"When mining crowds everything out and the economy makes room for that, to service China, knowing that it's a highly volatile global cycle, it becomes a question of what Australia does with the spoils, " he told CNN.

CNN: Australia: Losing 'know-how' economy?

But Fortescue, which is part-owned by Chinese state mining firms, said the tax would hit profits before financing costs, leaving it less room to repay debts.

BBC: Australian miner Fortescue in tax plan threat