How they killed the mining tax

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 as UK Business Secretary under Gordon Brown and later as Tony Blair’s closest political strategist.

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.

The man coordinating the strategy to defeat a 40 per cent resource tax on Australian mining profits privately acknowledged to a confidential correspondent — forwarded to a convicted sex offender — that there was no principled reason the industry should not pay more tax.

The campaign was not an honest policy debate. It was a coordinated exercise in protecting corporate profits from a democratically elected government, by strategists who privately conceded the government’s case was correct.

The most powerful moment in the public campaign was the Xstrata investment announcement. On or around 8 June 2010, 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 Wondoan coal project. 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 briefed on this strategy. Davis emailed Mandelson. Mandelson forwarded the documents to Epstein. The suspension was coordinated campaign strategy, not spontaneous corporate response.

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.

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

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.

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.

Rudd’s RSPT: 40% tax on super-profits. Expected to raise A$22.5bn over 4 years. Replaced after industry campaign. Gillard’s MRRT: negotiated with BHP, Rio Tinto, and Xstrata. Raised less than A$200M in final year. Repealed 2014. In total: zero lasting resource rent reform from Australia’s mining boom.The Rort summary, Wikipedia; New Matilda, 2013

The industry had not just defeated the tax. It had negotiated the replacement. The three companies whose executives had coordinated the campaign, whose investment suspensions had generated the turning-point headlines, whose strategists had privately advised that there was no principled case against the original proposal — those three companies sat across the table from the new Prime Minister and determined what the replacement would look like.

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 campaign was such a success that it’s now become routine for industry groups to threaten a mining tax style campaign every time they don’t get their way with government.Joo-Cheong Tham and Yee-Fui Ng, University of Melbourne, 2022

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.

The Mandelson admission — that there was ‘no ideological reason’ why the mining industry should not pay more tax — is not just a revelation about the dishonesty of the 2010 campaign. It is a statement of economic fact.

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 acknowledgement confirmed 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.

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 coordination of the campaign against the RSPT, the private admission that the tax was economically sound, 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 admitted no principled case against the tax existed. The investment suspensions were coordinated strategy. The campaign was designed to hide the corporate hand. All of this was coordinated partly through the email account of a convicted sex offender. The tax that could have raised A$33 billion for Australians was killed anyway.

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, coordinated partly by a British political operative who privately admitted there was no principled argument against it, and who forwarded strategy documents to a convicted sex offender.

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.

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, 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.