The government has so far resisted pressure to publish details of how the revenue will be raised, and there’s no word yet from ratings agencies on it potential impact because the Mineral Resource Rent Tax (MRRT) is still far from passage. But the mining industry itself is split.

Australian Deputy Prime Minister and Treasurer Wayne Swan has said that his department’s studies indicate the iron ore industry dominated by BHP Billiton Ltd (ASX: BHP, NYSE: BHP), Rio Tinto Ltd (ASX: RIO, NYSE: RIO) and Fortescue Metals Group Ltd (ASX: FMG, OTC: FMUSF, ADR: FMUSY) would pay about 75 percent of the AUD11.1 billion that the tax is set to raise in its first three years, while coal miners would pay the remaining 25 percent.

Mitch Hooke, the head of the Minerals Council of Australia, the nation’s largest industry lobby group, said he believed the figure was correct.

A Fortescue executive, Julian Tapp, taking up the battle his boss Andrew Forrest, said the government had been “sold a pup”–British/Australian for “pig in a poke,” or to be tricked into buying something that’s not worth anything–and generous concessions to the big miners meant the tax would only raise a fraction of its intended revenue.

Here are the basics of the MRRT, which is designed to “provide an appropriate return for these non-renewable resources to the Australian community who owns the resources 100 percent,” in the words of Assistant Treasurer Bill Shorten, as originally outlined. The key to accomplishing Mr. Shorten’s goal is a provision that sets aside funds from the new revenue generated to boost “compulsory” contributions under Australia’s “superannuation” retirement system from 9 percent to 12 percent of an employee’s salaries and wages.

The MRRT proposed tax rate is now 22.5 percent, a combination of a 30 percent headline rate, which is reduction from the 40 percent contemplated by the RSPT, and a further 25 percent extraction allowance against the gross MRRT liability for all affected companies “to further shield from tax the important know-how and capital that mining companies bring to mineral extraction.”

Because the new proposal results in a reduction in tax revenue, the Australian government has proposed eliminating a previously announced resource exploration rebate and removing the refundability of losses and state royalties. As part of the package the corporate tax rate across Australia will be reduced to 29 percent.

A proposed “de minimis” rule would exclude those businesses with of less than AUD50 million per year from the MRRT. The ambiguity around this proposal is what opponents are using to extend their campaign against the mining tax.

The MRRT is applicable to about 500 companies in the coal and iron ore sectors, as opposed to the more than 2,000 miners contemplated by a prior proposal that sunk Prime Minister Kevin Rudd’s regime.

The existing Petroleum Resource Rent Tax (PRRT) will be expanded to include onshore oil and gas projects, including coal seam gas projects and the North West Shelf.

As reported in AE Weekly, Australia passed its carbon dioxide emissions tax on Nov. 7. Terms of the Clean Energy Bill dictate that Australia’s top 500 domestic polluters will pay AUD23 (USD23.66) per metric ton of greenhouse gas emitted beginning Jul. 1, 2012. A cap-and-trade system similar to one in Europe will kick in beginning Jul. 1, 2015, at which time companies will need a permit for every ton of carbon they emit.

Prime Minister Julia Gillard said its passage was a major milestone in Australia’s efforts to cut carbon pollution and seize the economic and job opportunities of the future. Deputy Prime Minister and Treasurer Wayne Swan said that Treasury forecasts show the carbon price will reduce emissions, drive investment in clean energy and create 1.6 million jobs by 2020.

Australian Petroleum Production & Exploration Association (APPEA) CEO David Byers, meanwhile, warned that the local legislation may negatively impact Australia in the context of the global gas industry, specifically its potential additions to the cost structure of Australian liquefied natural gas (LNG) exporters competing in global markets.

There is no global carbon price in operation. Natural gas will certainly be more competitive as an energy source for domestic power generation, favoring companies such Sector Spotlight Origin Energy Ltd (ASX: ORG, OTC: OGFGF, ADR: OGFGY) as well as Conservative Holding AGL Energy Ltd (ASX: AGK, OTC: AGLNF, ADR: AGLNY). But Australia is imposing a cost on its industry that won’t be borne by its major LNG competitors at the international level.

Global ratings agency Standard & Poor’s, following passage of the legislation, announced that there “was no immediate impact” on its ratings on Australian utility companies it covers, including Origin and AGL.

Dividend Watch List

The business of Australian Edge is to identify businesses capable of paying sustainable and growing dividends over time. The corollary of this mandate is to identify those businesses that are not capable sustaining or growing dividends.

Basic Materials

Aditya Birla Minerals Ltd (ASX: ADY, ABWAF)–Having declared its first dividend since May 2008–AUD0.09 per share paid in June 2011–Aditya announced that its directors “not recommend the payment of a dividend in respect of the first half of 2012.” Buy < USD1.20.

BlueScope Steel Ltd (ASX: BSL, OTC: BLSFF)–Negative payout ratio, onerous union burden on cash flow, unfavorable operating environment and a high debt burden make for an ominous stew for a company with one recent dividend suspension. Sell.

Iluka Resources Ltd (ASX: ILU, OTC: ILKAF)–Stock is riding high, and recent results have been solid. But rare-earths miner just recently restored the dividend after a three-year hiatus, and the payout ratio is on the high side. Buy < USD14.

Kingsgate Consolidated Ltd (ASX: KCN, KSKGF)–Already patchy gold-mining operations have been hurt by “50-year rains” inundating Thailand operations, which doesn’t bode well for troublesome cash costs. Hold.

OneSteel Ltd (ASX: OST, OTC: OSTLF)–Many headwinds force management to trim fiscal 2012 guidance. Dividend is down more than 20 percent since 2008, including recent reduction to AUD0.04 from prior AUD0.06 per share “final” payment. Hold.

Consumer Goods

Goodman Fielder Ltd (ASX: GFF, OTC: GDFLF)–Successful refinancing at lower cost relieves some pressure on cash flow. A negative payout ratio and a record that shows four cuts over the past five years earn it a spot on the List. But this food retailer’s dividend demonstrates a not-unusual, more flexible approach to dividends often seen in Europe and Australia as well the impact of varying levels of “franking,” or tax covered by the paying company. The refinancing earns it an upgrade from “sell.” Hold.

Consumer Services

APN News & Media Holdings Ltd (ASX: APN, OTC: None)–Advertising fundamentals continue to deteriorate. Dividend is down 30 percent over the past three years, including two cuts. Sell.

David Jones Ltd (ASX: DJS, ADR: DJNSY)–Has cut twice during the past five years to a level that should hold barring a complete, unlikely collapse of the Australian economy. Ominous management guidance tone suggesting potential overabundance of caution is sufficient cause for inclusion on the List, though. Hold.

Seven West Media Ltd (ASX: SWM, OTC: None)–History of cuts, high yield, big payout ratio and continuing challenges of advertising dependence make another dividend reduction more likely than not, despite strength of Seven network. Hold.

TABCORP Holdings Ltd (ASX: TAH, OTC: TABCF)–Has cut three times in recent years, including with most recent payment, demonstrating it, too, has a flexible policy that changes with economic conditions. Hold.

Industrials

CSR Ltd (ASX: CSR, CSRLF)–Cost-cutting, lower interest costs mask impact of weak environment for building-products supplier. Return to health of residential real estate market will do this otherwise solid outfit well. Hold.

The ADR List

Dividend Watch List member David Jones Ltd (ASX: DJS, ADR: DJNSY) now has an unsponsored American Depositary Receipt (ADR) trading stateside. It’s worth one underlying share traded on the Australian Securities Exchange (ASX). We’ll continue to track the How They Rate coverage universe and beyond for Australia-based companies that afford US investors the convenience of ADR investing, either through their own doing or via the effort of an interested financial institution.

Here again is our primer on Australian stocks, US over-the-counter (OTC) symbols and ADRs.

The great majority of the companies comprising How They Rate have US symbols, many because they actively seek to raise capital here on their own accord. That means they comply, to varying degrees, with US Securities and Exchange Commission filing requirements for foreign companies and with US accounting principles. Others trade here because a sponsoring institution has effectively created a secondary market for the shares, without the underlying company’s active participation.

Shares traded on US over-the-counter (OTC) markets bearing a final “F” in their five-letter symbols are basically home-listed shares trading in a market created by and for US institutions. Individuals can buy and sell here, too. Prices basically reflect Australian Securities Exchange (ASX) prices and also reflect changes in the relationship between the US dollar and the Australian dollar. One “F” share represents one ASX-listed share. The dividend you receive in respect of an “F” share is the dividend paid in respect of the ASX-listed share, adjusted for currency effects.

An American Depositary Receipt (ADR) is a certificate that represents stock of a foreign company. ADRs are listed on US stock exchanges or the OTC Bulletin Board or Pink Sheets. Those that trade OTC have five-letter symbols ending with the letter “Y.” All transactions, including dividend payments, are conducted in US dollars.

One ADR certificate may represent one or more shares of the foreign stock; it can also represent a fraction of a share. For example, one Telstra Corp Ltd (ASX: TLS, OTC: TTRAF, ADR: TLSYY) ADR, which trades under the symbol TLSYY, is worth five ordinary shares that trade on the Australian Securities Exchange under the symbol TLS. Australia & New Zealand Banking Group Ltd’s (ASX: ANZ, OTC: ANEWF, ADR: ANZBY) ADR, ANZBY, is worth one Australia-listed ANZ share.

Because many ADRs don’t have a one-to-one ratio between the depositary receipts and the shares of stock, financial ratios are often not included in stock listings. Data in Australian Edge Portfolio tables and How They Rate is derived based on Australian Securities Exchange symbols so is as complete as you’ll find anywhere.

Foreign companies themselves often “sponsor” the creation of their own ADRs. These are called “sponsored ADRs.” There are three levels of sponsorship.

A Level I sponsored ADR is created by a company because it wants to extend the market for its securities to the US. It does not, however, want to register with the Securities and Exchange Commission (SEC) or conform to generally accepted accounting principles (GAAP). Level I ADRs trade on the OTC Bulletin Board or Pink Sheets trading systems, usually but not exclusively by institutional investors. Australia & New Zealand Banking Group’s is a Level I ADR.

Level II and Level III sponsored ADRs must register with the SEC, and financial statements must be reconciled to generally accepted accounting principles. A Level II ADR requires partial compliance with GAAP, while a Level III ADR requires complete compliance. A Level III sponsorship is require if the ADR is a primary offering and is used to raise capital for the company. Only Level II and Level III sponsored ADRs can be listed on the New York Stock Exchange (NYSE), the American Stock Exchange or Nasdaq. Telstra Corp sponsors a Level III ADR in the US, meaning it’s actively seeking to raise capital here.

An unsponsored ADR is created by a US investment bank or brokerage that buys ordinary shares on the underlying company’s home market then deposits them in a local custodian bank. This depositary bank then issues shares that represent an interest in the stocks and handles most of the transactions with American investors, serving both as transfer agent and registrar for the ADR.

The shares of the foreign stock held in the custodian bank are called “American Depositary Shares,” although this term is sometimes used as a synonym for “American Depositary Receipts.” Unsponsored ADRs can’t be listed on the major American stock exchanges because they aren’t registered with the SEC and lack other necessary qualifications.

The price of an ADR is determined by supply and demand but will generally track the price of the underlying ordinary share. When dividends are paid, the custodian bank receives it and withholds any foreign taxes, exchanges it for US dollars and then sends it to the depositary bank, which then sends it to the investors.

The US depositary bank handles most of the interaction with US investors, including rights offerings, stock splits and stock dividends. Sponsored ADR investors may receive communications, including financial statements, directly from the company.

Here is a list of companies in the How They Rate coverage universe that have an ADR listing in the US.