The federal government will limit its new resources tax to just 320 companies mining iron ore, coal, oil and gas.

It has dropped its plan for a resource super profits tax and replaced it with a minerals resource rent tax.

The new tax will apply to iron ore and coal projects which will be taxed at a new headline rate of 30 per cent – down from the previously planned 40 per cent.

The cut-in rate also has been adjusted to the long-term bond rate plus seven per cent.

The current petroleum resource rent tax will be extended to all onshore and offshore oil, gas and coal seam methane projects.

Other commodities will not be included in the tax regime.

The new measures come at a cost, garnering $1.5 billion less revenue than the previously-announced resource super profits tax.

To offset that loss, the government will cut the company tax rate to 29 per cent from 2013/14, but will not reduce it further under current fiscal conditions.

Small companies will still benefit from an early cut to the company tax rate to 29 per cent from 2012/13.

A planned lift in compulsory superannuation contributions – from nine per cent to 12 per cent by 2020 – remains unaffected.

The resource exploration rebate will not be pursued, with the current tax deductible arrangements staying in place.

Small miners with resource profits below $50 million a year won’t be liable to pay the new tax.

The petroleum resource rent tax (PRRT) regime, which currently only applies to offshore petroleum projects, will be extended to cover all oil, gas and coal seam methane projects, onshore and offshore Australia.

The tax will apply at a rate of 40 per cent.

The rate at which the tax applies has risen from the long-term bond rate – currently just over five per cent – to the bond rate plus seven per cent. That makes the super profit threshold about 12 per cent.

The new taxation arrangements, which are planned to begin on July 1, 2012, will apply only to the value of the resource rather than the value added by the miner.

The taxing point will be set at the mine gate where possible.

“This agreement provides certainty to the resources industry, to mining communities right around the country, and to the broader Australian economy,” Prime Minister Julia Gillard said in a statement, ahead of a scheduled press conference at 8.30am (AEST) on Friday.

“It sends a very clear message to the world that the Australian resources sector is strong and its future is secure.”

The changes also recognise the views of the resources sector, Ms Gillard said.

A policy transition group, led by Resources Minister Martin Ferguson, will also oversee the development of more detailed technical design.

Prime Minister Julia Gillard says new resources tax arrangements will allow the nation to move forward.

Announcing the plans in Canberra on Friday, Ms Gillard said the nation could now move on, with Australians getting a fairer share of mining wealth.

“We have been stuck on this question as a nation for too long,” she told reporters.

“Today we are moving forward together.”

The arrangements would deliver better returns for the resources that all Australians owned, and that could only be dug up once, Ms Gillard said.

It will end uncertainty and division, strengthen the economy and deliver sustained investment in infrastructure in mining communities, “maintaining Australia’s standing as a competitive and attractive destination for investment”, she said.

The “competitive tax rates” would allow business to grow.

“We have a positive basis for trust and I believe we have established that this week.”

Former BHP Billiton chairman Don Argus will chair a policy transition group, Ms Gillard said.

“I’m delighted that Don Argus … accepted my invitation to chair this process working alongside me.”

Treasurer Wayne Swan said Ms Gillard’s leadership was instrumental in reaching an agreement with the resources sector.

“I think it’s fair to say that her intervention changed the tone of this debate and has led to this breakthrough,” he told reporters.

“She gets things done and I think that’s obvious by the nature of this agreement.”

Mr Swan described as “difficult” and “untidy” the spiteful battle fought over the tax since early May.

“It is a better tax for the negotiation that we’ve had in recent times,” he said.

“It’s pretty fair to say that not every single company or every single individual in the country is going to agree with this outcome.

“Not everybody will always embrace the idea of paying more tax but I think what we have achieved here is a pretty strong consensus in a key area.”

Ms Gillard acknowledged the compromise deal would have its critics.

“At the end of the day, you will never please everybody, and we’re not suggesting that this package will please everybody,” she said.

The negotiated deal showed the benefits of “respectful conversations and frank talking”.

Ms Gillard defended the public servants and government advisers who had worked on the original tax proposal from suggestions they were not working in the “real world”.

“Obviously we need advice from within the bureaucracy, and I believe we’ve got great people working alongside us as a government.”

The government had got out and talked to people about the tax, Ms Gillard said, adding it was her intention to continue doing that.

The discussions with the mining industry was “hard, frank and respectful”, Ms Gillard said.

“As prime minister I’ve put my stamp on the approach that was taken here,” she said, adding that she was “not afraid of a difficult conversation”.

Resources Minister Martin Ferguson said the new tax design should not threaten jobs in South Australia, where OneSteel, the main employer in the steelworks town of Whyalla, said it couldn’t survive the original tax proposal.

“On the basis of my reading of these principles, there is no danger to any jobs in South Australia,” he told reporters.

“We’ll see the expansion of (BHP Billiton mine) Olympic Dam, which will create a huge economic opportunity for South Australia and the nation and will secure the future of those workers and their families who depend on OneSteel.”

Mr Ferguson said the dumped tax break for resource exploration was still an option for the future.

“The industry decided they didn’t want it, we ditched it because the industry wanted it ditched,” he said.

“It will be part of the consideration of any other possible system through the implementation committee chaired by Don Argus and myself.”

Mr Swan said it was “not inevitable” that a planned increase in compulsory superannuation contributions – from nine per cent to 12 per cent by 2020 – will come out of the wages of employees.

“It will depend upon wage negotiations…(it) will be sorted out at the workplace level,” he said.