Mining companies have fallen early Tuesday on the FTSE 100 after the bank holiday weekend.
Shares in Rio Tinto and BHP Billiton were down 5.17 and 7.37 pct respectively at 1:23pm.
Shares in Xstrata and Antofagasta were down 4.17 and 4.80 pct respectively.
BG Group, Anglo American and Vedanta Resources were all down between 3.45 and 3.58 pct.
The reason for the mass falling - which has led the FTSE 100 down 78 points (1.41 pct) is fears of an Australian mining tax on such companies.
Prime Minister Kevin Rudd said on Sunday that profits in the sector had not translated to higher revenues for the Australian government with proposals for 40% of above-normal profits to be taxed currently being considered.
Any possible tax however, would reduce the chance of further M&A, say Schroeders.
"If implemented, these proposals seriously threaten Australia's competitiveness, jeopardise future investments," said BHP Billiton Chief Executive Officer Marius Kloppers, "And will adversely impact the future wealth and standard of living of all Australians."
Miners are expected to protest vehemently.
Morgan Stanley analyst Ephrem Ravi said the news could hits discounted cash flow by 13%-18% for BHP and Rio Tinto, around 4%-6% for Xstrata and around 2-3% for Anglo American reflected in today's share price falls.
Rio and BHP fell more than twice as much as Anglo, whilst Xstrata was somewhere in between.
Miners contributed 18% of Australia's GDP, 42% of Australian export revenues and are the largest contributors of corporate tax revenues, say BHP Billiton.
Increases in tax burdens for mining companies could impact negatively on risk taking in new projects leading to higher prices on the consumer to cover any loss, said Morgan Stanley.
They believe that higher metals prices could recoup most of losses in share price over the last month.
Deutsche Bank meanwhile, played down any potential affects to profit, saying that falling share prices had more than accounted for any possible damages.