A new bill proposed in Australia, calling to increase levies placed of on mining companies revenues, is threatening to cut tens of billions of dollars off future profits, Mining Weekly reported.



Iron ore giants such as BHP Billiton and Rio Tinto stand to face the greatest losses, given their enormous profits. Market analysts predict that iron ore prices are expected to rise by about a third in 2010.



The so-called rent tax would cost BHP Billiton, the world's biggest diamond mining corporation, an average of $2.33-billion in annual profit between 2012 and 2016, according to Bank of America Merrill Lynch. Rio Tinto could lose upwards of $2.7-billion a year.



According to the report, the bill recommends annulling individual Australian state taxes on mining projects, in favor of a 40% uniform national resource tax.



Mining industry groups oppose the change, claiming it would turn away investment and reduce productivity for a sector generating more than 8% of the annual gross domestic product.



"The global financial turmoil in recent times, combined with increased competition from other parts of the world means the industry can ill afford any more pressure on investor confidence," Association of Mining and Exploration Companies' (AMEC) Chief Executive Simon Bennison told Mining Weekly.



"The worry is that the minerals industry is seen to make very good profits at certain parts of the cycle and are an easy target, but as we've seen over the last 12 months it doesn't take much to dump you down into pretty dire conditions in terms of cash flow and profitability," said Minmetals Australia CEO Andrew Michelmore.