Cape Lambert Resources said that it has cancelled all planned exploration activities at its Pilbara project in Western Australia over the proposed super tax on the mining industry. The company said that it took this step as a result of the uncertainty the Henry tax review was creating.

The federal government announced on Sunday that it is effectively proposing a 40% tax on the super profits. The industry analysts had also warned earlier that the proposed super tax could hinder mergers and acquisitions activity in the sector and drive investment offshore. Super profits refer to the operating profit a company generates after it has recouped the capital cost of developing the project.

Cape Lambert also said that it is now planning to shift its exploration activities to its projects outside of Australia. "While the company has ceased all activities in Australia it believes it is well placed to benefit from the increased interest in resources companies with a number of advanced projects outside of Australia," said a spokesperson of Cape Lambert. Clive Palmer, another mining company in Australia, also announced yesterday that it has dropped the idea of three projects, one project in Western Australia and two in South Australia, due to the super profit tax.