Fortescue Metals CEO Andrew Forrest says he is relieved that the resources super profits tax is now dead, but says the redesigned tax unfairly penalises junior and smaller Australian miners.

The Government has backed down on several key areas in a bid to end the damaging stoush with the resources sector, dumping its resource super profits tax for the Minerals Resource Rent Tax (MRRT).

Tax renamed the minerals resources rent tax

Tax renamed the minerals resources rent tax Will only apply to iron ore and coal

Will only apply to iron ore and coal Iron ore and coal will now be subject to a new tax at a rate of 30pc instead of the original 40pc

Iron ore and coal will now be subject to a new tax at a rate of 30pc instead of the original 40pc Oil and coal seam gas to be rolled into the existing petroleum resources rent tax and taxed at 40pc

Oil and coal seam gas to be rolled into the existing petroleum resources rent tax and taxed at 40pc Tax will kick in at the government bond rate plus 7 per cent, which would be around 12 per cent

Tax will kick in at the government bond rate plus 7 per cent, which would be around 12 per cent Changes mean the Government loses $1.5 billion of expected revenue

Mr Forrest says the original tax proposal would also have been axed by former prime minister Kevin Rudd.

"The changes broadly encompassed to the RSPT picked up from where the previous prime minister and I left off," he said

"Remember that the previous prime minister and I were to bring forward a discussion paper to formally bury what I always thought was the stillborn RSPT; a very, very dangerous tax."

He says the new agreement generally reflects the key elements of the discussion paper Fortescue was expecting Mr Rudd to release last week.

"However, it is very disappointing that right at the time that junior and smaller Australian iron ore and coal miners have managed to develop a foothold into the industry, they are immediately slugged with this proposed new and additional tax," he said.

"[In] the developing sector if we're going to be fair dinkum about fairness, we should have a floating rate above a company's true cost of borrowings. Then of course you have a fair playing field.

"At this stage the playing field is skewed towards those companies with lower cost of borrowings and therefore skewed towards multinationals and not Australians."

Mr Forrest also says the narrow and complex nature of the new tax will be a disincentive for other mining project developers who are keen to enter the industry.

Fortescue is seeking clarification on transitional arrangements, the treatment of infrastructure costs and the uplift over the bond rate.

Mr Forrest says he was aware the Government was holding talks with other miners, but did not ask Prime Minister Julia Gillard if he could join in.

"She would well have known that I would insist on a discussion paper, not a cut and dry deal," he said.

"She perhaps chose people who were in more of a hurry and less willing to consult than I was."

'Strange scenario'

West Australian Premier Colin Barnett has criticised the discussion process leading up to the new tax, saying the Commonwealth failed to consult his government.

He has also echoed the negative sentiments of some mid-tier and junior miners.

"It is a strange scenario when a national government will sit down with probably the world's three largest mining companies to negotiate an arrangement and the Australian-owned companies are basically left out in the cold," he said.

Mr Barnett says the new tax deal shows considerable improvement but is still flawed and should be scrapped.

"This proposal is a better one than the previous one but it is still a new mining tax," he said.

"Increasing the threshold level is a good move - reducing the rate of taxation also good.

"It's a bit strange to me that it's now just going to apply to iron ore, coal and the oil and gas industry. That is a discriminatory taxation regime."

Mr Barnett says he is unsure what future role his state will have regarding royalties.

"We are not going to give up any sovereignty over our natural resource - to do so would be to abandon the future of Western Australia," he said.

"I don't know what the Commonwealth proposes but there have been some strange comments made with respect to royalties - some very obscure comments."

Meanwhile, Opposition Leader Tony Abbott is refusing to back the deal made between the Federal Government and the resources sector over its redesigned resources tax.

Mr Abbott is not rescinding his calls for a new tax on the mining industry to be dumped and says that the next election will be a referendum on the proposal.