Chinese mining company Yancoal has announced that if it succeeds in acquiring Coal & Allied assets it will not pay corporate income tax on them for years.
Yancoal, whose parent company is owned by the Chinese state, is currently bidding for Coal & Allied assets in the Hunter Valley, as well as a significant stake in Newcastle Port.
The assets are estimated to have paid out $100 million a year in corporate income tax to the Government, but Yancoal can offset this against the $1.7 billion of losses it has racked up over the last four years.
The company books now show it is carrying deferred tax assets of $1.34 billion and $762.2m in deferred tax liabilities.
This revelation might make the government think twice about supporting a deal which will hit the public purse.
Coming against a backdrop of growing public concern about Chinese control of Australian national assets, the bid is already contentious. The news that it would strip $100 million a year out of the public finances, is sure to add fuel to the fire.