Several players in the mining industry did not hide their frustration over the new Henry tax review - a national resource rent tax for the industry. Many said that the new tax will hamper the nation's economic recovery and lose foreign investors in the long run.

Many speculate that the Henry tax review will include a 40 per cent tax rate for every profit which will replace state royalties. However, there is a possibility that the state government will impose an additional rent tax while a 40 per cent tax rate will be reduced to compensate for the retention of state royalties.

Andrew Michelmore, chief executive of Minerals and Metals Group, said it welcomed the proposal of the tax reform but did not anticipate a tax grab.

"The tax grab can have an impact on investment, particularly in changing the mood on foreign investment in Australia... It needs direct foreign investment and shouldn't be doing anything that discourages people, as they will start turning their money elsewhere," he said.

Brian Flannery, managing director of Felix Resources, commented that the nation will suffer deeply if the new-imposed tax will be followed. He said the government should be careful on its move since the mining industry has spared the nation from the financial crisis.

Minerals Council of Australia chief executive Mitch Hooke warns the government that an additional 40 per cent tax would tip over a $108 billion worth of investments and projects that are being proposed in Australia.

He added that the mining sector is paying more taxes compared to other sectors; and that taxes would "slow investment and increase sovereign risk in the Australian minerals industry."

According to the Australian Taxation Office, the mining industry contributed more than 13 per cent of tax than any other sectors.

The mining sector calls on the Federal Government to review carefully the proposed tax reform.