striking down a challenge to the Commonwealth's mining tax, Western Australia Premier Colin Barnett admitted he knew it would fail.

It was insight that clearly had little sway over resources powerhouse Fortescue Metals Group which launched the fight or the Queensland Government which spent hundreds of thousands of dollars to support it.

Key claims from Fortescue's legal team were "unanimously dismissed" on Wednesday.

The court ruled the Minerals Resource Rent Tax was constitutional, that it did not discriminate between states or affect their ability to build a mining industry.

Later, Mr Barnett told a radio station the result was "not all that surprising".

"I obviously would have liked to have seen the Mineral Resource Rent Tax thrown out, but I think it was a tax on profit and while I don't support the tax, I think the Commonwealth does have the ability to tax through company tax and tax profit," Mr Barnett said.

Both the Western Australian and Queensland governments backed Fortescue, although Queensland Attorney-General Jarrod Bleijie was far less measured in defeat.

"We intervened in this case, not to support Fortescue Metals, but because we considered that the tax unfairly discriminates between states," he said.

When Mr Bleijie announced the government's intention to join the suit, he said the cost would likely to top $300,000.

He is yet to comment on the actual cost to the state.

In a statement to the ASX, Fortescue Metals Group chief executive Nev Power maintained it was an "unfair, discriminatory and complex tax".

He said he was disappointed with the High Court's decision.

Understandably, the Federal Government was cheerful with the result, with Treasurer Chris Bowen shrugging off long-held criticisms the tax was not raising enough money.

"As a profits-based tax, it responds to changing industry conditions, automatically collecting less revenue when profits are low and more revenue when profits are high," Mr Bowen said.

For the Treasurer, the victory could be short lived - the Opposition plans to scrap the tax if it wins power on September 7.

Topics:  colin barnett fortescue metals high court jarrod bleijie mining tax

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