FORTESCUE Metals Group has warned that emerging miners will be unfairly targeted by the government.

This will come as the Gillard government tries to raise $10.5 billion in the first two years of the minerals resources rent tax, he says.

The Perth iron ore miner's chief financial officer, Stephen Pearce, told a Senate inquiry yesterday he was "adamant" further changes to the proposed tax were needed to reflect the needs of small and mid-tier miners.

The Australian reported yesterday that total tax paid by BHP Billiton would have increased by only $300 million if the minerals tax had been in place last year, raising questions as to how the government would raise $10.5bn from it.

Fortescue chief executive Andrew Forrest has shelved Pilbara iron ore expansions worth an estimated $US15bn ($17.2bn) due to the tax uncertainty, citing an inability to obtain debt financing.

Mr Pearce said yesterday Fortescue was unable to assess the full impact of the proposed tax on its operations from 2012 because it had not seen details of the draft agreement signed by the government with BHP, Rio Tinto and Xstrata this month.

He said the absence of information about the government's ability to raise $10.5bn was creating nervousness among financiers that would normally provide mining project finance.

"Despite the assurances made by the government last week that there would be no amendments to the headline rate of 30 per cent, we remain uncertain about where the government's taxing points will be," he said.

"If the government cannot raise $10.5bn by 2014, then where will the money come from?"

Treasury secretary Ken Henry told the inquiry Treasurer Wayne Swan would soon release more detail on assumptions supporting the minerals tax. Mr Pearce said the major miners were favoured by the minerals tax arrangements due to transitional concessions that enabled them to value their existing projects at market value rather than book value.

The minerals tax uplift rate -- the long-term bond rate plus 7 per cent -- penalised emerging companies, which had higher funding costs than big companies, he said.

Fortescue was also seeking guidance on the treatment of infrastructure, particularly third-party access, he said. It also wanted interest deductibility included in calculating the tax, an increase in the extraction allowance from 25 per cent to 30 per cent, an increase in the threshold from $50m to $100m and the exclusion of magnetite.

Source: The Australian