"Markets hate uncertainty - they're probably going to be volatile until there's a pretty clear picture of what the mining tax will look like," said James Holt, who helps manage about A$40 billion ($36.5 billion) at BlackRock Investment Management (Australia) Ltd. "The government may have to change it to prevent a black hole in the budget."

A committee chaired by former BHP Chairman Don Argus is yet to produce a design for the 30 percent levy on iron ore and coal profits, Swan said today. Labor party Prime Minister Julia Gillard, who yesterday clinched the support of independent lawmakers Tony Windsor and Robert Oakeshott to form a minority government, said she can't assume automatic support for her legislation in parliament.

"There seems to be some confusion among traders as to the outcome for the proposed mining tax," Ben Potter, market strategist at IG Markets Ltd. said in a note. "Everyone thought a Labor government meant a certain mining tax. This may not be the case. There could be three potential outcomes - it either goes ahead as planned, it doesn't get passed or it gets passed with changes."

" It is not clear whether the government has the numbers to pass the minerals resource rent tax (MRRT) into law," JPMorgan Chase & Co. analysts led by Paul Brunker said yesterday in a report. "The independents who have sided with the government have argued for a broader review of tax policy. This could kick the issue into the long grass for so long that the political balance shifts before the tax even comes to a vote."

David Fuller's view This issue is obviously for Australians to decide but as a business plan, I do not think that the likes of BHP Billiton and Rio Tinto should pay a higher tax rate than any other Australian companies. A super-tax in times of prosperity for a single sector of the economy seems to me to be highly divisive. It is also bad economics because it makes long-term planning in terms of exploration and the development of brownfield or greenfield mining sites more difficult. Moreover, it does not take into account hardship experienced by the mining industry during leaner years, which will also have to be funded during the next downturn in demand for minerals.

However, if a government campaigns on a policy of robbing Peter to pay Paul, it can usually count on Paul's support.

My thanks to a subscriber for this authoritative additional report on implications of the election result.