How they killed the mining tax

On 2 May 2010, Prime Minister Kevin Rudd and Treasurer Wayne Swan announced the Resources Super Profits Tax. It was a 40 per cent tax on the ‘super-profits’ generated by extracting Australia’s non-renewable resources: profits above a normal rate of return on investment. It was based on the Henry Tax Review, a comprehensive root-and-branch examination of the Australian tax system commissioned by the government. It was designed to ensure that Australians received a fair share of the extraordinary wealth generated by the mining boom.

On 24 June 2010, 53 days later, Kevin Rudd was removed as Prime Minister.

In that 53-day period, the Australian mining industry spent approximately A$22 million on advertising. Andrew Forrest of Fortescue Metals, Gina Rinehart, and Clive Palmer appeared on national television and at public rallies warning of economic catastrophe. Mining companies announced investment suspensions amounting to hundreds of millions of dollars. Xstrata, a Swiss mining giant then controlled by Ivan Glasenberg, announced it was suspending A$586 million in Queensland projects.

What Australians did not know at the time (and what Xstrata’s executives, their strategic advisers, and their PR networks took great care to conceal) was what the strategists actually thought privately about the tax they were fighting.

In January 2026, they found out.

01The Epstein files: what the strategists said in private

The US Department of Justice released over three million pages of previously sealed documents relating to the late financier and convicted sex offender Jeffrey Epstein in January 2026. Among the documents were emails between Epstein and Peter Mandelson, a senior figure in British Labour politics who served in Tony Blair’s governments, then in Gordon Brown’s as Business Secretary and First Secretary of State.

Mandelson had been advising the Australian mining industry on how to defeat the Resources Super Profits Tax. He forwarded his strategy communications to Epstein.

The emails reveal what the industry’s own strategists said when they thought no one was watching.

The Mandelson strategy memo. An email from Mandelson to a redacted recipient (forwarded to Epstein) dated June 2010, discussed the strategic approach to defeating the RSPT. Its central arguments:

The industry needed to ‘build the broadest possible coalition’: pulling in community members, contractors, suppliers, and anyone economically connected to mining, so that mining executives could ‘step back from the headlines’ while the pressure maintained.

The campaign strategy should take care not to let the issue become one of ‘who governs Australia: the voters and their elected representatives or the mining companies.’ Mandelson’s advice: keep the corporate hand hidden.

Mandelson’s advice to the industry: “start to accept that there is no ideological reason why the industry should not be making a greater contribution to society”. Fight it, he wrote, on “fairness” and “reciprocity”.

As reported, the emails show Mandelson advising on strategy against a 40 per cent resource tax on Australian mining profits, not running the campaign. In that advice, forwarded to a convicted sex offender, he wrote: “I would suggest that you start to accept that there is no ideological reason why the industry should not be making a greater contribution to society, especially given the constrained economic times”, and argued the campaign should rest on “fairness” and “reciprocity” (what the government would offer the industry in return for a higher tax bill). ²

The campaign was not an honest policy debate. It was a coordinated exercise in protecting corporate profits from a democratically elected government, on this outlet’s reading, with advice that privately accepted the industry had no ideological ground to refuse a greater contribution.

Correction, 7 October 2026. The subtitle and this section called Mandelson the man "coordinating" the campaign and said he "acknowledged" or "conceded" there was no principled case against the tax. The reporting on the Epstein files does not call him the coordinator: it shows him advising on strategy and sharing campaign emails with Epstein. ¹⁶ His words, as reported, were advice to the industry to "start to accept that there is no ideological reason why the industry should not be making a greater contribution to society", while fighting on "fairness" and "reciprocity". ² The subtitle, pullquote and paragraphs now quote him exactly and describe his role as reported; reference 2's summary was corrected to match, and the summaries of references 5 and 6 no longer describe the emails as "strategy coordination" or the suspension as planned "to generate headlines". The first paragraph also had Mandelson's career in the wrong order: he served in Tony Blair's governments first, then in Gordon Brown's as Business Secretary and First Secretary of State.

02The Xstrata investment suspension: manufactured outrage

The most powerful moment in the public campaign was the Xstrata investment announcement. In the first week of June 2010 (the trade press reported it on 4 June), Xstrata CEO Mick Davis announced the company was suspending A$586 million in expenditure on two Queensland mining projects: the Ernest Henry mine and the Wandoan coal project. ^{17 18} The announcement generated extensive media coverage. Political and business commentators declared it the ‘most definitive evidence of the RSPT’s impact’. Media coverage turned. The narrative crystallised: the mining tax was killing investment and jobs.

The Epstein files show Mandelson was kept informed. A June 8, 2010 email from Mandelson, shared with Epstein, enclosed an email from Davis dated the previous day discussing the campaign and Xstrata's suspension of spending at the two Queensland sites, and Mandelson advised building "the broadest possible coalition" against the tax. ^{16 2 5} On this outlet's reading, the emails show the suspension being handled as part of the campaign rather than as a spontaneous corporate response. As reported, they do not show who decided the suspension or when.

The ANZSOG case study of the RSPT campaign, published in 2013, documented the strategy explicitly: the goal was to ‘encourage community members, contractors, suppliers and all those who could be affected by the RSPT to speak up in public, allowing Xstrata executives to step back from the headlines.’ The investment suspension was the centrepiece of that strategy.

Correction, 7 October 2026. This section said, as fact, that the Xstrata suspension "was coordinated campaign strategy, not spontaneous corporate response", and the fact box and key facts called it "coordinated". The reporting on the Epstein files shows a June 8, 2010 email from Mandelson enclosing Davis's email about the campaign and the suspension. ¹⁶ The section now says what the emails show and gives the coordination claim as this outlet's reading. It also dated the announcement "on or around 8 June 2010"; Xstrata announced the A$586 million suspension in the first week of June and the trade press reported it on 4 June 2010, before the 7 June Davis email and 8 June Mandelson email. ^{17 18} The Wandoan project's name is now spelt correctly.

03The 53-day timeline

The following is a factual account of what happened between May 2 and September 5, 2010 and its aftermath. Sources cited throughout.

04What was lost: A$33 billion and counting

The Resources Super Profits Tax was never implemented. Its watered-down replacement, the Minerals Resource Rent Tax, was expected to raise A$22.5 billion over four years. It raised less than A$200 million in its final year. It was repealed in September 2014.

In 2021, the Parliamentary Budget Office conducted an analysis commissioned by the Australian Greens of what Rudd’s original RSPT would have raised. Its finding: A$33 billion increase in the fiscal balance, and A$34.6 billion improvement in the underlying cash balance, over the eight years from July 2012 to 2020.

If those revenues had been channelled into a sovereign wealth fund, as Article 3 of this series documented that Norway did with equivalent resource revenues, the compounding effect over subsequent years would have been larger still. Australia’s Future Fund was worth A$226 billion in 2025. Norway’s oil fund, built from thirty years of resource taxation starting in 1996, was worth US$1.9 trillion.

The 53-day campaign cost Australians a future that no one can fully price.

Update, 7 October 2026. Reference 9 pointed to the Australian Greens homepage. It now points to the Parliamentary Budget Office costing itself, "Lost revenue from the original mining tax" (released 30 March 2021), which gives the A$33.0 billion fiscal balance and A$34.6 billion underlying cash balance figures. ⁹

05The Gillard deal: negotiated with three companies, handed to the industry

When Julia Gillard replaced Rudd on June 24, 2010, she immediately made dealing with the mining industry her first priority. Within days, negotiations began.

There is one fact about those negotiations that is rarely appreciated in full: Gillard consulted only with the three largest mining companies: BHP Billiton, Rio Tinto, and Xstrata. Smaller companies were excluded. The government negotiated the terms of a national tax policy with the three companies whose campaigns had most recently helped remove its predecessor.

The result was the Minerals Resource Rent Tax, a tax so much weaker than the RSPT that it became a source of ongoing embarrassment for the government that passed it. It applied to fewer minerals (iron ore and coal only, not the full suite), at a lower effective rate, with royalty offsets that allowed state government royalties to reduce the tax liability. It collected almost nothing.

The industry had not just defeated the tax. It had negotiated the replacement. The three companies whose money had funded much of the campaign, ¹⁴ one of which had announced the investment suspension that generated the turning-point headlines, one of whose chief executives was sharing campaign emails with a British adviser who wrote that there was “no ideological reason” for the industry not to contribute more: those three companies sat across the table from the new Prime Minister and determined what the replacement would look like.

Correction, 7 October 2026. This section said the three companies' "strategists had privately advised that there was no principled case against the original proposal". The reporting does not support that wording; it now says what the emails show. ^{2 16} It also said the three companies' "executives had coordinated the campaign"; it now says their money funded much of it ¹⁴, and that one of them, Xstrata, announced the suspension.

06The template: how the campaign became routine

The most significant long-term consequence of the 2010 campaign was not the defeat of the RSPT. It was what the campaign demonstrated about the limits of Australian democracy when it comes to resource taxation.

The template established in 2010 is now applied systematically:

A$22 million in advertising over six weeks was enough to destabilise a government.

Manufactured investment suspensions, presented as independent corporate decisions, generated the media turning point.

Hiding the corporate hand (routing the campaign through community members and contractors) made it appear to be a grassroots uprising rather than an industry operation.

The government’s negotiating partner was simultaneously the government’s most powerful public opponent.

This template has since been deployed against every serious resource rent reform attempt. When the Albanese government proposed PRRT changes in 2024, the gas industry publicly supported the changes, a different version of the same technique: instead of fighting reforms, endorse reforms weak enough not to matter. As documented in Article 2, those reforms will raise A$4 billion less than promised. The industry endorsed them.

Correction, 8 October 2026. The quotation above began "The campaign was such a success", left out the authors’ quotation marks around "mining tax style campaign", and was attributed to a University of Melbourne publication of 2022 and referenced to a Centre for Public Integrity page that does not carry it. It is from Joo-Cheong Tham and Yee-Fui Ng, writing in The Conversation on 19 August 2022, who put it in their own words after describing the A$22 million advertising campaign. The quotation now matches their text, and reference 13 cites that article. The notes on references 2 and 13 also called both authors University of Melbourne academics; Tham is at the University of Melbourne and Ng is at Monash University, and both notes now say so. ¹³

07The economics: why the tax was right

Mandelson’s advice, that the industry should accept there was “no ideological reason” why it should not make “a greater contribution to society”, is not just a revelation about the 2010 campaign. On this outlet’s reading, it fits the economics. ²

Resource rent taxes are among the most economically efficient taxes available. A 2025 working paper by ANU Tax and Transfer Policy Institute academic Chris Murphy found that the Petroleum Resource Rent Tax has a negative marginal excess burden of eight per cent. That means increasing the PRRT by one dollar generates eight cents in additional economic benefit. By contrast, increasing the top personal income tax rate by one dollar causes 76 cents in economic damage.

Taxing resource rents does not deter investment in the way that taxing wages or corporate profits does. The resource is in the ground. It belongs to the public. Whether you tax the profit from extracting it at 30 per cent or 78 per cent, as Norway does, the extraction happens, because the profit remains. This is why Norway’s 78 per cent petroleum tax has attracted investment for decades despite commentators saying it was ‘impossible.’

The economic case for the RSPT was sound. Mandelson’s private advice did not dispute it. The campaign against it succeeded not because it was wrong, but because its opponents had the money and the media access to make Australians fear it was.

Correction, 7 October 2026. This section called Mandelson's words an "admission" and a "statement of economic fact" that "confirmed" the case for the tax. His words were advice to the industry to accept there was "no ideological reason" not to contribute more. ² The section now quotes that and gives the economic reading as this outlet's.

08What happened to Mandelson: the 2026 aftermath

The Epstein files were released in January 2026. The Mandelson mining tax emails surfaced among them. In the UK, the fallout was significant.

Mandelson was serving as UK Ambassador to the United States, appointed by Prime Minister Keir Starmer, when the documents became public. Starmer fired him. Mandelson resigned from the Labour Party. He was stripped of his Lord title.

On February 23, 2026 (three weeks before this article was published) Peter Mandelson was arrested by British police on suspicion of misconduct in public office. He was released on bail. The criminal investigation is ongoing.

The Australian dimension of Mandelson’s activities (his private advice on the campaign against the RSPT, his written view that there was “no ideological reason” the industry should not contribute more, the forwarding of mining industry strategy documents to a convicted sex offender) has received considerably less attention in Australia than in the UK. It is documented. It is public. It belongs in the record of how Australia’s mining and gas rort was maintained.

The Epstein files placed in the historical record what the 2010 campaign participants said privately. Mandelson advised the industry to “start to accept that there is no ideological reason why the industry should not be making a greater contribution to society”. ² The emails show the investment suspension being discussed as part of the campaign, which this outlet reads as strategy rather than spontaneous response. ¹⁶ The campaign was designed to hide the corporate hand. Some of it was forwarded to a convicted sex offender. The tax that could have raised A$33 billion for Australians was killed anyway.

Correction, 7 October 2026. This section said "The investment suspensions were coordinated strategy" as fact. It now says what the emails show and gives the strategy reading as this outlet's. ¹⁶ It also described Mandelson's "coordination of the campaign", said he "admitted no principled case against the tax existed", and said the campaign was "coordinated partly through the email account of a convicted sex offender". The reporting shows him advising on the campaign and forwarding emails to Epstein; his words are now quoted as reported. ^{2 16}

09The rort

The Resources Super Profits Tax was sound economics. It was fair policy. It was strategically killed by a A$22 million campaign run by the world’s largest mining companies, with private strategy advice from a British political figure who wrote that there was “no ideological reason” the industry should not contribute more, and who forwarded campaign emails to a convicted sex offender. ^{2 16}

The Prime Minister who proposed it was removed in 53 days. His replacement negotiated its terms with the three largest mining companies. The replacement tax raised almost nothing. It was repealed. The resource boom continued. The profits flowed offshore. The public got nothing.

The A$22 million investment produced returns that no legitimate business investment could match. For every dollar spent on the campaign, the mining industry preserved many dollars in untaxed profits over the subsequent decade.

That investment established the precedent that Australian governments cannot successfully implement resource rent reform without facing an existential political campaign.

That precedent governs the PRRT today. It governs every conversation about gas tax reform. It is why Senator Pocock can ask a Treasury official about beer and gas and get 8.7 million views (as reported in February 2026), and yet the PRRT continues to collect less than the beer excise.

Article 7 of this series asks why nothing has changed in the fourteen years since Rudd’s removal. The answer draws on everything this series has documented: the donations, the revolving door, and the template established in 2010 and deployed ever since.

If it’s a rort, we cover it.

Correction, 7 October 2026. This section said the campaign was "coordinated partly by a British political operative who privately admitted there was no principled argument against it". The reporting shows Mandelson advising on the campaign, not coordinating it, and his words were advice that there was "no ideological reason" for the industry not to contribute more. ^{2 16} The sentence now says that. The heading of the previous section, which called Mandelson "the strategist", now names him.