In an interview with The Financial Review last week, chief executive Marius Kloppers said the company would freeze its Olympic Dam expansion plans until uncertainty over the tax was resolved.

He said it would be extremely unlikely BHP would approve a major investment while it was still working out how the tax would affect business.

While there have been early signs both government and the big mining companies are willing to compromising on the tax, it is not clear whether BHP is truly serious in its threat to end Roxby Down’s much-heralded $20 billion expansion before it even begins.

Treasurer Wayne Swan, however, is not backing down. He has come out punching this week, claiming Australia’s multinational mining companies, including BHP, pay only 13 per cent in company tax.

“What the mining companies won’t tell you is they are getting a massive discount already on the company tax they pay because of generous concessions they get at the expense of other Australian tax payers,” he said.

“It’s time for mining companies to give the fear campaign a rest.”

However a furious BHP says its tax rate has been hugely misrepresented.

Its chief financial officer, Alex Vanselow, insists the company paid $6.3 billion in Australian taxes in 2009, resulting in an effective tax rate of around 43 per cent.

As the argument continues, Roxby Down Council administrator Bill Boehm is one of many still unsure what the proposed tax will mean for Roxby Down’s and the proposed six-fold expansion.

He said only the specific mining company can really know what the impact may be.

“The announcement by the Federal Government of a profit-based mining tax involves detailed legislation which has not as yet been prepared.

“Much discussion with key players is obviously to be involved.

“It is not possible to gauge a general local community view but I would expect that there are potential concerns if this policy puts in jeopardy a potential expansion of the Olympic Dam mine and of the mining industry generally.”